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VOLUME


Kepple Corp. Worth A Buy?

11/29/11 12:03:41 PM
by Koos van der Merwe

The share price of Kepple Corp. has made a strong V bottom. Is it worth a buy?


Security:   KPELY
Position:   Accumulate

When companies like Kepple Corp. (KPELY) start giving buy signals, especially V buy signals, one should sit up and take notice. The suggestion is that international trade is starting to pick up, and the world economy could be recovering from its recent crises.

FIGURE 1: KEPPLE, DAILY
Graphic provided by: Omnitrader.
 
Figure 1 is a daily chart of Kepple. The chart shows how the price fell from a high of $18.53 on May 5, 2010, to the low of 10.95 by April 10, 2011. From there it rose in a V formation to a high of $15.54 by October 28 before correcting to its present level of $13.33. The chart shows that the price has broken below its JM internal band, giving a sell signal on November 16. The JM internal band indicator is a 15-period simple moving average offset by 2% positive and 2% negative. The ergodic oscillator is still negative, but the stochastic relative strength index (RSI) cycle indicator shown is oversold and could soon give a buy signal. Volume has been falling as the price fell, suggesting strength.

FIGURE 2: KEPPLE, DAILY, SHOWING VOLUME PATTERN
Graphic provided by: Omnitrader.
 
Figure 2 is an enlarged chart of the daily chart and shows that a buy signal has been given on the vote line. This is because the 12-period RSI strategy has given a buy signal. The chart also shows that a volume trend pattern was triggered on November 22. A volume trend pattern suggests that the price will continue in the same direction. The pattern was triggered with a rising price, and although the price declined the day after the pattern was triggered, the next two days were positive.

FIGURE 3: EXPLANATION OF VOLUME PATTERN
Graphic provided by: OmniTrader.
 
Figure 3 shows the strategy relating to the pattern signal given.

Kepple is a buy at present levels, with a long-term hold.



Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address: petroosp@gmail.com

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