Figure 3: MFI Support

As shown in Figure 3, the uptrend for Capitaland which started in early August was well supported by the MFI. Every pull back in price was supported by this MFI support. It must be observed that during this trend, MFI did not record a single oversold reading. We know that in a healthy uptrend, price retracement is only good for the overall trend. Hence in trending period, whenever the price pulls back and the MFI reaches the support level, investors have a high probability entry signal.