I began this week taking a position in KAZ, and I wanted to revisit it with a technical indicator that I've been using with good success. Here's an annotated, daily chart:
(Click to make larger)
One of the most helpful technical overlays for me is using the % Bollinger Bands. I found KAZ by doing a search for narrowing Bollinger Bands. On the chart above, the indicator is behind the price, though you could have it separate. My preference is to set it behind the price but make it translucent so that it does not distract. The scale on the left is for the Bollinger Band %.
Extreme readings are unsustainable. As you can see, each time the reading peaked, the stock pulled in. Today KAZ had a most extreme reading at 1.34. I've noted the peaks with circles and showed the subsequent price action. Buying when the volatility is so high generally translates into your not receiving an advantageous price. (I noted my purchase price at $1.07 on the chart). Times of high volatility are an advantageous place to sell.
I did not sell into this volatility explosion--but I was sorely tempted. My position is rather small. If I had more shares, I would have sold into this. My expectation, as documented by the arrows above, is that KAZ will pull in. Notice, too, that it stopped at $1.30, and that was a previous place of resistance with much higher volume.
Let's see what happens to KAZ next week. It might just be an incendiary move that pops and then fizzles. The setup presented a very nice opportunity for a short term trade. The chart has some long term promise as well.