CXO - Chart Thread, page-2403

Hi all, there was a bit of chat on Thursday about a bearish momentum divergence developing on the daily and weekly charts, and on Friday a divergence registered on the daily. The ultra high volume bar on Thursday resulted in only a small move up on a narrow spread bar, which was also a potential sign of weakness appearing (supply coming in) which was also confirmed with Friday's down bar. With a 30% increase in only a few days it has been suggested that some profit taking has come in to play, and these "anomalies" on the chart suggest that this is the case, and the latest move may need to be digested and re-charge before the next move up.

To try and get a feel for how deep or how long a potential pullback may be, it's good to look at the background of the chart to put the appearance of these signs of weakness in to context- after all it's a normal part of a typical move up over time. And it doesn't take a chart whisperer to see at a glance that there is strength in the background. Price is sitting in top half of a long term rising trend channel, above a rising 50 and 200EMA, just made an ATH after a breakout of a consolidation wedge which produced a bullish divergence prior to breakout - all obvious signs of strength in the background.

Good luck all, Rooster.