Plexus Holdings PLC provides engineering methods and services for the oil
& gas sector. This company stock is characterized by many gaps
(gaps-up and gaps-down), extremely serious equilibrium market zones and
significant movements; whereas a gap is a break in price. Gaps on this market
reflect the proverbial imbalance in supply and demand on the shares of the
company. When there is a gap up, it means the bulls are winning, and when there
is a gap down, it means the bears are victorious.
Technical Forecast: This Is a Bull Market
In case of the Plexus Holding stock
(LSE:POS), we need to understand that a gap up is indeed representative of
copious purchases, and a gap down is representative of excessive selling
pressure. When the imbalances are highly conspicuous, these colossal zones are
made as the price merely jumps down or jumps up, though there are periods of
trendless activity when traders are very much inactive. Like a blockage in a blood
vessel or a disruption in a pipe in which some liquid passes, the price might
be unable to move smoothly until the strange imbalance is thwarted. Please look
at the Plexus Holding chart, you would see the truth of the foregoing.
From
January to April, 2012, the stock made significant bullish movement. No doubt,
investors would be glad to realize some decent returns on their investment. The
price topped at 131.5 on May 4, 2012 and began to plummet - going southward
until June 15. That was incursion of the market into a bearish mode, as the
price was weltered in bearish pressure. Further southward movement was rejected
on June 15, 2012; at a low of 101. As the price started to essay to the upside.
You
can see the Average Directional Movement Index (ADX) period 14 and the Moving
Average Divergence Convergence (MACD) on the POS chart. Technically, what we
have now is a bullish Confirmation Pattern. The ADX line is winding its way up
to the level of 60, which means that the trend is significant, while the signal
line of the MACD has crossed the zero line to the upside, remaining positive. This
underpins the northward rally that is currently the primary trend. This does
not mean that the price cannot go on a short-term sale in the context of an
uptrend (we still cannot predict a pullback in price prior to the time it takes
place). Prices do not go in straight lines, and it is known that counter-trend moves could be deleterious to traders’
interests. Nonetheless, this would give unique opportunities for some traders
to enter the market at better prices. This stock is trading at 123 at
the time of writing this article. Sellers are laying ambuscade at the levels at
124.00 and 124.50, and the price is being supported at 122.50 and 122.00. This
is a bull market and the value of its shares would increase if this scenario
continues. Great return on investments would first start as negligible returns.
Conclusion: When trading, it is
better to be objective rather than subjective. Albeit, the recent bear market
on the Plexus Holding could have been painful to permabulls, it is better to be
sure to carry out trading plans based on statistically significant sample of
events, and not one painful experience. I would like to end this article
with a quote from one of the greatest legendary stock market geniuses that have
ever lived on this planet:
“There is only one side to the… market; and it
is not the bull side or the bear side, but the right side.” – Jesse Livermore
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Copyright (C) ADVFN PLC
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