Hey Doc,
I have noticed many people are in SAPX right now (Currently I am not), and I thought I would run a "noobie" chart analysis on it and see if I can read that chart like you do. Please feel free to correct me as I am sure there are many mistakes, and I need to learn! I made the chart style similar to yours, though I used a different background color so people do not mix up this chart with one of yours.
Here it is:
Positives:Support:
.30 - PAR SAR
.36-.37 - I think this is very strong support here. First off because of the rising support trendline due to higher lows. Secondly, because of the support/resistance line. Thirdly, because of the MA50.
It looks to me as though support will be rising due to the higher lows being made.
Also, it looks as though an ascending triangle could be in the makings. On the 21st it broke through the top of the triangle (which ruined the formation), but it may have just been a false break.
The RSI is rising over time, and is about to enter the MOMO zone (50). It has been going in and out a couple of times, but it has always been making higher lows.
The MACD is about to break the zero mark, which is a sign the the short term (12 day EMA) trend is rising about the longer term (26 day EMA) trend. Also, if you look at the bottoms made on in the beginning of October as well as on Nov 17th they are very close. HOWEVER, the MACD is rising. Yet another sign of the bullishness to come. The MACD is also rising above the signal line.
Volume: I think I am understanding how to read the volume, though I would like it if you verify this!
It looks to me like many buyers got in on the 18th - 21st (its hard to see the exact day on the chart). On the 22nd, the stock dropped, and you can see that many people (sellers) got out of the stock. On the 22nd and 23rd, the stock continued to drop as more people wanted out of the stock, though the volume on these days was very low. This indicates that there is not much mutual agreement (for lack of a better term), to get out of the stock. Because of this the stock has entered an accumulation phase. There are a greater number of people in the stock who expect it to go up. The last bullish day (29th) shows an increase in volume as well as a rise in the stock price. If you compare that to the previous days, you can see that there is still more bullish sentiment than bearish. On the 29th, the stock dropped slightly. There is less volume on the 29th for the drop than there was on the 28th rise. Once again, this proves the bullish sentiment within the stock.
So, overall this are more people in the stock who expect it to go up, then there are people who expect it to go down.
Lastly, the ADX signal line is in a slight uptrend (and it broke the 20 line), indicating that a trend may be starting. By looking at the chart you can see that an uptrend is forming. +DI is above -DI indicating more bullish movement. The +DI is pointing down, but I believe it will turn back around tomorrow (the 30th), as the stock is at a strong resistance point and should move up. The Green line is also above the signal line which would normally indicate a very strong uptrend, but since we are not in a trending market I do not believe this indicates much.
Negatives:Resistance: Just by drawing trendlines I see resistance at .49, .68, and .89. I think the stock will break the .49 resistance as it is making higher lows and in the accumulation phase.
The +DI is pointing down, but I think it will turn around tomorrow. The -DI is also pointing down, so that is actually a positive.
The RSI has broken back down over the 50 mark, indicating slight bearish sentiment. I think it will turn back tomorrow to the upside.
On a side note, the last candle makes a dark cloud cover formation. I would not be too worried about this since we are not in much of an uptrend yet.
I think with a good amount of volume, the .49 resistance can be broken quite easily. I think it will break it within a week or so (due to the higher lows as support).
Wow I did not realize I was going to write this much! I know it is a long read, but if you could go over it and tell me any mistakes you see that would be great! Also, if there is anything I missed on the chart feel free to mention it to me! I had a limit order to get in this stock today at .37 but was unable to =(. I may get in tomorrow morning, though I am not sure as I have class in the mornings and may not be able to get in at a low point of my liking.