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Plexus Holdings PLC (LSE:POS) provides engineering methods and services for the oil & gas sector. This company stock is characterized by many gaps (gaps-up and gaps-down), extremely serious equilibrium market zones and significant movements; whereas a gap is a break in price. Gaps on this market reflect the proverbial imbalance in supply and demand on the shares of the company. When there is a gap up, it means the bulls are winning, and when there is a gap down, it means the bears are victorious.
Technical Forecast: This Is a Bull Market
In case of the Plexus Holding stock (LSE:POS), we need to understand that a gap up is indeed representative of copious purchases, and a gap down is representative of excessive selling pressure. When the imbalances are highly conspicuous, these colossal zones are made as the price merely jumps down or jumps up, though there are periods of trendless activity when traders are very much inactive. Like a blockage in a blood vessel or a disruption in a pipe in which some liquid passes, the price might be unable to move smoothly until the strange imbalance is thwarted. Please look at the Plexus Holding chart, you would see the truth of the foregoing.
From January to April, 2012, the stock made significant bullish movement. No doubt, investors would be glad to realize some decent returns on their investment. The price topped at 131.5 on May 4, 2012 and began to plummet – going southward until June 15. That was incursion of the market into a bearish mode, as the price was weltered in bearish pressure. Further southward movement was rejected on June 15, 2012; at a low of 101. As the price started to essay to the upside.
You can see the Average Directional Movement Index (ADX) period 14 and the Moving Average Divergence Convergence (MACD) on the POS chart. Technically, what we have now is a bullish Confirmation Pattern. The ADX line is winding its way up to the level of 60, which means that the trend is significant, while the signal line of the MACD has crossed the zero line to the upside, remaining positive. This underpins the northward rally that is currently the primary trend. This does not mean that the price cannot go on a short-term sale in the context of an uptrend (we still cannot predict a pullback in price prior to the time it takes place). Prices do not go in straight lines, and it is known that counter-trend moves could be deleterious to traders’ interests.
Nonetheless, this would give unique opportunities for some traders to enter the market at better prices. This stock is trading at 123 at the time of writing this article. Sellers are laying ambuscade at the levels at 124.00 and 124.50, and the price is being supported at 122.50 and 122.00. This is a bull market and the value of its shares would increase if this scenario continues. Great return on investments would first start as negligible returns.
Conclusion: When trading, it is better to be objective rather than subjective. Albeit, the recent bear market on the Plexus Holding could have been painful to permabulls, it is better to be sure to carry out trading plans based on statistically significant sample of events, and not one painful experience. I would like to end this article with a quote from one of the greatest legendary stock market geniuses that have ever lived on this planet:
“There is only one side to the… market; and it is not the bull side or the bear side, but the right side.” – Jesse Livermore
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