Nokia (NOK) has seen some "wild" price action in recent days, perhaps influenced by chat rooms and blogs. Let's check out the charts and indicators to see if this is a "random" event or foreshadowing of something else.
In this daily Japanese candlestick chart of NOK, below, we can see that prices had a quiet existence until a few days ago. NOK exploded sharply higher and trading volume surged to many times the typical daily turnover. Gains above $6.50 were rejected - notice the large upper shadow. Prices have continued to retreat and have nearly filled the entire price gap (or window).
In this weekly chart we can see that prices broke above a year-plus trading range when they broke above $5. Trading volume ballooned but interestingly the slope of the 40-week moving was positive before the price surge.
The OBV line was already in an uptrend. The MACD oscillator is crossing above the zero line for a buy signal.
In this Point and Figure chart of NOK, below, we used weekly price data. A trade at $10 will refresh the uptrend but that may take a while. NOK needs to "rebase".
Bottom line strategy: Readers of Real Money should resist the calls from traders talking their positions. Do the research and enter trades that make sense. End of story.
(Nokia is a holding in TheStreet's Stocks Under $10 portfolio. Click here to learn more about this portfolio, trading ideas and market commentary product.)
