| Tip of the Week |
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"Always analyze a security in conjunction with others in its relative market."
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Clean Energy Fuels Corp. (CLNE) |
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Wednesday, 26 September 2007 |
To begin any study, you must look at a long term chart to acquire an overall feel for the direction that the trend is heading. Unfortunately with this security, we don't have a long term chart since it is fairly new. However, we can see the beginning of a strong trend.
As you can see from the price channel trend lines, the original support for CLNE became the resistance around the beginning of September. Recently, this resistance has reversed into its previous trend by becoming the support again. Resistance still remains with the upper trend line. If price breaks below 15, or the new support, this is a clear SELL sign. Take note of the descending RSI indicator - or momentum. This is a bearish sign in the works, but it looks like a reversal if it begins to break the resistance line.
Now switching back to a shorter term chart (or at least attempting to), we can see that the PPO indicator is showing us a a bullish pattern of prices over a span of time. A speed of momentum indicator, ROC, has been decreasing until recently: a nice volume spike has caused a volatile shift in momentum and prices. Below, we also show a close look at the support line. If prices fall below it, SELL. Do you see the increasing volume? This is a sweet bullish sign by far.
Below, we use the last stochastic technique (setting %K to 39 days). Once the black line crosses above the red line, this is a BUY signal. It looks like it is on its way. On the contrary, notice how the spike in volume - and naturally price - caused an EMA switch. The 18 day moving average is now below the 4 day moving average unlike before September. This is bearish. However, don't give into this sign, in a long-term stance, since our main indication of bearish is if price drops below the support line in the above.
And finally, we decided to overlay the price with Bollinger Bands. This is a bullish sign indeed, since the price expanded upward so rapidly that the bottom band actually dropped due to this volatility shock. Don't take this as a bearish sign.
All in all, the only way to declare this stock as a bear is if it drops below the support of 15. Right now, it remains a clear buy.
Good luck,
AccuInvestor
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