Plexus stock (LSE:POS) is a difficult and choppy
market as shown in the chart. The price is jumpy with no protracted directional
move.
However, what would be the next directional move
when momentum returns to the market? The ADX period 14 shows that the market is
in an equilibrium mode; but the fact that the DM- is above the DM+ means the
bearish determination is strong enough to be noticed. On the MACD (default parameters), the
histogram is below the zero line. The signal lines are also sloping downwards
and when they succeed in crossing the zero line to the downside, they can only
show one thing. The price may drop further.
We are not really interested in the fundamental
noise that is behind the price action, we are interested in the effect it has
on our portfolio. Now instead of worrying about the hit rate, we would want to
use a sound position sizing technique to achieve our objective – that is to
survive the current phase and make gains when there is a breakout.
Conclusion: Plexus price
is very choppy, but the it may drop further when a breakout does occur. The current volatile and trendless phase in
the market is giving the bear enough time to gain an upper hand over the bull. One
whose teeth were sharpened by us now bites us with the same teeth.
This forecast is ended with the quote below:
“No one in his right mind would start out any position
with 180 per cent of his/her total capital.” – Dirk Vandycke
Azeez Mustapha
Market Analyst, Trading Signals Provider and Coach
Eye-opening trading lessons: Lessons from Expert Traders
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