Can AAOI continue a 400% trend up ?
AAOI has trended up more than 450% since May 23th. The big question is can it continue?
The factors include:
1 Volume - volume is what causes price action. Here rising volumes above the running mean
suggest that there is plenty of volume support for price action.
2. Anchored VWAP analysis is that after a pullback in VWAP levels in mid June price has been
rising and crossing VWAP levels above it. This is essentially a VWAP breakout. Price is increasingly
overbought and overvalued and perhaps due for another correction.
3. RSI of both the lower and high time frames crossed 80 more than a week ago. Thus far
RSI is stable without any sign of falling into bearish divergence.
4. The MACD lines are parallel and well above the histogram. They are at about the 9 level.
Price reversed on June 20th into the pullback. This is when the lines were at 11.7. This reasonably suggests another pullback or correction when they rise again to 11.7
Given the above, I conclude that AAOI has upside room until divergence is seen or trading volumes change to net selling volume or price outright pivots down from a high.
Accordingly, I will take a long trade expecting to capture the end of this massive trend up.
The factors include:
1 Volume - volume is what causes price action. Here rising volumes above the running mean
suggest that there is plenty of volume support for price action.
2. Anchored VWAP analysis is that after a pullback in VWAP levels in mid June price has been
rising and crossing VWAP levels above it. This is essentially a VWAP breakout. Price is increasingly
overbought and overvalued and perhaps due for another correction.
3. RSI of both the lower and high time frames crossed 80 more than a week ago. Thus far
RSI is stable without any sign of falling into bearish divergence.
4. The MACD lines are parallel and well above the histogram. They are at about the 9 level.
Price reversed on June 20th into the pullback. This is when the lines were at 11.7. This reasonably suggests another pullback or correction when they rise again to 11.7
Given the above, I conclude that AAOI has upside room until divergence is seen or trading volumes change to net selling volume or price outright pivots down from a high.
Accordingly, I will take a long trade expecting to capture the end of this massive trend up.
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