ABK Watch

The bond-insurer Ambac Financial Group Inc. (ABK) is showing bull phase on the macd after a bearish run on the signal that lasted 24 days.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
ABK $1.20

At 3:05 p.m. Eastern

The price today opened 5.8% above the 20-day simple moving average -- often a significant resistance point in trading. A break above the ma is a bullish signal.

However, ABK took it all back and declined intra-day back to the moving average, and sometimes below it.

ABK is trading just above the 78.8% Fibonacci retracement level. The Fibonacci trellis maps retracement of the rise from 51¢ on March 29 to $3.39 on April 12. Fib levels often provide significant support and resistance.

Reversal Levels

• $1.34, +11.7%
• $ <== You are here. (ma20)


• $1.13, -5.8% (Fib level)

ABK is one of the walking wounded from the collapse of capitalist finance in 2007/08. It traded at $96.10 on May 18, 2007. Now it's a penny stock. So it could be a very long term buy and hold play for the optimist, who might not realize a fortune for the next five or 10 years. Or never. As a short-term play, like all penny stocks it has a built-in volatility, because the minimum move of 1¢ is nearly 1% of the price. For the short hault, it's a reasonable play to the bull side.

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Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.