Get started

Stochastic Oscillator

Overbought Johnson & Johnson (JNJ) Set To Drop 4%Johnson & Johnson has been in a bullish trend since 2009. On a few occasions through this trend, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have also conducted further analysis based on other historical information and readings that confirm a pending drop for Johnson & Johnson which are laid out below. When we look at technical indicators, the relative strength index (RSI) is at 86.2704. RSI tends to determine trends, momentum, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is well overbought and it one of its highest levels ever recorded for this stock. The positive vortex indicator (VI) is at 1.3091 and the negative is at 0.5914. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The positive value is relatively high and is beginning to slow its upward movement. This slowing momentum is an additional signal the stock should turn downward soon. The stochastic oscillator K value is 93.2126 and D value is 92.3311. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is very overbought. It cannot sit at this level much longer. Once the K value crosses below the D, the stock should begin to drop. SPECIFIC ANALYSIS I have created an algorithm (called SAG gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria which culminates in an oversold or overbought alert. That signal will occur within the next few days once the stock sees two days of consecutive drops. Because this signal will go off after continued drops, now is the best time to enter a position and take greater advantage of the pending downward movement. Upon back-testing this indicator, it has signaled overbought status 139 times dating back to 1970. Eighty percent of the time the stock drops at least 1% over the following 30 trading days after the indicator date. Seventy percent of the time, the stock drops 2% and fifty percent of the time drops 4%. In the history of this stock, it always drops a minimum of 4.52% when the positive VI is at or above its current level at the same time the RSI is at or above its current level. This additional study requires the stochastic to be overbought as it is today too. Since this current bull began in 2008-2009, the RSI has never reached it current level. I do not like only having one data point to base projections from, however, multiple signals are at play and support a drop from the stock's current level. The stock is also at its long-term (since 2009) resistance line. The stock has broken above this line twice before. Both times the high of the day broke above this line, while the stock always closed below it. The exact same thing has occurred today. The median drop on those occasions was 9.83% and it occurs over an average of the following 17 trading days. The SAG, record-high RSI reading, and flirtation with the long-term resistance line all point to downward movement for JNJ. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 5% over the next 31 trading days if not sooner.
NYSE:JNJShort
by StockSignaler
Marsh & McLennan (MMC) To Drop On Next Two Day PullbackMarsh & McLennan Companies has been in a bullish trend since 2009. It has been on a quicker and narrower bull trend since the beginning of 2016. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have laid out the reasons and levels to which the stock may drop while it most likely continues its long-term trend. When we look at technical indicators, the relative strength index (RSI) is at 81.3492. RSI tends to determine trends, momentum, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI well overbought. The positive vortex indicator (VI) is at 1.4006 and the negative is at 0.6499. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The positive value is at one of its highest levels ever. This always results in a pullback for the stock which should begin within days. The stochastic oscillator K value is 92.5655 and D value is 89.1630. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is very overbought. It cannot sit at this level much longer. Once the K value crosses below the D, the stock should begin to drop. SPECIFIC ANALYSIS I have created an algorithm (called SAG gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria which culminates in an oversold or overbought alert. That signal will occur within the next few days once the stock sees two days of consecutive drops. Because this signal will go off after continued drops, now is the best time to enter a position and take greater advantage of the pending downward movement. Upon back-testing this indicator, it has signaled overbought status 82 times dating back to 1987. Eighty percent of the time the stock drops at least 0.75% over the following 30 trading days after the indicator date. Seventy percent of the time, the stock drops 2% and fifty percent of the time drops 4%. In the history of this stock, it always drops a minimum of 2.55% when the positive VI is at or above its current level at the same time the RSI is at or above its current level. This additional study requires the stochastic to be overbought as it is today too. Eleven occurrences met this criteria and were studied. The median loss for the stock is 5.13% and the loss takes a median of 21 trading days to occur. The standard deviation for this first study is 2.42%. Five of these instances occurred at the same time the SAG gauge determined the stock to be overbought. The minimum loss for these instances is 3.12% and the median drop is 3.80%. The standard deviation for this second study is 1.48% The maximum movement for this stock could occur within the next 17-30 days. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 3% over the next 37 trading days if not sooner.
NYSE:MMC
by StockSignaler
Foot Locker Incorporated (FL) Always Rises When This HappensFoot Locker Incorporated has been in a bullishtrend since 2008. It has however, been moving downward since its most recent earnings call. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or lower levels, than they are now. These instances have resulted in nice short-term gains for the stock. I have laid out the reasons and levels to which the stock may gain while it most likely continues its long-term trend. When we look at technical indicators, the relative strength index (RSI) is at 19.7756. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI oversold. The positive vortex indicator (VI) is at 0.7989 and the negative is at 1.2480. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The negative value is high, meaning the stock has been moving down, and is continuing to do so. The momentum has begun to slow and the positive value is beginning to move upward. The stock should begin rising soon. The stochastic oscillator K value is 6.2597 and D value is 5.3371. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is very oversold. I cannot sit at this level much longer. Once the D value crosses above the K, the stock should begin to rise. SPECIFIC ANALYSIS I have created an algorithm (called the SAG gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria which culminates in an oversold or overbought alert. That signal will occur within the next few days. The one more day of gains should create the signal. Because this signal will go off after continued gains, now is the best time to enter a position and take greater advantage of the pending upward movement. Upon back-testing this indicator, it has signaled oversold status 72 times in the history of the stock. Eighty percent of the time the stock gains at least 2.50% over the following 30 trading days after the indicator date. Seventy percent of the time, the stock gains 5% and fifty percent of the time gains 11%. In the history of this stock, it always gains a minimum of 3.64% when the negative VI is at or above its current level at the same time the RSI is oversold at or below its current level. This additional study requires the stochastic to be oversold as it is today too. Thirteen similar occurrences were studied. The median gain for the stock is 10.57% and the gain takes a median of eight trading days to occur. Seven of these instances occurred at the same time the SAG gauge determined the stock to be oversold. The minimum gain for these instances is 9.38% and the median gain is 19.70%. All of these statistical gains happen fast so anticipating the stock to go up and up is not recommended. The maximum movement for this stock could occur within the next 15-25 days. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the upside. Based on historical movement compared to current levels and the SAG gauge, the stock could gain at least 5% over the next 35 trading days if not sooner.
NYSE:FLLong
by StockSignaler
1
Overbought Tesoro Corp (TSO) Heading Down Soon Tesoro Corporation has been in a relatively bullish trend since 2016. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have laid out the reasons and levels to which the stock may drop while it most likely continues its long-term trend. When we look at technical indicators, the relative strength index (RSI) is at 79.4823. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI extremely overbought. The RSI has not been at or above its current level since 2013, which resulted in a 8.96% loss over 7 trading days. The positive vortex indicator (VI) is at 1.2246 and the negative is at 0.7445. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The positive value is nearing very high levels. Typically this high results in a downtrend for the stock. The stochastic oscillator K value is 82.2446 and D value is 72.1417. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is almost fully overbought and it has been flirting with this level for a few weeks. An official downtrend should begin once the D crosses above the K value. SPECIFIC ANALYSIS I have created an algorithm (called SAG gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria which culminates in an oversold or overbought alert. That signal will likely occur over the next few days. The only thing holding this signal from going off now is continued gains in the stock. If the stock moves up for 1-2 more days and then reverses down, the signal should occur. With the stock being extremely overbought and the chance of this indicator going off, now is the best time to enter a position and take greater advantage of the pending movement. Upon back-testing this indicator, it has signaled overbought status 89 times in the history of the stock. The stock drops at least 0.50% over the following 30 trading days after the indicator date. Eighty percent of the time, the stock drops 3.25% and seventy percent of the time drops 4.75%. Since the last time the RSI was overbought at its current level, there have been four instances the RSI was overbought, and the positive VI was above its current level at the same time. The additional study requires the stochastic to be overbought as it is today. These instances have resulted in a minimum loss of 3.90% and median loss of 8.10%. All of these statistical losses happened over very short timeframes. Anticipating the stock to continue downward movement for more than 2-3 weeks is not recommended. The maximum movement for this stock could occur within the next 10-15 days. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could drop at least 3.25% over the next 33 trading days if not sooner.
TShort
by StockSignaler
Short-Term Cycle Down For Las Vegas Sands (LVS)Las Vegas Sands Corporation has been in a bullish trend since 2015 and a tighter bullish trend since the beginning of 2017. On multiple occasions through 2015 bull, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in short-term losses for the stock. I have laid out the reasons and levels to which the stock may drop while it most likely continues its long-term trend. When we look at technical indicators, the relative strength index (RSI) is at 71.5836. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI overbought and beginning to trend down. The positive vortex indicator (VI) is at 1.2795 and the negative is at 0.5811. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. Both values are at extreme levels. The stock should begin to make its descent. The stochastic oscillator K value is 94.4195 and D value is 84.1344. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is overbought, but the K value is yet to move below the D. The stock could see a few more days of upward movement, however, the drop on June 9 could be the beginning of complete downward movement. During the longer of the two bull trends, the stock drops at least 4% within 15 days. Everyone should be aware the movement in this case could be quick. Anticipation of further drops beyond 3-4% are risky. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels, the stock could drop at least 2% over the next 25 trading days if not sooner.
NYSE:LVS
by StockSignaler
Chicago Bridge & Iron (CBI) Could Be In For YUUGE GainsChicago Bridge & Iron Company has been in a long bearish trend since 2014. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or lower levels, than they are now. These instances have resulted in nice short-term gains for the stock. I have laid out the reasons and levels to which the stock may gain while it most likely continues its long-term trend. When we look at technical indicators, the relative strength index (RSI) is at 23.5869. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI oversold. The positive vortex indicator (VI) is at 0.6590 and the negative is at 1.2802. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The negative value is high, meaning the stock has been moving down, however, it is trending downward. This means the stock has ended its downward trend and should begin to move up soon. The stochastic oscillator K value is 11.3245 and D value is 11.1765. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is oversold. The D value is below the K and the stock is beginning to move up. SPECIFIC ANALYSIS I have created an algorithm (called SAG gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria which culminates in an oversold or overbought alert. That signal will occur over the next two days. The only thing holding this signal from going off now it continued gains in the stock. Because this signal will go off after continued gains, now is the best time to enter a position and take greater advantage of the pending upward movement. Upon back-testing this indicator, it has signaled oversold status 18 times in the history of the stock. The stock gains at least 0.20% over the following 30 trading days after the indicator date. Eighty percent of the time, the stock gains 3.50% and seventy percent of the time gains 7.25%. In the history of this stock, it always gains a minimum of 1.88% when the negative VI conducts a double cross above its current level at the same time the RSI is at or below its current level. The additional study requires the stochastic to be oversold as it is today. Six similar occurrences were studied. The median gain for the stock is 10.18% and the gain takes a median of 6 trading days to occur. Four of these six instances occurred at the same time the SAG gauge determined the stock to be oversold. The minimum gain for these instances is 6.81% and the median gain is 11.70%. All of these statistical gains happen fast so anticipating the stock to go up and up is not recommended. The maximum movement for this stock could occur within the next 10-15 days. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the SAG gauge, the stock could gain at least 7% over the next 31 trading days if not sooner.
C
by StockSignaler
Annaly Capital Management (NLY) Always Drops At Least 2% When ThAnnaly Capital Management has been in a long bearish trend since 2008. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or higher levels, than they are now. These instances have resulted in losses for the stock. I have laid out the reasons and levels to which the stock may drop while it most likely continues its long-term trend. When we look at technical indicators, the relative strength index (RSI) is at 23.2053. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI slightly below the overbought mark. The positive vortex indicator (VI) is at 1.3474 and the negative is at 0.6632. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The positive and negative values are currently at extreme levels and the stock always reverses course. The stochastic oscillator K value is 90.9492 and D value is 91.4786. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is currently overbought. The D value has just taken over the K value and the stock may begin to fall within two days. In the history of this stock, it always slips a minimum of 2.09% when the RSI and positive VI are at or above their current levels. In addition to similar or more extreme RSI and VI levels, the stochastic was overbought in all studied instances, which is also the present case. 19 similar occurrences were studied. The median drop for the stock is 5.09% and the drop takes a median of 12 trading days to occur. Considering the RSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the current position, the stock could drop at least 2.5% over the next 29 trading days if not sooner.
NYSE:NLY
by StockSignaler
Mastercard Always Drops When This HappensMastercard has been in a bull trend since 2013. On five occasions through this bull, three of the technical indicators discussed below are at the same or higher levels than they are now. I have laid out the reasons and levels to which the stock may dip while it most likely continues its overall bull trend. When we look at technical indicators, the relative strength index (RSI) is at 76.2216. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is oversold. The positive vortex indicator (VI) is at 1.3193 and the negative is at 0.5613. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The positive and negative values are currently at extreme levels which the stock always retreats. The stochastic oscillator K value is 95.5822 and D value is 96.0369. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is currently overbought. The D value just crossed above the K value meaning the stock is most likely beginning its descent. Since the current long-term bull began in 2013, there have been five times when the RSI and the positive VI were at or above their current close while the stochastic was also overbought. These occasions led to a drop in the stock. The median drop occurs over 10 trading days and results in a 5.97% loss. The minimum drop on these occasions was 3.19%. Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the current position, the fund could drop at least 3% over the next 25 trading days if not sooner.
NYSE:MAShort
by StockSignaler
MSFT Always Drops When This HappensMicrosoft has been in a bull trend since 2012. On six occasions through this bull, three of the technical indicators discussed below are at the same or higher levels than they are now. I have laid out the reasons and levels to which the stock may dip while it most likely continues its overall bull trend. When we take a look at technical indicators, the relative strength index (RSI) is at 75. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is oversold. The positive vortex indicator (VI) is at 1.2626 and the negative is at 0.7155. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The positive VI is currently at an extreme level to which it and the stock always retreats from. The stochastic oscillator K value is 90.1109 and D value is 87.9759. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is currently overbought, and the stock should decline in the next few days. Since the current long-term bull began, there have been six times when the RSI and positive VI were at or above their current close price while the stochastic was overbought. These occasions led to a drop in the stock. The median drop occurs over 8.5 trading days and results in a 4.34% loss. The minimum drop on these occasions is 3.58%. Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the current position, the fund could drop at least 3% over the next 28 trading days if not sooner.
NASDAQ:MSFT
by StockSignaler
Shorting the EURJPY with IchimokuOn the EUR/JPY Fibonacci: Price seemed to retrace a bit to 124.791 (0.618) but I'm not sure if it will hit it if so, that would be my ideal short entry. When I draw multiple Fibonacci from the recent swing high to multiple swing lows, there's an overlap at 124.784 which indicates a strong support. Elliot Waves: I see the 4th wave has formed but it doesn't seem to be a valid Elliot Wave since the 4th wave has entered the territory of the 1st wave. This confirms to me that there may not be much more of a retracement. I used M Pivots to try and predict the days range for Monday from 124.023 to 124.924. Abandon Trade: There seems to be a pretty strong resistance at Fib 0.618 but I would give it until 0.382 level before I consider abandoning this setup. Neutralize MACD: Because there was a recent big move, I would like to think that by the time the price opens a candle below the cloud the MACD will have neutralized. Summary: 1. Watch for a candle to form below the cloud or price to retrace back to 124.791 before placing entry. 2. Set my SL at about 10 pips below or at the 0.382 Fib level. 3. Set my TP at about 1.618 Fib Level. This would give at least a Risk/Reward Ratio of about 2.7 with about 54 pip gain.
Short
by voistmag
1
Long on EURUSD at 618 Fib RetracementHey, guys. So I'm trying hard to work on my chart reading skills. I would like to post a couple charts with my analysis and possibly get some input from this group. I'm pretty new to Elliot Waves and Fibonacci Retracements. Anyone willing to participate? I'm hoping we can learn from each other with this. On the EUR/USD Fibonacci: Price seems to be retracing. I will be watching 1.12533 (0.618) for a possible long entry. When I draw multiple Fibonacci from the recent swing high to multiple swing lows, there's an overlap at 1.12360 which indicates a strong support. Elliot Waves: I see the 3rd wave has formed and the price is retracing to create the 4th wave. I think the 4th wave will complete the previously mentioned 1.12533 (0.618). Looking to enter and ride the 5th wave from there. I used M Pivots to try and predict the days range for Monday from 1.12042 to 1.13190. Abandon Trade: If price drops below 1.12360 and a new candle is formed there, I will consider this a possible reversal instead of retracement and abandon this setup. Neutralize MACD: Because there was a recent big move, I would like to think that by the time the price hits 1.12533, the MACD will neutralize. Summary: 1. Watch for the price to hit 1.12533. 2. Enter when the candle that touches 1.12533 closes or set my buy order 5 pips above 1.12533. 3. Set my SL at about 10 pips below the 0.382 Fib level. 4. Set my TP at about 1.618 Fib Level. This would give at least a Risk/Reward Ratio of about 2.7 with about 77 pip gain.
Long
by voistmag
1
How much will overbought Consumer Non-Cyclical Sector Fall? XLPThe Consumer Non-Cyclical Sector SPDR Fund has been in a bull trend since the end of the financial crisis. An internal and stronger bull trend has taken shape since shortly after the US elections in November 2016. However, this fund is currently near its long-term resistance point which will most likely lead to one of two future moves. The fund could break above this long-term resistance and continue strong gains, or it could reverse course and at the very least return to its support established since the election. Below I have laid out the reasons and levels to which the fund may dip while it continues its overall bull trend. When we take a look at technical indicators, the relative strength index (RSI) is at 80.8116. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI is overbought. The fund could rise over the next few days or begin its descent now. I will provide further analysis below when this indicator aligns at maximums with two of the other technical indicators. The true strength index (TSI) is currently 21.5180. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The TSI is moving up. The positive vortex indicator (VI) is at 1.3859 and the negative is at 0.5248. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. These indicators are at extreme levels indicating a pending reversal of the fund is imminent. I will provide further analysis below when this indicator aligns at maximums with two of the other technical indicators. The stochastic oscillator K value is 97.0441 and D value is 94.0369. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is currently well overbought, but the D value has not overtaken the K value, meaning the fund could produce gains for one or two more days at the most before ultimately turning downward. I will provide further analysis below when this indicator aligns at maximums with two of the other technical indicators. On three occasions since September 2013, the RSI, positive VI, and stochastic have been at similarly extreme levels at the same time. All three occasions led to drops for the fund. In September 2013 the fund dropped 5.25% in 13 trading days. In October 2013 the fund lost 2.91% over the next 35 trading days. Eventually the fund dropped more than 7% from the October RSI peak (the bottom occurred at the end of January 2014). The smallest decline was seen in February of this year when the fund declined 1.63% over 22 trading days. A natural decline will occur in our current instance, the main question is how much? Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the downside. Based on historical movement compared to current levels and the current position, the fund could drop at least 1.63% over the next 25 trading days if not
AMEX:XLP
by StockSignaler