Far East Energy Corporation (OTC:FEEC) has been going down in the last couple of sessions confirming the negative divergence between the price graph and the Force Index indicator.
The stock made a significant jump in January. The share price in this period rose from $0.1 to $0.33. It consolidated for a while around the $0.3 mark until last week it plunged down to $0.28.
On the last trading session, however, FEEC rallied back to $0.31 per share, apparently due to the issued press release announcing the company’s participation in the 2012 Oil and Gas Conference, hosted by EnerCom Inc.
From a technical point of view, while the share price of FEEC stock was soaring in January, the 13-day Force Index was declining giving an important technical signal known as negative divergence.
Although the MACD indicator had been supporting the stock in its climb, at the beginning of February it also turned negative.
Once the 13-EMA turned negative FEEC plunged down below the short-term support at $0.32.
However, FEEC stock has been consistently supported by corporate updates and if the company keeps this practice, the negative technical set up may as well be parried.
