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It is expected that Bellzone Mining Shares (LSE: BZM) will continue to fall lower and lower as explained in this article. Never think a price will not fall any further as a result of being appearing very cheap. Bullish corrections would merely enable sellers to enter the markets at higher prices in the context of the current downtrend. This is a market that is being pushed lower and lower by bearish pressure.
Technical Forecast
This market has been in a downtrend – that is the overall trend. Average Directional Movement Index (ADX) period 14 and Moving Average Convergence Divergence (MACD, default parameters) are used for this analysis. What we currently have on the chart is a Bearish Confirmation Pattern. The ADX shows that the market pressure has been low for a considerable amount of time, yet the -DI (Directional Index) is above its +DI counterpart, emphasizing the bears’ supremacy in spite of what is happening right now in the markets. The MACD signal line and histogram are both below the zero line. The only logical thing to do here is to look for a sell signal. The market corrected higher last week, a Doji candlestick pattern formed on September 10, 2012 (showing the indecision in the market), and then, the price began to come down further. You may take a look at the chart.
This is a SELL signal, no matter what we think. At the time of writing this article, the Bellzone stock was trading at 14.25. The nearest distribution zones are 15.00 and 15.50; but the price is expected to trade lower and test the accumulation zones around 13.00 and 12.50. This still portends a clean signal showing expert distribution by professionals. In contrary, looking for sustained volatility to the upside is not recommended. Even after the market has been corrected higher in the near-term, it would signify some clandestine short-selling by institutions, just as a pullback in a downtrend is often an indication of institutions that are buying into a bull market. Experienced traders have learned to accept the fact that the market could not care less, it is not even aware of what our positions are.
Conclusion: It is obvious that a trading advantage can be gained with chart analysis. This market is weak. Fright causes prices to nosedive massively, as covetousness causes prices to rally massively occasionally. Chart analysis and market reading constitute a method of measuring the biases present in market players – something that remains timeless.
This article is ended with the quote below:
“There is no trader who only earns profits. Loss-trades do not mean that the trade is a bad one or that the whole strategy is poor. A trade is only then a bad one if it is executed randomly, emotionally and without a plan and a strategy.” – Florian Erik Neinert
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