The Regular Divergence (2)

 

Stock price is lower low, but indicator is higher low. The price touches the support trend line.

Tips: 

• This is index, not a stock. But the tips should apply as well.
• 2013 dec 13, price and stochastic have divergence.
• Stochastic is to value price momentum.
• The divergence is a regular divergence. Means the price will bouce back. Here is for price lower low, but indicator higher low.
  
• Stochastic works only for a range price move. For strong trend, not working. Here the indicator value is very low, and the stock not in a strong trend swing, means oversold. More probably to bounce back.
• The stock runs in a very long range. The price drops almost on the support trend line.
  
• Over all these, a strong buy hint is here.

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