RMD - ResMed Inc

Commentary:
This week we've chosen to take a look at the weekly chart of RMD because it has broken below a long-term trendline. As you can see from the chart below, the ascending trendline has been able to prop up RMD's price several times over the past two years, but the bears managed to push the latest weekly bar below the support. The recent move below the $44 support level suggests that the long-term trend is shifting downward.

We've also added the directional momentum indicators +DI (green) and -DI (red) to confirm our expected move lower. These two indicators are used by traders to predict major shifts in trend. Notice how the trend is up while the +DI is above the -DI. Traders use a crossover between these two indicators to signal the beginning of a new trend. It is interesting to see how the crossover in November 2004 signaled the beginning of the uptrend, but it is even more intriguing to see how the -DI has just recently crossed above the +DI. This type of crossover could be used to suggest the beginning of a longer-term downtrend.