ABK Watch

Ambac Financial Group Inc. (ABK), the insurer of financial products that was a major casualty of the 2007/2008 collapse, is trading up today for a second day in a row. But don't break out the celebratory fireworks yet.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
ABK $0.90

Here is why I don't see a happy face hovering on today's ABK chart.

Today's high, although above Monday's close, is a lower high. That is, it is below Monday's high. This is not an uptrend.

Monday's volume was up, and today's with fewer than two hours to go before the close is showing no signs of a spike. However, volume both days remains below the very near term peak of 90.4 million shares on June 9, and the high before that, 93.5 million shares on May 3. Those volume levels need to be exceeded to demonstrate growing interest in this penny stock.

The price remains below the 20-day simple moving average, and in fact has retreated on a close approach to the ma20 two days running.

Two major signals -- the parabolic sar and Person's Proprietary Signal -- remain in bear phase, as does the macd, although it is trending upward.

On the other hand, the fast stochastic is rising through the neutral zone, and the next-highest Fibonacci retracement level, 78.6% at $1.13, is more than 25% above the present level, a fairly profitable rise.

Reversal Levels

• $1.13, +25.6% (Fib level)
• $0.99, +10.0% (20-day ma)
• $0.90 <== You are here.
• $0.62, -31.1%

ABK peaked at $96.10 in May 2007, and then collapsed until reaching a low of 35¢ in March 2009. The highest price attained since that low is $3.39 in April of this year.

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Disclaimer

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.

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.