A Ray Of Sunlight Shines On Black Box(BBOX)

Posted by barkand on June 30, 2011 under Bollinger bands | Be the First to Comment

Black Box (BBOX) has been in a downtrend since last winter, but the long slide may be over.

After reaching a high at $40 last winter, the shares dropped to $34 and moved sideways for a couple months. The second leg down began in April and the price eventually fell below $30. Throughout that second downturn, prices skidded along the lower Bollinger band. Except for two days in May, the price has been below its 20-day moving average since mid-April. And even on those two days, the long upper shadows show us that prices were hammered back down. The location of prices within the bands, %b, is plotted below the price chart.

But more recently prices made a low without reaching that lower band – a sign that selling pressure is easing. BBOX is now sitting just under the 20-day moving average. We are cautiously optimistic now and a couple healthy closes above that moving average would give us cause to become more bullish.