The CCI was created to typically stay within the reading of -100 to +100. Investors and traders may use this indicator to help spot price reversals, price extremes, and the strength of a trend. The CCI may be used to spot if a stock is entering overbought (+100) and oversold (-100) territory. A reading from -80 to -100 would indicate an oversold situation. Because MACD uses moving averages and moving averages lag price, signal line crossovers can come late and affect the reward-to-risk ratio of a trade. It uses a combination of price change data and time change data to identify potential changes in market sentiment, thereby exposing turning points.
When looking at technical levels, traders should not overlook the RSI reading as it often can dictate if momentum has pushed past a key metric.
Checking in on moving averages, the 200-day is at 3.66, the 50-day is 4.18, and the 7-day is sitting at 4.24. Checking on another technical indicator, the 14-day RSI is now sitting at 61.86, the 7-day rests at 69.96, and the 3-day is presently at 89.56 for Ishares Ftse Kld 400 Social Index Fund (DSI). The Average Directional Index or ADX is a technical analysis indicator used to describe if a market is trending or not trending. Wilder introduced RSI in his book "New Concepts in Technical Trading Systems" which was published in 1978. The RSI may be useful for spotting abnormal price activity and volatility. Normal oscillations tend to stay in the range of -100 to +100. Chart analysts may also use the indicator to project possible price reversals and to define trends. As a momentum oscillator, the RSI operates in a set range.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. iShares MSCI Mexico Investable Market Index Fund (EWW) now has Return on Equity of -1.18. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. A reading under 30 may indicate that the stock is oversold, and possibly undervalued.
iShares MSCI Brazil Capped Index Fund (the Fund), formerly iShares MSCI Brazil Index Fund, seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of publicly traded securities in the Brazilian market, as measured by the MSCI Brazil Index (the Index). For traders looking to capitalize on trends, the ADX may be an essential technical tool. Some analysts believe that the ADX is one of the best trend strength indicators available. ADX calculations are made based on the moving average price range expansion over a specified amount of time. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would indicate a very strong trend, and a value of 75-100 would signify an extremely strong trend.
Investors may be trying to figure out how much risk they are able to handle with their current stock holdings. Investors may be on the lookout for the major catalyst that either keeps the bulls charging into the second half the year, or wakes up the sleeping bears. Every investor wants their trades to be profitable, and doing that little extra piece of homework could be just what the finance doctor ordered for staying on top of the stock market. Without properly being prepared, these opportunities may disappear quickly.