Europa Metals Ltd stock (LSE:EUZ) is currently experiencing a rally in the context of a downtrend. But there is likehood that the rally would not be sustained unless the condition stated below is met.
From May to August 2019, price went flat. Then it rallied massively in August – only to start coming downwards in September. At the present, there is a short-term bearish bias on the market, and price currently seems to be challenging the bearish bias.
ADX period 14 is below the level 20 (poor momentum). The DM+ is above the DM-, which supports the current effort to undermine the recent bearish bias. The MACD default parameters, bas both its histogram and signal lines below the zero line (although the histogram is now breaching the zero line). All these are not yet pointing to any bullish signal.
For a bullish signal to form (a Bullish Confirmation Pattern), there is a need for the MACD to have both its signal lines and histogram above the zero line. In conjunction with the position of the ADX, then it would be safe to go long.
Otherwise, the current rally on EUZ may be an actual trap.
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Is this gobbledgook? Could someone translate it for me please:- (SOURCE = ADVFN 15/10/19):
ADX period 14 is below the level 20 (poor momentum). The DM+ is above the DM-, which supports the current effort to undermine the recent bearish bias. The MACD default parameters, bas both its histogram and signal lines below the zero line (although the histogram is now breaching the zero line). All these are not yet pointing to any bullish signal.
For a bullish signal to form (a Bullish Confirmation Pattern), there is a need for the MACD to have both its signal lines and histogram above the zero line. In conjunction with the position of the ADX, then it would be safe to go long.
Otherwise, the current rally on EUZ may be an actual trap.