ADN TA and Charts, page-37

OKIDOKI, you all know my opinions about charting speculative news driven stocks. The best chart in the world won't mean nothing if DFS is bad, and vice versa.

But they still tell a story in the absence of news. I threw up a chart this morning and it was better than expected; I thought I'd share this and my interpretation with you all.



Yikes its a monster, grab a coffee and lets digest, maybe open chart in a second window.

Firstly this is a daily chart, with roughly 6 months of candles. Red is a down day, Green an up day. Those little green and red dots don't mean much here, but these are parabolic SAR, a trend indicator. Simple, a red dot above means the bears are winning, and a green dot means Bears are running away in the woods. In my days of developing algorithmic trading software, I'd frequently include this not for this main trend purpose but as a trailing closure warning to close either a long or short position. I'd stay long, hopefully close out at top, but if the green dots pierced the chart I'd close. I'd stay short until the red dots pierced the chart and close. Here at the end of this chart you can see an array of red dots, which will soon flick to green. At this point I would close out any shorts. Very close, and this is a great sign.

On the price chart we also have 3 Bollinger Bands - middle is just a Moving Average, and the others are exponential averages. Compressed Bands can indicate an explosive breakout. Price action tends to stay inside the upper and lower band. Now, if the price pierces the top, it will likely pull back, and if the price pierces the bottom band it will likely come back up. 2 Caveats!!!. Firstly, the price can cling to a Bollinger band whilst the bands move against you. Look at the left, with the green bars, you would think the price should back off, but, the upper band just went higher and higher. Similarly so on the right, you can see the price is clinging to the bottom line. Generally you would wait until the line is pierced and crosses back in. Secondly, if all the bands are going down be carefull going long, and if all bands are going up be carefull going short. Bollinger, is not giving ADN much satisfaction, but I derive a little hope from the fact that the lower Bolinger Band has a curve that has almost flattened out.

Directional Movement is a fantastic indicator and is next. There are 3 lines, Black - strength, Green - Bull Pressure, and Red - Bear Pressure. The higher the black bar is, the stronger the trend, and the trend is indicated by the higher of Red and Green. As you can see Red is much higher than Green, the black line is high, it is a poor state of affairs. You can however derive more from this indicator. It is just as important to watch whether the green and red bars are converging or not. Once again, on the left we have that good run, Green is storming up, red is dropping but look what happens when these 2 lines start to come together. Now look at the end of our chart; bullish? maybe? not yet, but soon maybe.

Moving Averages Convergence Divergence is next, feel free to ignore the bars they don't add value - its just more visual. There are 2 lines, if Blue is above Red, its good and if Red is above Blue its bad. We can see Red above Blue, indicating negative sentiment, but they are coming together and we would expect these to cross. Check in a few days.

Money Flow Index, another super indicator, because it uses Volume as well as price data. Textbook will tell you overbought above 80, oversold below 20. Personally I think it smarter to wait until the price comes back from one of those level. Which is exactly what ADN is doing here. Dropped below 20, and now is above 20. The reason why I use this differently, is that this indicator (and RSI as well), it can stay below 20 for long time, whilst price keeps on dropping. This is Super Bullish for me.

Relative Strength Index. Same comments as MFI above. I'd like that RSI to pierce the 30 cleanly and it looks a little flat.

Stochastic Oscilator. Looking good and Confirmation has already happened, the concern is that it may peak before we get much price movement.

Williams, works just like MFI and RSI, except with odd ranges -20 -80. you can see the indicator dropped below -80, stayed there and now indicates a buy. Note, here again that the indicator can stay in the oversold zone for a long time; and thus the reason why my personal choice would be to wait until it comes out of the these zones.

but..... if the DFS is bad, this chart won't mean anything.