There is a lot to be read into a chart and can be helpful.
RSI may be used to view it as a bullish or bearish signal when it crosses 50. When the RSI crosses above 50 it can be considered bullish, and when it crosses below 50 it can be considered bearish.
Another way to look at it is the USA gas and oil industry cost exceeds cost for import. New gas and oil plants are in the developing nations, not in the USA. The cost to replace aging production plants exceeds profit ability.
It is easier to maintain and inventory amount and buy as needed. Therefore when there is trouble abroad our cost is directly impacted.
The big oil companies have an advantage at present that impacts the USA economy. It seems the lobbyist has deep pockets and the controlling people have big hands.
The cost of oil and gas in the USA depends on import. DOW has little to do with it. The impact of gas and oil impacts the DOW.
The supply and demand now relates to companies and the RSI can indicate buying and/or selling demand.
The Bollinger bands changes tend to occur after the bands tighten to the average, when a stock is less volatile. The greater the period of less volatility, the higher the propensity for a price breakout.
When the price hits the upper or lower bands, it is suggested to confirm with other indicators whether that price movement shows strength or weakness, respectively, which could indicate a continuation. If indicators do not confirm this movement, it can suggest a reversal.
Investors use trading bands, lines drawn above and below the moving average, to isolate a range of prices for a given security, based on the concept that a stock generally trades within a predictable range on either side of the moving average. When a stock is near the upper or lower limits of the trading bands is when an investor should pay closest attention, according to conventional wisdom.
It may be easier to know that Karoon share price is going up as we get closer to the Browse Basin drilling knowing that major finds are documented.
Not everyone are long termers. I have had a majority of my stocks protected for a long time. In addition, I have shares that I buy and sell to help the old bank book as often needed. I am sure that there are others in the same boat. This causes price swings and volume swings as profit taking occurs. I know I made major investments below AU$4.00 and sales above AU$5.00. Can you imagine what big investors were doing?
Now the news stories, rating reporting, etc impact reduce the effect on the stock as drilling gets near.
Volume spikes are often the result of news driven events. It occurs when there is an increase in volume over the recent volume average. This volume spike will often lead to sharp reversals, since the moves are unsustainable due to the imbalance of supply and demand. Trading counter to volume spikes can be very profitable, but it requires enormous skill and mastery of volume analysis.
I think most traders buy on good news and sell on bad news. The expectation of good or bad news will cause a price and volume change. In the gas and oil industry selling before final report often occurs. The “take the profit and run theory” often causes price volume changes for no logical reason for a lot of traders, yet, it occurs.
MACD buy sell signals are given when the fast line crosses over the signal line. When the MACD fast line rises up through the MACD signal line, we receive a buy signal. Conversely, when the MACD fast line falls through the MACD signal line we receive a sell signal. The appeal of this approach is it is a simple.
I am looking for the last major drop in share price before the drilling starts. I plan to buy all the shares I can while a lot of people take their 10% to 20% profits. These shares will go into my major holdings pile and hope for the big bucks.
Do I expect the share price above AU$10.00 again. Yes I do. Consider the price obtained before we knew what is known now with the Brazil and Browse Basin potential. The global economy along with supply and demand will cause major impact, along with the Australian dollar impact on the economy, making KAR look great.
It appears I have tooooooooooooooooo much time on my hands waiting for the start of what I expect to be a VERY profitable future.
Bob
KAR Price at posting:
$5.35 Sentiment: LT Buy Disclosure: Held
(20min delay)