I'm not a technical trader by any stretch but am increasingly looking to see if technical principles offer any insight into what is happening in the market.
Doing a bit of revision on the subject of technicals this weekend. Thought I'd post this, an extract from a book written by one of the highly regarded technical experts. It is a little dated (author) but it would seem his principles still hold true today.
Recognise anything in this passage that we could relate to with SGH?
If not familiar with what means by a base, it is simply a protracted period in a range after a heavy fall (or rise) in share price. Is SGH in a protracted range with volume so-so? The longer it is in this state the nearer MA starts to flatten out and the less relevant is overhead resistance. Theory goes that many of the holders sitting on high averages will have sold out prior to tax year end - therefore the majority of remainder either neutral or minor underwater.
* large base formation is referring to the length of time in a low (or high) trading range (stage 1 formation).
Thoughts from technical experts please.
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