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The other thing please all bear in mind is, that there are a gazillion books on this (TA) its not overly complicated per se, but there is a lot to it with all different chart patterns and all different indicators discussed at length, all I am doing is giving you a short paragraph each time so by all means investigate further but please don't think all I am saying is all there is to know.
The crux of it is, its people who move the SP by buying and selling (not the company in question) and herds of people are generally predictable. Especially when the 2 main emotions are fear and greed, (which is why you get price manipulation, to stoke even further those emotional reactions to certain stimuli, ie a share shooting up! "Yikes I had better buy now before I miss out all together!!! "only for some to buy at the top and the share falls back down again. Oh, that's a great feeling...frustration, loss, being conned! you name it)
Anyway, that's why I like TA. It deals with people and the psychology that drives their decision making.
Thanks Wyndrum and D-Geeman that looks like what i'm looking for. Sorry i missed it the first time around.
DG, lots of people think charting is beyond contempt, I mean they really think anybody who talks about is dangerous and should be locked up in case any soul is sucked into it.( Some are ambivalent to it but the first reaction is very common)
Charting is normally used to predict short term movements intra day or maybe a few days/weeks and the criteria is high volatility, very large stock or preferably an index that cannot be manipulated by MM's and very tight spreads.
As eve is none of those I did not see the point in discussing it. And as you know although I had been in and out of Eve previously I was not convinced that anything had changed this time around.
As my mind has changed on EVE I still use the methods that I have used in the past when I was a bond trader and although as I say, not directly transferable, nevertheless its a tool I employ to a least try and time my entry and exit points of stocks.
As we all rub along pretty well on this board I took the view that it might be worth the posts that I have made on this subject without potentially upsetting too many on here. But its not everybody's cup of tea.
Thanks for detailed explanation Wyndrum. Fascinating TA. GLA!
Fizzgog, Wyndrum did mention this a little while ago. I think this is what he said:
Go to Hargreaves Lansdown and click on a share eg https://www.hl.co.uk/shares/shares-search-results/e/eve-sleep-plc-ord-gbp0.001
Then ‘Charts and Performance’
Then it’s under the ‘Lower Indicators’ – 'Relative Strength Indicator Cutler', nearer the bottom
PS In contrast to Wyndrum, I first bought Eve – when it fell to 18p – for the least scientific of reasons; Mrs Geeman and I met someone who was part of the first management team at a BBQ and he said they were great mattresses (then we bought a mattress and it is.) Looks like it was a good BBQ to have attended.
Hi Wyndrum, your posts have intrigued me enough to delurk for a moment. Thanks to you and others on here for educating this noob. Your explanation of RSI goes some way towards explaining what sometimes seems to me the baffling movement of SPs. Do you have a trusted site that you use to list the current RSI of a share? I've found RSI lists of overbought and oversold but what would be even better would be a page that shows a specific stock's current RSI. Thanks.
Wyndrum, a slightly impertinent question and feel free to ignore!
You've been doing this for years by the sound of it. How come you only started posting your (helpful and provocative) thoughts in April or May?! You seem to enjoy the exchange of opinions and find them useful too.
CI, I'm no expert on the technical side of this. All chart patterns are, are graphical representations of the SP movement. The theory being its not the company that moves the SP, but people buying and selling and as peoples as a group are predictable therefore, so the theory goes, chart patters could/should repeat themselves. To help refine this further algorithms were designed to increase the accuracy in conjunction with the chart pattern.
And experience of the RSI suggests that above 80 its over bought and therefore likely to fall and when under 20 likely to be over sold and therefore likely to be bought. and that's because the RSI is linked to the SP through the algorithm . So on the way up the RSI moves up with the Sp and likewise down with a fall. What determines the exact figures is part of the algorithm of which I know nothing.
Very short term the new resistance is the latest high at 3.88p it is too early to tell how tough this will be to break as its never been tested.
Personally fwiw, I 'm not fixated on it as presently this looks like a straightforward retrace so the SP can move further upward, so I don't see as of writing any particular significance other than it was a high, of 3.88p
Going further forward it's harder to predict a new level because for a long time, over 12 months, it was about 5,6,7p and just very gradually declined making particular levels of support not very clear.
My take (and looking at the bullish case), is given the explosive change recently I think it will go to 6.50p ish and that will be a target to break through and then on 10.5p and then to 17p and then to 25p.
If the turnaround in Eve's fortunes is as dramatic as we all hope then I see 17-25p as a trading range. What I have found over the years is that I am no good at puting time limits on movements. I guess I would like to think it will to around 6.5p before sept. Break through to 10p on sept results and then maybe the next update pushes it to 17p so what, 6-9 months to 17p?
This will probably turn out to be a load of old pony, and no doubt many reading it here will of already come the that conclusion!
Having said all of the above, the patterns that the SP makes during the next few months may well change all of my current thinking and new levels/expectations will appear more likely. Who knows?
" oodles of room for it to go beyond the recent high of 3.88." - why's RSI at 59.44 when we saw similar pattern at 87.88? Fascinating. Where u see this going and where is the support coming from?
I will just re-iterate, this is NOT a trading share. The spread is far too wide and the share pool available far too small.
I have used charts and indicator(s) simply to try to time my latest purchase at the most advantageous price.
Interesting! Well timed and predicted.
Your theory was proved correct, and within an hour of your post. Certainly of interest to me.
Agree Wyndrum it is of interest. I am quietly taking it in! similar with Lemming
Wyndrum. Not at all of limited interest. I have been following your rsi comments with great interest. Thanks!
I won't keep this thread going particularly as it is of limited interest but for instance when the SP was rising at 3p recently the RSI was 87.88 which was very over bought, it continued up further but then dropped back to 2.9p (Friday) with the RSI at 59.44.
So almost identical price but where earlier it was a red flag to more likely fall than go up, now, at the same price, there is oodles of room for it to go beyond the recent high of 3.88.
None of this is written in stone but this example is a good one of the RSI. To use me personally, I wanted to buy more but at 3p (buying price 3.2p) earlier but with the high RSI I was nervous. I then watched it go up to 3.88p (rats!), but in fact at that stage I was very confident it would fall back and by then the chart suggested I had a good chance to get back in around 3p. which I have done (in fact a little less and well below the 3.2p buying price I was initially considering), but now with the RSI on my side, so to speak. (It doesn't always work out so predictably and even now it could just carry on falling. Its just an odds game). DYOR
Just bought some more at 2.98p .
It will be interesting to see if the chart mentality prevails. (Its always a risker indicator than much bigger, traded stocks)
quick update: another fall so another unwinding, buts its quite pedestrian. RSI now, based on last nights close, 69.75.
The chart (ignoring the RSI for the moment), indicates that when the SP is between 2.88-3p there will new buyers and the SP should move up (or at least stop falling).
Obviously as (or if) the SP falls a bit further so the RSI will fall and as a result leaves plenty of room for the SP to rise without scaring off potential buyers who look at this sort of thing.
As there is no news for several weeks my forecast is a bottom of 2.88-3p with rises and falls between that and 3.88p (last high). I think it will take new news to propel us to new heights beyond 3.88p (imo dyor).
Hi Wyndrum- thanks for your post. I value your analysis, very insightful :)
In case anyone is interested on the weekly/daily chart which is more sensitive to the ups and downs of a SP, currently the RSI indicator is approaching over sold territory at 37 (its was off still because it should be sub 20 that will get a lot of attention and suggest its oversold and therefore represents very good buying opportunity.) However the caveat to this is that you tend to look for reversal patterns at sub 20, ie a share has been in a downward trend and perhaps had gone too far. In this (EVE's) case, we are looking at a retrace so anything sub 40 starts to look attractive as a price to buy in.
The further caveat, is that I think the weekly/daily chart at 15 min updates, is too sensitive for any sort of chart signal and the longer view charts that work on daily closes are more helpful.
On that basis after yesterdays fall, the RSI is 76, so if this further fall holds today then its going to look more attractive to more potential buyers.
I know it hurts but this is he most likely way I have found to forecast further moves (but its just my opinion. DYOR as always