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Tuesday, April 21, 2015

Bulls Regret Buying African Potash

Africa Potash stock (LSE:AFPO) is a bear market; and the bulls regret buying the stock. For the past 6 months, the price has been trending downwards slowly and gradually. This is a bias that is expected to continue for the next several weeks and months.

There are currently conflicting signals in the chart. Although the ADX period 14 is not above the level 20, the DM+ is clearly above the DM-, meaning that the bulls are making some effort to push up the price. The MACD default parameters, also has its histogram above the zero line, while its signal lines are below the zero line. All these show that the bulls are making desperate effort in the context of a downtrend.

Now, the bullish effort may work in the short-term, but the price would likely form new lower highs and lower lows (just check how the price deceived the emotional bulls in the past). By the time  the ADX period 14 goes above the level 30 and the DM- moves above the DM+; by the time the MACD has both its signal lines and histogram above the zero line, there would have been a continuation of a strong bearish bias. New buyers will also regret, just as old buyers currently regret.

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

What Super Traders Don’t Want You To Know: Super Traders



1 comment:

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