Saturday, March 5, 2011

Am I in the Danger Zone?

Click on the above image to enlarge

I am in a big dilemma now. This is a serious issue here that I am facing. I have bought about $90,000 worth of stock in Axt Inc. and now the stock is not performing as per my expectation. So what should I do now? Should I sell, hold, or run for my life. My entry price for this stock is $7.20.

Once again my experience in chart reading will be very useful as this point in time. The chart shows that AXT Inc is currently consolidating after a huge downward move of this stock. This current volumes indicate that the chart is consolidating with very low volume. It may be the selling is now fully absorbed or the buyer is not buying the stock to push it upward.

The MACD histogram indicates that it is moving upwards toward the center line and perhaps above it. The MACD blue line also shows the curve that it is about to move up to the red line and above.

The RSI clearly indicates that this stock is very much oversold.

The stochastic indicator also shows that the current downtrend is about to change its course. Both the blue and red line below the 20% threshold indicates that this stock is very much oversold. The blue line is also about to cross over to the above the red line, which shows some bullishness in this stock currently.

Based on my above technical analysis on this stock, I would rate it a superb buy. However, I am not god, I cannot be 100% accurate in my prediction on what will happen next for this stock. However, I am praying that my analysis is correct otherwise I will lose some big money in this bet.

There is also high chances that this stock will tumble further after this current brief consolidation. I just hope that it won't happened cause I really can't afford to lose again. Lets all put our hand together and pray for the o' mighty god. Amen.

1 comment:

  1. AXT appears to be in a very sharp decline. It appears to have stablized around 7.00 to 7.50. Generally speaking a stock like AXT has much further to decline than anyone realizes. Peter lynch used to say for a lot of companies its always darker before its pitch black.

    ReplyDelete

Related Posts Plugin for WordPress, Blogger...