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The company stock of Centamin Egypt has broken out to the upside – outside of a prolonged consolidation. It is likely that the price would continue to go up as the analysis below shows. The chart below utilizes daily candles (24-hour candles). Based on criteria it is often noticed that signals on the 24-hour time horizon are more significant than signals on smaller time horizons.
Technical Forecast
This company stock (LSE:CEY) was actually bearish recently. After a spell of the bear market, the market entered a frustratingly protracted consolidation phase, especially starting from April 5, 2012. Until July 25, there was no clear victory between buyers and sellers. Then on this very day, the price rose from a low of 56.6, and the stock was trading at 69.05 at the time of writing this article. Technically, the ADX 14 and the MACD (default parameters) are used for this analysis. The MACD histogram is already above the zero line, while its signal line has almost crossed the zero line to the upside. The ADX itself, while confirming the recent sideways movement in the price, is showing further weakening of the market pressure. What is available on the price chart shows that we currently have a Convergence Pattern on it. This happens when sellers are getting tired of their wrestling against buyers. As the strength of the trend weakens and the MACD threatens to start going up, it shows that the bear pressure has thinned out.
Albeit the contemporary price market conditions are different, the dread, fright, emotions resilience has been constant as far as speculators are concerned. Yesterday the price went above 70.4 level but the price was pushed down. We should note that this is no big deal since a price does not go in a straight line. There pullbacks in a bull market as well as rallies in a bear market. Yesterday formed a candlestick pattern called an ‘inverted hammer’ whereas today shows a ‘hammer’. What is happening today means that further southward plunge has been rejected as the price is poised to continue moving up – despite all. It would have to push through the supply levels at 69.50 and 70.00 before going up further. The demand levels at 68.50 and 68.00 could inhibit bearish attempts.
Conclusion: Speculation is closely related to accumulation and distribution. Decreasing accumulation portends that decreasing distribution could impact the market. What is more preferable here on Centamin Egypt stock is increasing accumulation and decreasing distribution. It is one way of seeing significant move. Each market speculator would usually look for a bias and chart pattern, yet it ought to be in agreement with the reality on the chart. No price is too expensive for bulls, even if analytical tools are telling so, though it could be extremely low to be smoothed according to its innate characteristic.
This article is ended with the quote below, which is from one of the most experienced traders alive today:
“Instead of reacting with stunned paralysis, the winning trader views unfavorable market conditions as a learning opportunity. It is a time to gain more market experience. The optimistic trader objectively studies the markets, trying to understand how the market moves and why. It isn’t a time to be stuck, but a time to think creatively and sharpen trading skills. It’s at times like these that it’s time to stand up and cultivate a fighting spirit.” – Joe Ross
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