The Money Flow Indicator for Paragon Entertainment Limited (PEL.L) has touched above 60 and has found a place on investor’s radar as it potentially nears the key 70 mark. The MFI indicator is an oscillator which ranges between fixed values of 0 and 100 and as with most oscillators divergences form a major part of trading with the MFI indicator. Traders look for divergence between the indicator and the price action. If the price trends higher and the MFI trends lower (or vice versa), a reversal may be imminent. Market tops tend to occur when the MFI is above 70 or 80. Market bottoms tend to occur when the MFI is below 20.
Investors should however be wary of trading these levels blindly. As the warning goes, an overbought market can remain overbought for an extended period. Strong trends can present a problem for these classic overbought and oversold levels. The MFI can become overbought, and prices can simply continue higher when the uptrend is strong. Conversely, the MFI can become oversold, and prices can simply continue lower when the downtrend persists. Like the RSI, this indicator is best used in conjunction with another indicator as confirmation.
Successful investors are typically highly knowledgeable when it comes to the stock market. Smart investors are usually able to know when to buy and when to sell. They are also adept at controlling risk and properly managing the portfolio to extract maximum profit. These types of investors have most likely put in the required time and effort that it takes to understand the inner workings of the market. Expecting that profits will start rolling in immediately can lead to extreme disappointment down the line. Investors have to learn how to align goals and expectations in order to confidently navigate the market terrain.
Investors might be interested in taking a closer look at additional stock technical levels. After a recent check, Paragon Entertainment Limited (PEL.L) has a 14-day ATR of 0.06. The average true range indicator was created by J. Welles Wilder in order to measure volatility. The ATR may help traders to determine the strength of a breakout or reversal in price. It is important to mention that the ATR was not designed to calculate price direction or to predict future prices.
Currently, the 14-day ADX for Paragon Entertainment Limited (PEL.L) is sitting at 29.81. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would identify a very strong trend, and a value of 75-100 would lead to an extremely strong trend. ADX is used to gauge trend strength but not trend direction. Traders often add the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of a trend.
Checking in on some other technical levels, the 14-day RSI is currently at 30.73, the 7-day stands at 31.22, and the 3-day is sitting at 75.04. 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.
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. Paragon Entertainment Limited (PEL.L)’s Williams %R presently stands at -91.25. 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.
Taking a closer look from a technical standpoint, Paragon Entertainment Limited (PEL.L) presently has a 14-day Commodity Channel Index (CCI) of -40.21. Typically, the CCI oscillates above and below a zero line. Normal oscillations tend to stay in the range of -100 to +100. A CCI reading of +100 may represent overbought conditions, while readings near -100 may indicate oversold territory. Although the CCI indicator was developed for commodities, it has become a popular tool for equity evaluation as well.
The stock market can be an exciting yet scary place for investors who are just starting out. Individual investors who decide to manage their own portfolios may need to hit the books and be ready to take a comprehensive approach. There is no lack of information about investing in the stock market, but figuring out where to start can be difficult. Setting up goals and defining the investment plan can help start the investor down the right path. As many seasoned investors know, there can be times when nothing seems to be going right. Keeping a clear head and focusing on the relevant information can help the investor stay steady when the going gets tough.