HOT TOPICS LIST
- MACD
- Fibonacci
- RSI
- Gann
- ADXR
- Stochastics
- Volume
- Triangles
- Futures
- Cycles
- Volatility
- ZIGZAG
- MESA
- Retracement
- Aroon
INDICATORS LIST
LIST OF TOPICS
PRINT THIS ARTICLE
by Arthur Hill
Arkansas Best has been a top performer in 2008 so far, but resistance is at hand and a bearish candlestick reversal could spell lower prices ahead.
Position: Sell
Arthur Hill
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
PRINT THIS ARTICLE
RESISTANCE LINE
Arkansas Best Hits Resistance
04/10/08 08:54:10 AMby Arthur Hill
Arkansas Best has been a top performer in 2008 so far, but resistance is at hand and a bearish candlestick reversal could spell lower prices ahead.
Position: Sell
| Figure 1 shows Arkansas Best (ABFS) with weekly prices. The stock broke down in the second half of 2007 with a sharp decline and then recovered in 2008. This recovery retraced 50% of the prior decline. A countertrend rally or corrective rally is expected to retrace 38–62% of the prior decline; 50% is right in the middle and marks a good spot to expect resistance. |
|
| FIGURE 1: ABFS, WEEKLY. Arkansas Best broke down in the second half of 2007 with a sharp decline before recovering in 2008. |
| Graphic provided by: TeleChart2007. |
| |
| In addition to this key retracement, ABFS is meeting resistance from broken support. This is a key tenet of technical analysis: broken support turns into resistance. The stock first hit resistance three weeks ago and formed a candlestick with a long upper shadow. This intraweek pullback affirms resistance. |
| Figure 2 shows daily prices focusing on candlesticks. The overall trend is up and the stock surged above 33 at the end of March. This surge was short-lived as a harami formed and the stock pulled back (blue box). There was another bounce in early April, but the stock formed a lower high and declined sharply two days ago. Trendline support is now under threat. |
|
| FIGURE 2: ABFS, DAILY. Here, the overall trend is up and the stock surged above 33 at the end of March. |
| Graphic provided by: TeleChart2007. |
| |
| The bottom indicator shows the stochastic oscillator forming a lower high in April. This is not a negative divergence, but it does show waning upside momentum. Further weakness below the late March low would be bearish for momentum. Back to the price chart, a break below the late March low would reverse the three-month uptrend and call for lower prices. |
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
| Title: | Editor |
| Company: | TDTrader.com |
| Address: | Willem Geetsstraat 17 |
| Mechelen, B2800 | |
| Phone # for sales: | 3215345465 |
| Website: | www.tdtrader.com |
| E-mail address: | arthurh@tdtrader.com |
Traders' Resource Links | |
| TDTrader.com has not added any product or service information to TRADERS' RESOURCE. | |
Click here for more information about our publications!
Comments
Date: 04/10/08Rank: 4Comment:
|
Request Information From Our Sponsors
- StockCharts.com, Inc.
- Candle Patterns
- Candlestick Charting Explained
- Intermarket Technical Analysis
- John Murphy on Chart Analysis
- John Murphy's Chart Pattern Recognition
- John Murphy's Market Message
- MurphyExplainsMarketAnalysis-Intermarket Analysis
- MurphyExplainsMarketAnalysis-Visual Analysis
- StockCharts.com
- Technical Analysis of the Financial Markets
- The Visual Investor
- VectorVest, Inc.
- Executive Premier Workshop
- One-Day Options Course
- OptionsPro
- Retirement Income Workshop
- Sure-Fire Trading Systems (VectorVest, Inc.)
- Trading as a Business Workshop
- VectorVest 7 EOD
- VectorVest 7 RealTime/IntraDay
- VectorVest AutoTester
- VectorVest Educational Services
- VectorVest OnLine
- VectorVest Options Analyzer
- VectorVest ProGraphics v6.0
- VectorVest ProTrader 7
- VectorVest RealTime Derby Tool
- VectorVest Simulator
- VectorVest Variator
- VectorVest Watchdog