Here we see how the DMI indicator can signal a good entry (picture below).

1 - 7) This is an highly volatile stock, making regular 10 - 20% moves each month.  One way to trade these swings is to buy (or short) after each steep drop or gain, but it's hard to find any place where the indicators line up nicely, signaling an entry with a high chance of success. 

8) Between 4 and 8 the swings were less than between 1 and 4, with volatility relaxing a bit.  Look closely at the -DI (red) and +DI (green) lines of the DMI / ADX indicator.  The -DI line has been steadily losing strength, and it bottomed out at high point 7, and barely recovered at the minor low at 8.  The +DI line, in contrast, shows great strength, making a high at 7 and a new high at 8.  This strong difference between a peetering -DI and a soaring +DI, and an (blue) ADX line creeping up, show a potential for a great price move up.  Fast stochastics crosses the slow one around the 20 line.  MA's are squeezed (see brown Squeezed MA indicator line), signaling a change of trend.  MACD bottoming out at the zero line.  Nice volume the last few days.  Everything says:  price going up!