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BOLLINGER BANDS


Immucor Shows Relative Strength

07/16/08 08:59:21 AM
by Arthur Hill

The market has been hit hard over the last few two to three months, but Immucor has held up well by forming a potentially bullish consolidation.

Security:   BLUD
Position:   Accumulate

Figure 1 shows Immucor (BLUD) with weekly prices over the last two years. The stock stalled throughout 2007 and then broke support with a sharp decline in early 2008. Despite this support break, the stock rallied back to broken support and consolidated the last three to four months.

FIGURE 1: BLUD, WEEKLY. The stock stalled throughout 2007 and then broke support with a sharp decline in early 2008.
Graphic provided by: TeleChart2007.
 
The ability to recover after such a sharp loss shows resilience, but the stock is meeting resistance from the 50-day simple moving average. A flag formed and this pattern is potentially bullish. There has been no follow-through after the recovery surge and a breakout is needed to turn bullish again.

Figure 2 shows daily prices with Bollinger bands. Note how the bands widened when the stock surged and volatility expanded in March. As the consolidation unfolded, the bands narrowed and volatility contracted. The bottom indicator window shows the Bollinger band width. These bands have been narrow in those two months as the stock consolidates. Such periods of contracting volatility are often followed by a period of expanding volatility.

FIGURE 2: BLUD, DAILY. Note how the Bollinger bands widened when the stock surged and volatility expanded in March.
Graphic provided by: TeleChart2007.
 
Figure 2 shows daily prices with Bollinger bands. Note how the bands widened when the stock surged and volatility expanded in March. As the consolidation unfolded, the bands narrowed and volatility contracted. The bottom indicator window shows the Bollinger bandwidth. These bands have been narrow two months as the stock consolidates. Such periods of contracting volatility are often followed by a period of expanding volatility.



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.

Title: Editor
Company: TDTrader.com
Address: Willem Geetsstraat 17
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