Uncategorized

Crosshatching the Charts: SMI in Focus For Saudi Arabia Ishares MSCI ETF (KSA)

Saudi Arabia Ishares MSCI ETF (KSA)’s Stochastic Momentum Index is cruising higher and has passed the key level of +40, indicating possible oversold territory.  The SMI indicator was developed by William Blau ad presented in Technical Analysis of Stocks & Commodities magazine in 1993, ten years after the original stochastic was invented.  The oscillator fluctuates between -100 and 100, and as such the indicator can be readily used to identify overbought and oversold levels. Readings above +40 occur when the market is trading near the top of its recent price range. Readings below -40 occur when the market is trading near the bottom of its recent price range.

Investors are often dealing with the decision of whether to sell a stock that has been a solid performer or hold on to it for more profit. This can be almost as trying as deciding when to buy a certain stock. Once investors have latched on to a certain stock, they may find it hard to let go. On the flip side, investors may also have to deal with cutting ties with a losing stock. With both scenarios, it may be important for investors to try to keep emotion out of the decision making process. Investors may feel that giving up on a losing stock can be admitting that a mistake was made. No matter what the circumstance, not letting go of a losing stock may lead to poor portfolio performance in the long run. Constantly keeping a close watching on fundamental and technical data can provide important information needed to stay afloat in the equity markets.

Traders are taking a closer look at shares of Saudi Arabia Ishares MSCI ETF (KSA) of late. The 14-day RSI is presently at 65.63, the 7-day is at 81.69, and the 3-day is resting at 96.75. The Relative Strength Index (RSI) is one of various popular technical indicators developed by J. Welles Wilder. Wilder introduced RSI in his publication “New Concepts in Technical Trading Systems” which was released in 1978. RSI measures the magnitude and velocity of directional price movements. The data is represented graphically by fluctuating between a value of 0 and 100. The indicator is computed by using the average losses and gains of a stock over a certain time period. RSI can be used to help spot overbought or oversold conditions. An RSI reading over 70 would be considered overbought, and a reading under 30 would indicate oversold conditions. A level of 50 would indicate neutral market momentum.

In terms of CCI levels, Saudi Arabia Ishares MSCI ETF (KSA) currently has a 14-day Commodity Channel Index (CCI) of 189.35. Investors and traders may use this indicator to help spot price reversals, price extremes, and the strength of a trend. Many investors will use the CCI in conjunction with other indicators when evaluating a trade. The CCI may be used to spot if a stock is entering overbought (+100) and oversold (-100) territory. The 14-day ADX is 28.48. Many technical chart analysts believe that an ADX reading over 25 would suggest a strong trend. A level 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.

Investors may be studying other technical indicators like 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. Saudi Arabia Ishares MSCI ETF (KSA)’s Williams %R presently stands at -5.19. 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. Looking at some moving average levels, the 200-day is at 30.98, the 50-day is 33.70, and the 7-day is sitting at 33.21. Moving averages can help identify trends and price reversals. They may also be used to help spot support and resistance levels. Moving averages are considered to be lagging indicators meaning that they confirm trends. A certain stock may be considered to be on an uptrend if trading above a moving average and the average is sloping upward. On the other side, a stock may be considered to be in a downtrend if trading below the moving average and sloping downward.

As the next earnings season comes into focus, investors will be keeping watch on the performance of companies that they own. A company that continually exceeds earnings projections is most likely on the right track. On the other end of the spectrum, a company that frequently misses earnings projections might provide some insight to the fact that something isn’t right. Although it is important to keep track of earnings estimates and results, it shouldn’t be the only thing that the investor is looking at regarding the stock. Just because a company misses or beats expectations for one quarter may not mean anything super special. Tracking performance over a longer period of time can help paint the bigger picture of what is going on with the company. Sharp investors often have the ability to look deeper into the numbers to see the actual causes of an earnings hit or miss. Of course estimates are just that, estimates, and some analysts may be more accurate than others. 

Leave a Reply

Your email address will not be published. Required fields are marked *

*