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The Investor Sentiment - Equity and investments forum for Sri Lankans

The Lankan Investor Forum - A more respectable and reasonable place for members to discuss matters regarding the CSEThe Lankan Investor Forum - A more respectable and reasonable place for members to discuss matters regarding the CSE

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Nuinth
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    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market

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    Post by NC` Tue Sep 08, 2015 5:14 pm

    http://www.marketwatch.com/story/bearish-divergence-is-warning-investors-not-to-buy-the-dip-in-the-stock-market-2015-09-04

    A chart signal that warns you not to buy can be just as useful as one that warns you it’s time to sell. Bearish divergences don’t necessarily suggest investors should sell, but they do warn that when a breakdown in price does occur, they should not fight it. The pattern now indicates the index could fall a lot further before the opposite “bullish divergence” appears.
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    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Empty Re: ‘Bearish divergence’ is warning investors not to buy the dip in the stock market

    Post by smallville Tue Sep 08, 2015 6:19 pm

    Good one...

    S&P 500 may fall near 1400-1500 as the first support.. If macro economies are worse at their levels, the more deeper the steep could be..

    We should apply same for ASI as well and check their levels..


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    Post by pathfinder Tue Sep 08, 2015 6:33 pm

    Thanks NC for sharing.
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    Post by slstock Wed Sep 09, 2015 3:06 pm

    Thank you. Let see the accuracy of the prediction in short term?

    Presently CSE does not have any issue as such.


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    Post by Hybrid Wed Sep 09, 2015 3:47 pm

    Looks like many factors are making a composite impact on our CSE!

    The Elections of course, the indecision in selecting the Ministers and agreeing on a National Govrnment, the global markets falling.

    Now we have on our hands the "Blood Moon" on the 28th of Sept., Rise of the Japaneese stocks, increase in the refugee crisis, free floating USD/LKR, production overcapacity in China.

    What can we make of this scenario?

    Let's hope that JKH, COMB, HNB, DIAL, NEST makes a comeback soon.
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    Post by HUNTER Wed Sep 09, 2015 8:19 pm

    There is no apparent Bearish divergence in CSE right now.

    AND;

    I am planning to have a dip in the dip this time very soon.


    (BTW: Thanks NC for the post +)
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    Post by malanp Thu Sep 10, 2015 8:00 am

    HUNTER wrote:There is no apparent Bearish divergence in CSE right now.

    AND;

    I am planning to have a dip in the dip this time very soon.


    (BTW: Thanks NC for the post +)

    If you look at charts, it will not show a Bearish Divergence, however, fundamentally still there is a possibility that, prices might come down later after short term prices up, or get stagnated for a while..

    That amounts to a technical Bearish Divergence..


    Last edited by malanp on Thu Sep 10, 2015 12:26 pm; edited 2 times in total
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    Post by sashimaal Thu Sep 10, 2015 8:36 am

    Thanks NC for the article and SLS/Hunter/Malan for explaining that CSE doesn't have a Bearish Divergence. +
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    Post by mymoney Thu Sep 10, 2015 10:15 am

    Is divergence always a trusted indicator ?, Bellow CIND 5 year weekly char shows a  
    bearish divergence in RSI and MACD also, But I don't think CIND is going to crash  Surprised

    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Cind12
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    Post by HUNTER Thu Sep 10, 2015 11:05 am

    mymoney wrote:Is divergence always a trusted indicator ?, Bellow CIND 5 year weekly char shows a  
    bearish divergence in RSI and MACD also, But I don't think CIND is going to crash  Surprised

    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Cind12

    As I have observed, B.D. (Or Bullish Divergence) does not work always in daily charts in CSE. Probably work in weekly charts (I have not checked though).
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    Post by Backstage Thu Sep 10, 2015 11:13 am

    Please keep discussion going, much appreciated.
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    Post by Nuinth Thu Sep 10, 2015 11:32 am

    Nice discussion, keep it up guys.
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    Post by HUNTER Thu Sep 10, 2015 12:22 pm

    Had a look at the weekly ASI.

    As I noticed,

    There is no Bearish Divergence in ASI right now.
    There has been a Bullish Divergence at the end of 2008 and a Bearish D. at the end of 2010 which would have worked very well.

    There has been a Bearish D at the end of 2014 but has not been very effective.
    That could mean CSE is has been very stable during the very recent past (and still).

    Here is the chart.
    (Please note that different parties can interpret these differently; I love to hear other views)

    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Bearis10
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    Post by NC` Thu Sep 10, 2015 1:24 pm

    Seems some're get misunderstood.. Don't get mess this with CSE. I've notice this article recently, and I shared for to improve the knowledge and understanding of Technical readings.. (Many are known this divergence patterns, but need to remind these basic understandings time to time)
    However, good discussion is going... Very Happy
    And Hunter explained ASI with a chart.. Thanx for it.
    There was a divergence of ASI, but now divergence has break.. I'll explain this at evening, when I got a time... Very Happy
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    Post by NC` Thu Sep 10, 2015 4:14 pm

    Bearish divergences and bullish divergences can be identified in momentum indicators, which measure the rise or fall in price, or in other words strength of the trend.
    Trend means series of higher highs (HH) or lower lows (LL). Divergences are hard to identify when ranging or in accumulation or some times not at all.
    Trend is like a rubber ball which bump when it on floor. At each time it hits on floor(resistant) it waste some energy so at next time, it'll not make a new high and at each time it reduce the height. Same in a stock trend, at each high ( hit resistant) selling pressure rise and buying pressure reduce. At each high sellers are rush to book profit and buyers interest get lower as price moves up. So, latter it forms double tops, triple tops (Reversal patterns) etc.. Such as rubber ball stops it bumps after energy is gone.
    Divergences occurs when the momentum get reduces which means the rate of climb or the strength of the trend.
    However, there're certain principles need to know when using indicators. Most important thing is to know is chart it self is the Boss. (which can be see by your naked eye without any indicators). Indicator is Assistant. So keep in your mind " Do not keep assistant as your boss". So, do not take decisions based on indicators.
    Divergence is something as see as "yellow colour" light in traffic signal light. "Yellow colour" say signal that "Get ready". Same in here, divergence say get ready for any thing, but we don't know which colour next it take by the master chart. Sometimes might be green again or Red. So, divergences are taken as warning signals.
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    Post by NC` Thu Sep 10, 2015 4:48 pm

    Thanx Hunter... And Hunter has explained, and I agree with him. At this moment we cannot indentify divergence in ASI. This's just addition to his graph.
    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Bearis10
    And do not forget indicator is just assistant. Do not take decision based on assistant and donot get messed all using indicators, bcz chart may one thing and indicator say another thing, But most important is the chart it self. Indicator is just assistant.
    (compare those with trending stocks all time (their past) and you may understand how they behave)...
    Very Happy
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    Post by 007 Thu Sep 10, 2015 6:40 pm

    Thanks NC and Hunter for a thought full education
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    Post by smallville Thu Sep 10, 2015 6:57 pm

    To have more accuracy, we need to consult the Weekly Charts not daily charts..


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    Post by pathfinder Thu Sep 10, 2015 7:52 pm

    A good discussion after sometimes,Divergence is a useful pattern but should not use as a rule of thumb.It's a sign of possible trend reversal.But it may not happened.
    As Small mentioned weekly charts are better than daily charts.Usually charts work best in trending markets.
    Our CSE is relatively a small market.So the chances of charts to go wrong is higher as the liquidity is low.

    Can't agree with NC on assistance matter.The boss can not work properly in the absence of non of his assistances.
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    Post by slstock Fri Sep 11, 2015 12:23 am

    Hunter, thanks for the effort...

    I see a divergence in 2014 and late 2010 at CSE.

    But where is the one in 2008/2009? My eyes couldn't spot one ? Is it deceiving me?


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    Post by HUNTER Fri Sep 11, 2015 8:21 am

    slstock wrote:Hunter, thanks for the effort...

    I see a divergence in 2014 and  late 2010  at CSE.

    But where is the one in 2008/2009?  My eyes couldn't spot one ? Is it deceiving me?

    Zoomed in to 'Daily' for clarity.

    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Bearis11


    Anyway, in my view, these patterns cannot be proven scientifically; there is some subjectivity associated.
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    Post by smallville Fri Sep 11, 2015 6:45 pm

    All indicators are laggin indicators.. even RSI, ADX, MACD.. However, they can give u a good indication what's gonna happen next.. But also they can give you wrong implications - and thats why they are called "laggin"..

    See KZOO chart for a change.. It almost gave a buy before NP buyin in.. But the prices didnt match noh?
    But for matters like indexes we can still have a good idea using indicators.. And u can always use price action to find support levels even without indicators Smile

    So in modern days, our action before indicators "show" it make sense..


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    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Empty OSEA building positive divergence

    Post by mymoney Tue Sep 15, 2015 8:38 pm

    ‘Bearish divergence’ is warning investors not to buy the dip in the stock market Osea10

    OSEA is consolidating 23-25.50 range while we can see some slight positive divergence in both RSI and MACD. Is OSEA building some positive momentum silently ?
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    Post by HUNTER Tue Sep 15, 2015 9:50 pm

    I mentioned my view on OSEA last week.

    https://forum.lankaninvestor.com/t4908p285-this-weeks-most-discounted-101-shares-by-hunter#50140

    We can expect few more counters making positive divergence within next few weeks (in my view).
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    Post by Backstage Thu Sep 17, 2015 1:11 pm

    Now close to 7100.
    Yellen, Geneva and Warrant 22. Basketball

      Current date/time is Sat Jul 27, 2024 9:30 am