Time For Humana To Naturally Cycle DownHumana Inc has been in a clearly defined bullish trend since July 2016. As of the close on May 15, this stock is at the top of the cycle which is near a strongly established resistance line. The projected future movements are highlighted below.
When we take a look at other technical indicators, the relative strength index (RSI) is at 73.8915. 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 just beginning to exit overbought territory and should encourage the stock to move bearishly down.
The true strength index (TSI) is currently 34.8840. 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 current reading declares the stock has been moving up.
The positive vortex indicator (VI) is at 1.2844 and the negative is at 0.7283. 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. Currently the positive indicator had been moving up, but the upward action is slowing. The stock should begin to move down and the positive and negative indicators will begin to move closer together.
The stochastic oscillator K value is 85.7857 and D value is 88.5560. 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 in overbought territory and the D is above the K value meaning the stock should begin to fall.
A similar pattern with volume occurred in December 2016. The stock moved up on greater than average volume for 4 days in a row before the stock began to sell off on greater than average volume. The same thing occurred on May 15. During this sell off in December, the stock sold off around 10% over the next 20 trading days. Even though something like this is possible right now, I conservatively believe the stock will hold to its white-dotted trendline which is a drop of at least 4%.
Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the downside, although definitive downward movement may take a few more days to develop. Based on historical movement compared to current levels and the current position, the stock could drop at least 4% over the next 33 trading days if not sooner.
More at LimitLessLifeSkills!
