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Price:GLW made a quick recovery, gaining back more than 10% in just a week, and the price is now making a plateau, not sure what to do. Notice how the price went all the way from below all the Moving Averages to above the 50 day Moving Average (50MA). So, first the stock looses 20% in a few weeks, and then gains 10% back in another week, then flat for another week. Wild price action! Volume: Volume was higher than average the last weeks, and was especially high during the last bottom, indicating plenty of enthusiastic sellers and buyers. The last week volume has dropped off, traders are waiting to see where the price is going. Stochastics: Stochastics indicates that the stock is severely overbought right after being severely oversold. ADX, +DI and -DI: +DI is making a nice pivot low above -DI, saying that the bulls are in control, but the last pivot high of +DI did not make a new high above the previous pivot highs of -DI, which is definitely not a bullish sign. ADX is above 25, but trending down, meaning whatever strength the current uptrend has is fading. So, even though the bulls think they're in control, they aren't really asserting their control. MACD: MACD looks pretty good. Notice the series of higher lows MACD made while the series of price had lower lows, which is a bullish divergence. MACD is also far in buy territory and looks like it might make a low above the zero line. Conclusion: This is a setup with confusing and contradictory signals. There are some positive signals (healthy MACD, ADX above 25, +DI above -DI, price poised to take off) and negative signals (ADX weakening, +DI not assertive enough, stochastics overbought, price action too wild). In situations like this it is best to not trade the stock at this time, and wait for the price to make up its mind. Below is the stock a couple of weeks later. Price decided to make another wild swing down, attempting to make a triple bottom. Stochastics swung all the way back to oversold, -DI is in control again with an assertive pivot high. A short at the setup above would have worked out great, but was not exactly obvious. At this time the stock is testing its lows, so it is best to stay aside a bit more to wait and see if this will really be a triple bottom, which would be very bullish!  Chart by
www.FreeStockCharts.com
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