The Awesome Oscillator for Advanced Energy (AEIS) is showing a five day consistent downtrend, signaling building market momentum for the shares. Author and trader Bill Williams created The Awesome Oscillator Indicator (AO) and outlined the theory and calculation in his book “New Trading Dimensions”. The indicator shows the difference between two simple moving averages that can help define moving strength of the market. Bill Williams developed this indicator on the basis of earlier existed MACD and made a number of changes. The Awesome Oscillator subtracts a 34 period simple moving average (SMA) from a 5 period SMA. It illustrates what’s happening to the market driving force at the present moment. The interpretation is similar to MACD including buying when the oscillator crosses through the zero line to the upside and selling when it crosses back below. Of course, this will result is many false signals in flat or choppy markets. As with most indicators, the AO is best used alongside additional technical signals.
Investors are always looking to gain any possible advantage in the stock market. Knowing the various risk and return possibilities for various types of stocks can be critical to positive performance. Creating a balanced equity portfolio may be the essential first step when thinking about diving into the equity markets. Investors may come from all different types of backgrounds, and they may face completely different situations. Each investor may need to identify their objectives and try to figure out what’s best for their specific situation. Investors may want to take a conservative approach to the markets. Others will be looking to go in full throttle with a very aggressive plan. Whatever the choice, it is important to note that picking stocks based on previous returns will never guarantee future returns. Investors have many choices they can make when looking to purchase stocks. Figuring out levels of risk, expectations of returns, and the overall investment time horizon can all play a big part in crafting the initial plan.
The RSI, or Relative Strength Index is another popular oscillating indicator among traders and investors. The RSI operates in a range-bound area with values between 0 and 100. When the RSI line moves up, the stock may be experiencing strength. The opposite is the case when the RSI line is heading lower. Different time periods may be used when using the RSI indicator. The RSI may be more volatile using a shorter period of time. Many traders keep an eye on the 30 and 70 marks on the RSI scale. A move above 70 is widely considered to show the stock as overbought, and a move below 30 would indicate that the stock may be oversold. Advanced Energy (AEIS) has a 14-day RSI of 33.34, the 7-day is at 25.82, and the 3-day is resting at 22.20.
Advanced Energy (AEIS) currently has a 14-day Commodity Channel Index (CCI) of -76.54. Active investors may choose to use this technical indicator as a stock evaluation tool. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. On the flip side, a reading below -100 may signal a downtrend reflecting weak price action. Using the CCI as a leading indicator, technical analysts may use a +100 reading as an overbought signal and a -100 reading as an oversold indicator, suggesting a trend reversal.
Shares of Advanced Energy (AEIS) have a 200-day moving average of 49.88. The 50-day is 53.87, and the 7-day is sitting at 48.44. 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.
The Average Directional Index or ADX is technical analysis indicator used to describe 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 Advanced Energy (AEIS) is 24.64. 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. The Williams Percent Range or Williams %R is another technical indicator that may be useful for traders and investors.
The Williams %R is designed to provide a general sense of when the equity might have reached an extreme and be primed for a reversal. As a general observance, the more overbought or oversold the reading displays, the more likely a reversal may take place. The 14 day Williams %R for Advanced Energy (AEIS) is noted at -93.49. Many consider the equity oversold if the reading is below -80 and overbought if the indicator is between 0 and -20.
Investors may be wondering which way stock market momentum will shift in the second half of the year. If the economic landscape shifts and markets start to go south, investors may need to have an action plan in place. Keeping the bigger picture in mind may help investors when markets are struggling. Short-term developments may cause the investor to lose confidence in certain holdings. Keeping the focus on stock analysis and the overall economic picture may help investors see through the trees. Sometimes the calm, cool, and collected approach will help settle the mind during turbulent market conditions. Being able to stay emotionally unattached to a stock or sector may assist the investor with making tricky buying or selling decisions. Being disciplined is an attribute that many successful investors share. Being prepared for many different scenarios can help ease the burden when those tough portfolio decisions have to be made.