Stock Trading Predictions & Technical Analysis: HGSI

Sunday, November 22, 2009

HGSI - Moving Sideways

HGSI - WAIT

HGSI is currently trading sideways between $26.00 and $29.00. On Friday, HGSI bounced back up $26.00 which may be a sign that it's now heading back towards $29.00. Another up day would give us a short-term BUY SIGNAL with the minor down trend being broken. However, it is possible to see HGSI continue to trade within this range for a while. To get a STRONG BUY SIGNAL, HGSI needs to move up sharply and close over $29.00. A fall below $26.00 would give us a SELL SIGNAL, at which time it could easily send HGSI towards $23.00-$24.00. The last strongest support level would be at the 50 day MA standing currently at $22.00. Despite the bounce back up on Friday, the MACD which is usually a very reliable long term indicator gave us a SELL SIGNAL, and that's one reason to be cautious before taking a long position and WAIT for a clear signal. Please note that we can also currently observe a flag formation which would be confirmed if HGSI jumped over $29.00 which could then go much higher. A move over $29.00 would give us a price target of $29.00+$5.00= $34.00 which is based on the length of the current pole ($29.00-$24.00=+$5.00). The opposite is also possible with a break below $26.00 which could send HGSI towards $22.00-$21.00. Most of the time a flag formation in an up trend will break up but there is always chanced of seeing the opposite occur. Basically, we're having conflicting signals, and that's why it's better to WAIT.

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.