Trading Box: Plus Directional Indicator Seen Above Minus Directional Indicator for Resonant Inc (RESN)

Checking in on the numbers for Resonant Inc (RESN), we have recently seen that the +DI is higher than the -DI. Traders may be keeping close watch to see if the stock is showing signs of bullish momentum.

Individual investors are constantly hearing about the next hot stock to buy. Acting purely on these types of tips can be hazardous to the portfolio if the research is not completed. Sometimes these stock tips will pan out and be correct, other times they can leave the investor wondering why they acted on the speculative advice. Even if a stock tip is correct, the results may have already been manifested and the investor would simply be getting in way too late. Knowing what information is reliable can drastically improve the chances of making smarter stock picks. Even the most praised stocks may not be able to withstand an overall market downturn.    

Shifting gears to the Relative Strength Index, the 14-day RSI is currently sitting at 55.99, the 7-day is 57.61, and the 3-day is currently at 56.52 for Resonant Inc (RESN). The Relative Strength Index (RSI) is a highly popular momentum indicator used for technical analysis. The RSI can help display whether the bulls or the bears are currently strongest in the market. The RSI may be used to help spot points of reversals more accurately. The RSI was developed by J. Welles Wilder. As a general rule, an RSI reading over 70 would signal overbought conditions. A reading under 30 would indicate oversold conditions. As always, the values may need to be adjusted based on the specific stock and market. RSI can also be a valuable tool for trying to spot larger market turns.

Moving average indicators are used widely for stock analysis. Many traders will use a combination of moving averages with different time frames to help review stock trend direction. One of the more popular combinations is to use the 50-day and 200-day moving averages. Investors may use the 200-day MA to help smooth out the data a get a clearer long-term picture. They may look to the 50-day or 20-day to get a better grasp of what is going on with the stock in the near-term. Presently, the 200-day moving average is at 2.71 and the 50-day is 2.85.

At the time of writing, the 14-day ADX for Resonant Inc (RESN) is 22.05. Many technical chart analysts believe that an ADX value over 25 would suggest a strong trend. A reading under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal. The ADX is typically plotted along with two other directional movement indicator lines, the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI). Some analysts believe that the ADX is one of the best trend strength indicators available.

Traders may be focusing on other technical indicators for stock assessment. Presently, Resonant Inc (RESN) has a 14-day Commodity Channel Index (CCI) of 147.6. The CCI technical indicator can be used to help determine if a stock is overbought or oversold. CCI may also be used to help discover divergences that could possibly signal reversal moves. A CCI closer to +100 may provide an overbought signal, and a CCI near -100 may offer an oversold signal.

Investors may be watching other technical indicators such as the Williams Percent Range or Williams %R. The Williams %R is a momentum indicator that helps measure oversold and overbought levels. This indicator compares the closing price of a stock in relation to the highs and lows over a certain time period. A common look back period is 14 days. Resonant Inc (RESN)’s Williams %R presently stands at -40.62. The Williams %R oscillates in a range from 0 to -100. A reading between 0 and -20 would indicate an overbought situation. A reading from -80 to -100 would indicate an oversold situation.

Trying to project the day to day short-term movements of the stock market may be all but impossible. Stocks have the tendency to make sudden moves on even the slightest bit of news or for apparently no reason at all. The daily trader may be looking to capitalize on swings or momentum, but the long-term investor may be searching for stability and consistency over a sustained period of time. During trading sessions, stock movements can seem like a popularity contest from time to time. Even after careful study, there may be no logical reason for a particular stock move. Riding out the waves of uncertainty may not be easy, but having a full-proof plan for when markets erode may just be the savior. Having the patience to wait out abnormal moves may help evade the mistake of letting go too soon out of panic.

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