What’s Your Favorite Indicator?
What is your favorite
indicator? It seems every trader has at least moving averages and
volume on the charts. Needless to say, price bars are the most important, but
the proper usage of the indicators can help you to detect hidden messages in the
price movements.
10:04:30
Alert
Starbucks (SBUX) is testing yesterday’s low.
The issue closed below the 20-day EMA yesterday for the first time since May.
Notice the RSI is showing a negative divergence. SBUX is down 0.33 at 45.52.
Look at the chart below. Both the RSI and MACD histogram are indicating clearly
the stock is in trouble. See how advancing prices were met with the lower
readings of the indicators.
Remember, divergences are warning signals. Don’t forget to get a confirmation
from the price movement before entering a trade.