How do you assess penetrations of the bands? I'm new to BB's but people seem to have different opinions on how to use them.
Have a look at www.charthelp.com Theres a nice 3 page article on bb. That guy is saying the price tends to follow the band after a penetration.
Cigar......... Have checked out the site referred to and I can only agree with what is said about BB's.
If you look at the chart of Proteome for the period 9/11 - 15/11 It traded consistently above the upper BB, confirming the normally accepted indication of a trend.
However if you look at the current period, 19/12, when it prenetrated the upper BB it immediately fell back and didnt penetrate again until the 27/12 to fall back yet again. Whilst the price has risen during the period, if you check out the daily movement of the price there is sufficient pressure showing weakness to make me doubtful this is the time to dive in. Furthermore other indicators showing it to be O/B hence my opinion that whilst this share may well have potential, I prefer to look for other opportunities at this particular time.
BUT REMEMBER THIS IS JUST ANOTHER INDICATOR NOT A HOLY GRAIL, AND NO ONE INDICATOR SHOULD BE RELIED UPON IN ISOLATION.
The way I see PRM on chats is that with regard to upper BB penetration (compared to previous penetrations John mentions) and positive press comments the price has further upwards space to go..MAcd Histogram also suggests further upward price movement..only with OBV being at the top it is unlikely that this upward movement will sustain..I therefore think the price will carry on upwards (around 10p most likely) with a reversal being imminent..
I'd consider getting in PRM after a possible reversal not just now...
[This message has been edited by rizgar (edited 01-01-2001).]