Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2009 by Patrick Mikula All Rights Reserved
In this article we will discuss a specific ADX pattern that can be used to help locate market bottoms. The chart below is a daily bar chart for the stock Autodesk Inc., symbol ADSK. The ADX pattern we are looking for involves two characteristics. First the ADX line is above the Trend Level. The higher the ADX is above the Trend Level the better.
Second, the DI- line must be above the DI+ line. The higher the DI- line the better, and we would like to see the DI- line above the Trend Level. When the ADX line starts to make a top with this setup. it indicates the stock price is making a bottom.
We see this setup on the chart below at the market bottom labeled “A” . The ADX is high above the Trend Level, and the DI- line is above the DI+ line and also above the Trend Level. At this point the ASAK stock made a bottom.
ADX and Autodesk Inc.
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