These scenarios are then used to trade price reversals. The permissible values for RMI lie in the range between 0 and 100. A value of 50-75 would signify a very strong trend, and a value of 75-100 would point to an extremely strong trend. When the RSI line moves up, the stock may be experiencing strength. On the other hand, a reading of -100 would indicate that the stock is oversold. Presently, the stock has a 14-day RSI of 55.49, the 7-day is sitting at 56.04, and the 3-day is resting at 58.22. Having a sound plan before investing can help ease the burden of knowing that markets can sometimes do insane things without any rhyme or reason. Investors may be watching other technical indicators such as the Williams Percent Range or Williams %R. The CCI was created to typically stay within the reading of -100 to +100. On the flip side, a shorter MA like the 50-day may help with identifying shorter term trading signals. A longer average like the 200-day may serve as a smoothing tool when striving to evaluate longer term trends. Lastly, when the price is above the cloud, then the top of the cloud will act as a general support level, and when price is below, the cloud base will act as resistance.
The Average Directional Index or ADX is technical analysis indicator used to describe if a market is trending or not trending. The RSI may be useful for spotting abnormal price activity and volatility. The indicator is computed by using the average losses and gains of a stock over a certain time period. It is a good idea to use it in conjunction with additional indicators that can help determine the trend's strength. Currently, the 14-day ADX for Ultrashort MSCI Emrg Mkts Proshares (EEV) is 23.3. Many technical chart analysts believe that an ADX value over 25 would suggest a strong trend.
Oversold values are 0 to 20 and investors might look to buy dips in up trends when the signal line crosses up from below 20 to above 20. This is a momentum indicator that is the inverse of the Fast Stochastic Oscillator.
At the time of writing, the 14-day ADX for US Medical Devices Ishares ETF (IHI) is 10.3. The 14 day Williams %R for Ultrashort MSCI Emrg Mkts Proshares (EEV) is noted at -30.34. An RSI reading over 70 would be considered overbought, and a reading under 30 would indicate oversold conditions.