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A Truly Oscillating Stock: SEG by kensey

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	Seagate (SEG)	Oscillation is range bound price action that occurs in waves. When you see many consecutive, ill-timed trending bars, you should recognize that as a symptom of oscillation rather than a definitive trend. In most cases, oscillation is not something to look for in a stock. Price action for Seagate (SEG) can truly be characterized as oscillation. The big tip-off is the ill-timed MACD trending bars. However, these waves are smooth: about three weeks in length. In this instance, the waves are long enough to open windows of trading opportunity in both directions that have a high probability of success. The stochastic indicator graph (which is the last graph in the set) encapsulates Seagate's oscillatory nature accurately. There have been four excellent trading opportunities since July: When the stochastic lines emerged from oversold in late July (go long) When the stochastic lines emerged from overbought in mid-August (go short) When the stochastic lines emerged from oversold in late August (go long) When the stochastic lines emerged from overbought in mid-September(go short)
	Note the last one in mid-September. There was a little bit of a feint where the lines emerged from overbought, dropped down a bit, and then went back into overbought again. This could have caused you to get shaken out (especially if you had CNBC on and the world was mightily bullish that day, which is a reason to keep it off -- you either reference the euphoria of sentiment or the chart). The main reason is that the 13-day EMA was still pointing higher when stochastic went into oversold. You want to wait until the 13-day EMA is flattening out before you enter a short trade based on stochastic. At the extreme right edge, you once again have the lines in oversold territory about to start heading up the chart. What do you do? I would be cautious. The 13-day EMA is still pointing down so it might be a bit early to go long right here. But the market is oversold and due to bounce, and the downside risk appears slight. Also, down volume this week for Seagate was low. Next: Oversold in an Uptrend: VKNG

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