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Victoria Oil and Gas (LSE:VOG) shares are not worth having until the condition below is fulfilled. What is happening right now is an abortive rally in the context of a weak market. In spite of the bull’s despondency, the shares would continue to fall lower. This is only one of the numerous bear markets earth wide.
Technical Forecast
The price chart of Victoria Oil and Gas shows that the long-term bias on this market is bearish. This bias is intact, and no long position is recommended right now. Technically, 2 parallel Trendlines and the 14-period Relative Strength Index are used. In the most part of October 2012, the market was in some equilibrium phase, with no clear direction (as indicated by the Trendlines). Towards the end of October, the price broke the lower Trendline and closed below it. Since then, the price has trended lower. We can also see that the RSI 14 is also below the level 50. This is a confirmation of a weak market! The RSI 14 has gone into the oversold level this month, i.e. below the levels 30 and 20. No wonder, the current rally attempt is just a negligible pullback in the market. The shares are not worth having until this bearish trend is conspicuously over. There are many ways of knowing when the bearish phase is over. One of them is when the RSI 14 period crosses the level 50 to the upside, but another factor must be used to confirm this.
The market closed at 2.15. There are potent resistance lines at 2.50 and 3.00; whereas there are weak support lines at 1.50 and 1.00. Rapid, strong market pressure is invariably an omen of rally or pullback since somebody is not prone to be patient enough to add or deduct from significant orders. That person would definitely move the markets. One method of measuring the pressure on the price is to consider closing prices. If certain smart money is not satisfied with the shorting or buying of big positions in a trading period, you would perceive serious southward or northward biases at closing prices. It is safe to conclude that downward or upwards attempts would resume the following trading period, especially with high volume. This would make the instrument in question move seriously in the near-term.
Conclusion: Always remember to stay calm in the markets – breathing easily. No matter what a market does, peace comes from the fact that your safety plan is in place. Markets will forever trend and consolidate alternatively. Sometimes, they trend upwards, sometimes downwards. Victoria Oil and Gas stock would rally protractedly one day (but not in the near-term). There will never be an everlasting trend. Trade only what you see: Buy wen the market is going up only, and sell when it is going down. The market does not care about you. Simply keep on doing what is logical and rational.
This article is ended with the quote below:
“…Some novice traders are afraid to acknowledge their limitations. They believe that admitting their limitations is like saying they have low self-confidence. They create a false sense of self-confidence to quell their inadequacy, believing that they can trade under market conditions that they can’t possibly know how to trade.” – Joe Ross
