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"Always analyze a security in conjunction with others in its relative market."
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Monday, 24 September 2007 |
With summer out and winter in, I think we may begin to see the money stock for key clothing companies to rise. Rumors of a harsh winter and back to school shopping also add to this bullish blend. When demand rises, so to does supply. When both rise, there is no doubt that money rises.
This is a long term chart for Aeropostale. We put this up just to get a feel for the long term trend. Right now, prices just bounced above the support line (at the second to last white candle), and the Money Flow Index is beginning to rise. As long as prices remain above this trend line (if we were to connect a straight line along the bottom peaks), we can stay bullish.
Here is a look at Aeropostale. Positive divergence is the key to all technical analysis, and we have that here with the rising momentum. Also take a look at the rising volume. When volume is increasing when the price is decreasing, we know that prices will increase. Now it is time to determine that timing.
Right now it is hard to distinguish between the %K (black stochastic line) and the %D (red line). What we are looking for is the black line to cross above the red line. We are also looking for a cross over between the 4-day moving average and the 9-day moving average - this has already happened. As long as prices don't bounce below 19 (the support line) this investment remains bullish.
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