Dear Friends
Directional system (ADX, DI+, DI-) is a good system to tell when new Trend is about to form. Also they provide good trading opportunities and risk are low when the trends are young. So how to we use this system to predict new forming trend. Let us see what Alexander Elder has to say about this
Quote
The single best signal of the Directional System comes after ADX falls below both the directional lines. The longer it stays, the stronger the base for the next move. When ADX rallies from below both the Directional lines, it shows that the market is waking up from a lull. When ADX rises by four steps from its lowest point below both Directional lines it Rings a Bell on a new trend. If the DI+ is on top the trend will be up and DI- is on top the trend will be down.
Unquote
Now while we wait and watch how big the current correction is going to be, let us have look at our market for possible new trends. The ADX is has reached the lowest point for the following stocks.
ARVIND MILLS
The ADX values has been languish between 15 to 12 for a long time. The stock was moving sideways from May. The DI+ and DI- were crisscrossing each other showing a keen fight between the bulls and bears. Now they have started diverging with DI- on top. The ADX has also started moving up. The RSI and MACD are giving bearish indications. All these indicate that we are in an intermediate downtrend for this stock. This has already broken its support at 128.
COLGATE
The ADX has been at its lowest level for quite some time. The DI+ and DI- show a keen fight between the Bulls and Bears. This one seems ready for a good big move. Which way? It will be worth watching.
NUCLEUS & PAPER PRODUCTS
Looks like these are ready to start a downward trend. The ADX has started an upward movement. Now DI- is on top and DI+ is gone below ADX. The MACD and RSI are giving bearish signals.
Other stocks whos ADX are having low values and worth watch are
BHUSAN STEEL
GLAXO
GOETZEIND
RAINCALCIN
RANEBRAKE
TEXMACOLTD
TRENT
I will keep you update on the above stocks. It will also interesting to see how Elders theory works. I welcome all your views on this.
Regards
Karthik
Directional system (ADX, DI+, DI-) is a good system to tell when new Trend is about to form. Also they provide good trading opportunities and risk are low when the trends are young. So how to we use this system to predict new forming trend. Let us see what Alexander Elder has to say about this
Quote
The single best signal of the Directional System comes after ADX falls below both the directional lines. The longer it stays, the stronger the base for the next move. When ADX rallies from below both the Directional lines, it shows that the market is waking up from a lull. When ADX rises by four steps from its lowest point below both Directional lines it Rings a Bell on a new trend. If the DI+ is on top the trend will be up and DI- is on top the trend will be down.
Unquote
Now while we wait and watch how big the current correction is going to be, let us have look at our market for possible new trends. The ADX is has reached the lowest point for the following stocks.
ARVIND MILLS
The ADX values has been languish between 15 to 12 for a long time. The stock was moving sideways from May. The DI+ and DI- were crisscrossing each other showing a keen fight between the bulls and bears. Now they have started diverging with DI- on top. The ADX has also started moving up. The RSI and MACD are giving bearish indications. All these indicate that we are in an intermediate downtrend for this stock. This has already broken its support at 128.
COLGATE
The ADX has been at its lowest level for quite some time. The DI+ and DI- show a keen fight between the Bulls and Bears. This one seems ready for a good big move. Which way? It will be worth watching.
NUCLEUS & PAPER PRODUCTS
Looks like these are ready to start a downward trend. The ADX has started an upward movement. Now DI- is on top and DI+ is gone below ADX. The MACD and RSI are giving bearish signals.
Other stocks whos ADX are having low values and worth watch are
BHUSAN STEEL
GLAXO
GOETZEIND
RAINCALCIN
RANEBRAKE
TEXMACOLTD
TRENT
I will keep you update on the above stocks. It will also interesting to see how Elders theory works. I welcome all your views on this.
Regards
Karthik