Aerodata 28/1/00 (and the RSI)

Aerodata 28/1/00 (and the RSI)

A change of market sentiment may be in process for ADH. Heavily sold down after the recession in Asia, where much of the company's sales originated, and also from lack of demand in the mining sector apparently. (Aerial survey work)

The Relative Strength Index (RSI) has also given us a divergence. The RSI was developed by J Welles Wilder. Values above 70 indicate overbought, values below 30 indicate oversold conditions. It is a momentum indicator, so what becomes important is identifying a divergence against actual price.

Price here has been making new lows, but the RSI started making higher bottoms, indicating reduced selling pressure on the downside, ie the momentum had gone out of the down move. (Exercise care though; it doesn't always work, I find. Price direction is more important.)

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