New World Oil stock (LSELNEW) has long been consolidating in what could be rightly called a downtrend. It is assumed that the price would drop further after the consolidation has run its course.
The price has been running lower since the beginning of this year. It even gapped down on early February 2013. Since late May until now, the price has been consolidating to the downside: the RSI period 14 is below the level 50 and the Lower Trendline is being tested consistently. This means that the price could break the Lower Trendline to the downside in what could be called another drop in price.
Note: A trading recommendation would be more dependable after the market conditions have been favorable to it for long. Even if you would not short this stock in a real account, you could do so in simulation mode. Simulation accounts are wonderful teaching tools helpful in preparing the aspiring trader to experiment with the known trading principles. Simulation accounts, however, have a shortcoming. They create an unreal experience in which the full-blown pressures of handling real accounts can’t be replicated.
This piece is ended with the quote below:
Trading is not a lottery but a very challenging business that you need to be up to and that requires professional training. – Norman Welz (Source: Tradersonilne-mag.com)
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Ground-breaking lessons from expert traders: http://www.harriman-house.com/experttraders
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