Economy

Shares in the Spotlight: IDEAL OPTICS LTD.

As the markets continue to chug along, investors may be trying to maximize gains and become better positioned for success. There are many different schools of thought when it comes to stock trading. Many traders will use the ADX in combination with other indicators in order to help formulate trading strategies. Making the transition to the next level is most likely on the minds of many dedicated investors. As we head into the second half of the year, it remains to be seen which way the market will lean.

Typically bull markets are times when investors may be willing to be a bit more speculative with stock selection. CIBC Asset Management Inc now owns 18,970 shares of the exchange traded fund's stock worth $1,018,000 after buying an additional 5,236 shares during the last quarter. A common look back period is 14 days. The moving average is a popular tool among technical stock analysts. The ATR is not used to figure out price direction, just to measure volatility. The ADX was introduced by J. Welles Wilder in the late 1970's and it has stood the test of time. Although the CCI indicator was developed for commodities, it has become a popular tool for equity evaluation as well. The general interpretation of the ATR is the higher the ATR value, the higher the volatility.

Investors may be watching other technical indicators such as the Williams Percent Range or Williams %R. Normal oscillations tend to stay in the range of -100 to +100. Williams %R is a popular technical indicator created by Larry Williams to help identify overbought and oversold situations. The Williams %R is similar to the Stochastic Oscillator except it is plotted upside-down. The Williams %R is a momentum indicator that helps measure oversold and overbought levels. A reading from -80 to -100 would signal an oversold situation. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. When combined with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI), it can help decipher the trend direction as well. Some analysts believe that the ADX is one of the best trend strength indicators available.

Investors may use various technical indicators to help spot trends and buy/sell signals. The cloud is also one of the easiest indicators to use. Currently, the 14-day ADX for Ramelius Resources Ltd (RMS.AX) is 23.09. A reading under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend.

Akin to all moving averages, the angle of the Tenkan line is very important as the sharper the angle, the stronger the trend while the flatter the Tenkan, the flatter or lesser the momentum of the move is. Technical analysis enables investors to examine previous market activity to try and predict future stock price movement. Ramelius Resources Ltd (RMS.AX) now has a 14-day Commodity Channel Index (CCI) of 178.07. Typically, the CCI oscillates above and below a zero line. A CCI reading above +100 would imply that the stock is overbought and possibly ready for a correction. A reading under 30 may indicate that the stock is oversold, and possibly undervalued.

Traders are paying renewed attention to shares of Breakwater Island Trust (BRI.AX). The RSI is considered to be an internal strength indicator, not to be confused with relative strength which is compared to other stocks and indices. Values can range from 0 to -100. When the RSI line moves up, the stock may be experiencing strength. Remember a SMA (simple moving average) will smooth out all the data and make it equal but the Tenkan Line will take the highest high and lowest low over the last 9 periods. Many traders keep an eye on the 30 and 70 marks on the RSI scale.

Moving average indicators are used widely for stock analysis. Ichimoku Kinko Hyo, which translates to "equilibrium at a glance chart", was developed to allow a trader to quickly and easily appraise the trend, momentum, and support and resistance levels of an asset, from a single chart.



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