Trend: Downtrend, 20ma down, MacD below 0

Support: 0.615, 0.58

Resistance: 0.64 (20ma), 0.665 (50 & 100ma)

Observations
Candlestick – Bullish Harami.
Histogram – Mixed. Bullish Divergence.
RSI – Around 40%. Bullish Divergence.
Stochastic – Bearish Crossover.
Bollinger Band – Closer to lower band. Squeezing.

Conclusion:
Ezion had been badly beaten down as it failed to breach the 200ma resistance level. Recently, the magnitude of drop seems to be slowing down. Will this be a possible reversal point for Ezion?
The trend of Ezion remains downtrend as it struggled to rebound towards 20ma. But it is interesting to take note that bullish divergence starts to appear in the indicators as it is trending downwards. There might be a possibility that the downtrend might end soon. Based on current price, it is trading at 0.615 support level where it had consolidated for the past few days. On top of that, it had a bullish harami formation yesterday which might confirm the support level.
If the bullish harami is to be confirmed, it might face upside resistance of 0.64 level which confluences with 20ma line. If the bullish divergence is in effect, this resistance of 0.64 should break and could see price testing next resistance of 0.665 where a stronger resistance might be formed. But if bullish divergence failed, Ezion might break 0.615 support and might head towards 0.58 for the next support level.
In conclusion, Ezion’s downtrend might have ended if Ezion is to break 0.64 resistance and further confirmation will be when it test 0.665 resistance level. But if the bullish divergence fails to reverse the trend, Ezion might have a risk to head towards 0.58 as support and the downtrend could continue.

What to watch out for this week:
1) Confirmation of bullish harami.
2) Breaking of 0.64 resistance
3) Breaking of 0.615 support

Trading strategy to adapt right now:
- Long when there is confirmation of bullish harami (Counter trend trade and not very good risk and reward)
- Wait for a formation of higher low after 0.665 resistance is being tested.

*Disclaimer applies

The psychology behind trading stocks is the force that moves the stock market. A stock chart is nothing more than a picture of human emotions. Painted on the canvas are the emotions of greed, fear, hope, and euphoria. As a disciplined trader, you capitalize on the psychological demons that plague other traders.

Swing Traders Psychology
- Should I buy?
- Should I sell?
- Should I take profits?
- Should I cut loss?

These are some of the questions that destroy trading accounts because the novice traders asking these questions do not have a plan. If you asked a professional trader one of these questions he or she would say, “I don’t know. What does your plan tell you to do.”

So what ends up happening? They get excited and buy at the worst possible time. Then the stock reverses. Fear creeps in and then the stock goes lower… and lower… and lower. Finally the pain becomes too much to bear so they sell taking a huge loss.

Believe it! Now lets look at the psychology behind what happens when a stock does go in the desired direction:

Excitement! Euphoria! Yeah, I’m making money! “I had better sell to lock in these profits since I have had several losing trades in a row.” The trader then ends up selling too soon!

By now I’m sure that you have heard the saying, “Keep you losses small and let your winners run”. Look at what just happened in the above example. The un-disciplined trader has just done the opposite! They have let their losses get big and they have limited their winners!

All of this mental anguish can be eliminated by having a decent trading strategy and the mental discipline to stick with it. Write down a plan for the trade before you trade the stock. Then trade it according to the plan that YOU have written. Remember that you have devised a plan before you got into the trade when your emotions were stable. Now you can trade your plan with confidence.

For most novice traders, it is not their strategy that is causing them to lose money. It is themselves that is their biggest enemy.