Asian stock markets were mixed and muted Wednesday, opening higher as oil issues drove higher on strong crude prices, and as property stocks built on profit expectations. But markets turned cautious in afternoon trading in front of the pending US Federal Reserve Board rate announcement. Hong Kong and Shanghai finished in the red, Tokyo was closed on holiday, and other regional exchanges were uneven.
The Hong Kong Hang Seng Index fell 135.41, or 0.43%, to 31,414.52, as losing issues outnumbered gainers 25 to 23.
Leading the upside were China Resources Land (1109:HK), up 5.3%, followed by China Overseas Land (688:HK), up 4.3%, and then PetroChina (857:HK), up 2.4%.
Watching the signals for Primo Water Corp (PRMW), we have noted that the Chaikin Oscillator is below zero. Traders may be watching for possible bearish momentum on the stock.
Investors are frequently looking for any possible way to get a leg up in the market. This may involve committing to plan that will hopefully outperform the market and maximize profits. Many investors will choose to employ top-down analysis. Top-down analysis involves examining the big picture of the economy and the world of finance. After studying global economic conditions, investors may then analyze different sectors that are possibly well positioned to beat the market. After identifying the sector or sectors, investors may then do further analysis of stocks within the specific industry in order to find firms that are successful and primed for growth. Other individual investors may choose to go with bottom-up analysis when looking for stock to add to the portfolio. The bottom-up approach takes the emphasis off of the power and significance of market and economic cycles. Investors may focus on individual companies and not worry so much about the specific industry or economy in general.
The Average Directional Index or ADX is technical analysis indicator used to discern if a market is trending or not trending. The ADX alone measures trend strength but not direction. Using the ADX with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) may help determine the direction of the trend as well as the overall momentum. Many traders will use the ADX alongside other indicators in order to help spot proper trading entry/exit points. Currently, the 14-day ADX for Primo Water Corp (PRMW) is 35.06. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would signal a very strong trend, and a value of 75-100 would indicate an extremely strong trend.
When applying indicators for technical analysis, traders and investors might want to look at the ATR or Average True Range. The current 14-day ATR for Primo Water Corp (PRMW) is currently sitting at 0.56. The ATR basically measures the volatility of a stock on a day-to-day basis. The average true range is typically based on 14 periods and may be calculated daily, weekly, monthly, or intraday. The ATR is not considered a directional indicator, but it may reflect the strength of a particular move.
When performing stock analysis, investors and traders may opt to view technical levels. Primo Water Corp (PRMW) presently has a 14-day Commodity Channel Index (CCI) of -148.36. 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.
Shares of Primo Water Corp (PRMW) have a 200-day moving average of 14.10. The 50-day is 12.93, and the 7-day is sitting at 12.92. Using a bigger time frame to assess the moving average such as the 200-day, may help block out the noise and chaos that is often caused by daily price fluctuations. In some cases, MA’s may be used as strong reference points for spotting support and resistance levels.
Checking in on some other technical levels, the 14-day RSI is currently at 28.00, the 7-day stands at 18.15, and the 3-day is sitting at 15.06. Many investors look to the Relative Strength Index (RSI) reading of a particular stock to help identify overbought/oversold conditions. The RSI was developed by J. Welles Wilder in the late 1970’s. Wilder laid out the foundation for future technical analysts to further investigate the RSI and its relationship to underlying price movements. Since its inception, RSI has remained very popular with traders and investors. Other technical analysts have built upon the work of Wilder. The 14-day RSI is still a widely popular choice among technical stock analysts.
When dealing with the equity markets, investors are often tasked with trying to find stocks that are bound for glory. Every investor dreams of finding those stocks that were overlooked but are poised to pick up momentum. New investors are often instructed to set goals before starting to invest. Creating attainable, realistic goals can be a good starting point before digging into the investment trenches. After setting up goals considering financial status, objectives, timeframes and risk appetite, the next step may involve creating an actionable plan. Once the plan is in place, it may be extremely important to routinely monitor the performance of the portfolio. There are often many well crafted investment plans that for whatever reason don’t seem to be working out properly. Being able to evaluate and adjust the plan based on market activity may end up being the difference between a winning or losing portfolio. Being able to adapt to the fast paced and often times tumultuous market landscape can be a gigantic benefit for long-term portfolio health.
