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Tuesday, December 22, 2015

Watchstone Group Should Be Approached with Caution

Watchstone Group stock (LSE:WTG) should be approached with caution because it is yet to be confirmed whether the current bullish breakout on it could be sustained or whether it is a bogus one.

4 EMAs are used for this analysis and they are EMAs 10, 20, 50, and 200. The color that stands for each EMA is shown at the top left part of the chart. It would be seen that the EMAs were all flat in the last several months, confirming a strong base, prior to the current breakout.

For the current breakout not to be a false one, the price needs to continue trending upwards for the next several months. Then, the 4 EMAs would be sloping upwards, while the price stays alternatively above the EMAs 10 and 20 (though the possibility of pullbacks along the way cannot be ruled out).

In case Watchstone Group stock fails to continue the bullish journey it started, then it would be interpreted as a false breakout. Therefore, the market should be approached with caution.  

Azeez Mustapha

Market Analyst, Trading Signals Provider and Coach

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