A couple of weeks ago, Coates International Ltd (OTC:COTE) reached a new 52-week high after a month of steady, determined climbing. However, ever since this moment the stock stock has been going down.
The company surged a little bit after the announcement made on Tuesday, but the next day a correction took place and wiped out the achieved gain. Anyway, the stock stopped right at the support line and after this movement the naked eye can discern a forming downward triangle, which is a bearish sign. The bearish mood became even more accentuated after the stock was unable to go higher on the released news.
On Tuesday, a press release revealed that COTE opened a $10 million equity line of credit at Dutches Opportunity Fund. In exchange, Dutchess will have the opportunity to purchase shares of the company’s common stock.
After the news the volume started to build up. Yesterday for example, the number of traded shares was higher than usual at 300 thousand. For comparison, the 90-day average is at 236 thousand shares.
The ADX indicator shows that COTE is about to exit the trending period. At the same time, the MACD indicator is still in a bearish formation. If the stock continues to fall, investors will have to pay attention to the long-term moving averages. The 50-MA is currently at $0.33, while the 200-MA is at $0.25.
On the whole, the company will have to make more effort to parry the negative influence of the technical signals. Otherwise, it is not very certain if the downtrend will stop soon.
