For Today's chart we've chosen to take a look at BONT because the bears have recently been able to push the price below the short-term support of the 15 DMA. As you can see from the chart below, the Relative Strength Index - an indicator used to determine overbought and oversold conditions - has crossed below a major signal line (down through 70). This crossover is likely to be used by technical traders to suggest a more significant pullback.

We've also added the Parabolic SAR and the MACD, which are also confirming the move lower predicted by the RSI. Notice how the small dots of the Parabolic SAR are now above the price. This is generally a signal used by the bears to suggest a move lower. Given the three technical sell signals, we'd expect to see BONT head toward the support near the 50 DMA



BONT_040406.jpg

You May Also Like

Related Analysis
  1. Stock Analysis

    Celgene's $1 Billion Deal to Fight Cancer

  2. Stock Analysis

    The Fall of the Chinese Stock Exchange and its Impact on Alibaba, Youku Tudou, and ...

  3. Stock Analysis

    Obamacare Affirmed - What's the Investing Impact?

  4. Stock Analysis

    Sarepta Therapeutics One Step Closer to Drug Approval

  5. Stock Analysis

    Lions Gate to Bring Iconic Game to the Big Screen

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!