This chart highlights the importance of the GoNoGo Oscillator’s interaction with the zero line.
As we know, in a strong trend, momentum will cool off during corrections/consolidations. However, we do not expect momentum to become negative unless there is an underlying problem with the price movement.
This is the daily chart of Zoom which has enjoyed a great rally during the past few months as people flock to its video conferencing software. After each new high, there has been a pull back, indicated in the GoNoGo Trend indicator’s paler blue color and reflected in the GoNoGo Oscillator’s drop to zero each time. Red GoNoGo counter trend correction arrows signal that these pullbacks are likely.
Now, we have seen a sharp 3 day pull back from another new high pinpointed by the latest counter trend arrow (circled), and the GoNoGo Oscillator is at zero.
We will look for zero to hold as support. If it does, expect price to rally again. On the other hand, if the GoNoGo Oscillator fails at zero and turns negative, price will likely fall further and the “Go” trend maybe in trouble. Click here ...