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On the Downside by kathia |
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Microlog Corporation (MLOG)     |
Microlog has been downtrending for a while. My first clue was the red bars over the price graph, but I don't rely solely on these. Don't get me wrong - they give you the heads up on what kind of position you might take, but I personally like a little more reassurance. Call me cautious. After checking out the MACD bars over the price graph, I always examine the MACD graph (third from the top). The graph provides a more in-depth look at how strong the trend is. I keep an eye on a stock that is trending; I take action when a stock is trending hard. Downtrends occur when the blue line crosses over the red. (Well, not always... It also depends on where the crossover takes place. When the blue line rears its ugly head and bypasses the red line above the centerline, a downtrend doesn't get signaled until the lines drift below the centerline.) The centerline plays an important role in determining how strong a
downtrend is. If a crossover takes place below the centerline,
that's a fairly good indication that the stock is indeed in a downtrend.
The farther it crosses below the centerline, the better! (If, of course,
you are shorting that stock.)
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