First published on SharesInvestment website on Monday 12 April 2010. Articles contributed to ‘Trend Spotting’ will be published here 1-2 days later.
Jaya Holdings is gathering momentum.
Chartists consider a security price to be in an uptrend when it is above its 200-day moving average (black line on chart). Jaya therefore left its downtrend and establishing an uptrend since December 2009. The momentum is increasing because shorter term moving averages are diverging.
Since leaving the 200-day moving average behind, it has displayed classic rally – retracement patterns. As of writing this article, it is going through a rally phase.
Each rally phase is characterized by high volume while the retracement level should display low volume. Each rally brings in new entrants while some take profit at retracement.
Patient investors can wait for the next period of retracement. The previous highs offer a good resistance turned support level to consider entry. Other moving averages such as the 20-day and 50-day also provide good clues.
Jaya Holdings on upward climb
