About a month later... and the daily charts show NOK now tracking lower on the lower bolly... having broken through support around $3.80. The bollies widening out with price tracking down along the lower bolly pretty well kills the hope it might trade sideways like it did in Sept to November last year.
Another month and we should see it setting up for testing $3 again, and with the 50 MA rolling over pointing lower... making the test one of whether or not the "death cross" will happen, or not...
There is the beginnings of a positive pinch forming on the daily charts, now, suggesting resistance and the possibility of a nice (and trade-able) pinch chart forming in the next few weeks as it drifts lower... but, the weekly chart doesn't confirm that, showing, instead, a strong correlation between ADX and MACD with both rolling over and pointing lower... only with MACD looking like its lagging the ADX trend a little, even as MACD rolled over and crossed the indicator line this week to confirm the downturn... That suggests the weekly chart may be forming a bit of a negative pinch pattern... which, on this chart, should mean you expect to see a contested chart and prolongation of the decline rather than an acceleration... but, still too early to make that call, and the MACD could well diverge at a faster pace in the next two or three weeks, as it did coming out of the MACD rollovers in Feb and May of 2011, and April of 2012...
NOK has been in a three year long decline...
The move above the middle bands on the weekly charts in November appears to have slowed the rate of decline, in the same way the similar move did that in June of 2010 to January of 2011... while moving off the lower bolly limit to test the limits of the upper bolly before continuing lower...
Biggest questions the charts leave open... are the timing...
An accelerated pattern might see a far more rapid decline occurring (as has occurred here previously in similar chart situations) probably with the trading in the next two or three weeks providing the key in what you should expect to see happening next. And, then, with a more accelerated chart developing, you'd also expect to see that pattern be paired with another more dynamic pattern coming out of a test of the bottom.
An less accelerated pattern in trading over the next few weeks... might presage the development of a longer, grinding, decline... paired with a less dynamic pattern in recovery...
And, of course, even considering the element of inertia in the trade, nothing in the charts should be expected to trump the longer term fundamental considerations, rather than integrate sentiment with them...
Don't ignore the 6 year monthly chart... which shows Jan 2009 to Apr 2010 being a decent proxy for Apr 2012 to present...
Compare Williams % R to the other metrics in each of the chart periods... ?
I don't see much evidence in charts that NOK can avoid a move lower now, or avoid a test of prior lows...
I also don't see much suggesting it will violate the prior lows rather than test them... while the charts now say NOK is still way closer to its bounce lower off an interim peak, now, than it is close to making a bottom...
Given the current chart dynamic, I think the support at $3 likely will not hold... but, can't call a range for the bottom yet, without seeing what happens over the next month... |
