Attached are weekly bar charts of Ridley Corporation and PMP Communications. Both of these charts look interesting as they both seem to be coming out of long term downwards movements. Can you see marked on both charts with arrows the key indicators which showed you that there was a possible change of trend.

First Ridley:
This chart is littered with indicators of a change in trend. There was a spike bottom at 48 cents with volume (shown by the arrow). This was perhaps telling us that final selling was taking place. The RSI Indicator showed a higher bottom, shown by the second arrow around late April. The weekly chart tracked sideways during this time so a positive divergence was unfolding here. Additionally the RSI also fell into the oversold zone, marked by the horizontal blue line. Third, the chart gave us a higher bottom around mid June, confirming that a change in trend was under way. Finally, the chart broke the downwards resistance line in early July giving us final confirmation of a change in trend.

PMP Communications is not as certain however a couple of things to note. First the RSI. You can see it formed a higher bottom around April where the red arrow is. Secondly is the way the moving averages have formed (nearly a crossing now). This stock is one to be watched for the formation of a higher bottom. On fundamentals P/E Ratio 9.7, Div Yield 9.95.

Although we don't use indicators such as the RSI a lot, it can be useful for longer term trend changes. RSI stands for Relative Strength Index, it is a plot of the relative strength of the last closing price as compared to the previous closing prices. The RSI used here is a 21 day however you can use whatever term you see fit for the stock you are trading. Divergence occurs when the RSI is trending up whilst the stock is either trending sideways or trending down. Or the opposite where the RSI is trending down and the stock is trending up or sideways.