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Mountain High’s chart looks like it has created a mountain a while back and has since then been coming down off of it’s high. It is natural for us to wonder when this stock will turn around again and head back to the mountains. Thankfully we can get some assistance from our technical indicators to help us understand what is going on. I would like to introduce to you the ADX. The ADX tells us if the stock is trending or not. People can use this differently and there are advanced versions of the ADX, but for this introduction I will keep it simple and provide general usage of this tool. If the ADX is below 20, then it is simply in a trading range. When the ADX is between 20 and 30 it can be considered ambiguous. However depending on which direction it is moving you can draw some conclusions. Once the ADX rises above 30, we have a defined trend in place. Note that this trend can be either bullish or bearish. The simple ADX line does not account for the direction of the trend, but glancing at this chart I think we can see the current direction it is heading right now.
The ADX by itself is not enough to make decisions alone. You should look to pair it with other indicators as well. For example, if we look at the RSI (which we discussed last issue) we can see that it is below 30 implying that it is oversold. Given the current lows displayed on chart, I would be watching this one like a hawk for it to cool off and present an accumulation period or perhaps signs of a change in direction back up the mountain. That is to say, watch for the ADX to dip back below 30 and and the RSI to rise above 30. Happy hiking.
Mountain High Acquisitions Corp. (OTC: MYHI)