Investors have placed Smurfit Kappa Group Plc (SKG.L) shares on watch as the Aroon Down indicator has moved above 70, indicating that there is downward momentum building for the shares.
The Aroon indicator was developed by Tushar Chande in 1995. Aroon is used to quantify the presence and strength of trends. According to Chande, whenever the components of the Aroon indicator are in close proximity, this is a sign of market consolidation. Aroon Up measures the uptrend, and Aroon Down measures the downtrend. When Aroon Up or Aroon Down values drop below 50, this shows loss of upward and downside momentum respectively. Values above 70 are signs of a strong trend for either component, while values that are less than 30 show that primary trend is weakening and opposing trend is picking up.
With the share market still riding high, bear market scenarios may not be at the forefront of the average investor’s mind. There are plenty of professionals out there that are predicting that the markets will be turning south in the near future. There are others who believe that the bulls are still in control, and they will be faddish the charge higher over the next few months. Nobody knows for sure which scenario will play out, but being ready for any market situation may turn out to be a portfolio savior in the long-term. Any time the share market drops sharply or sees sustained losses, investors may start to worry. These declines are usually followed by extreme headlines from financial news outlets. It is critical to remember that corrections are a normal part of market cycles. Being able to control panic and pessimism may be a great skill for the investor to use when times get tough. Knowing explicitly what stocks are in the portfolio can assist make unsettling market conditions bearable for investors. If the difficult home work has been done and the plan is in motion, there may not be any should look into second guess and cause more problems before things turn around and smart out.
Traders also may be narrowing in on the ATR or Average True Range indicator when reviewing technicals. At the time of writing, Smurfit Kappa Group Plc (SKG.L) has a 14-day ATR of 105.07. The average true range indicator was created by J. Welles Wilder in order to quantify volatility. The ATR may help traders with figuring out the strength of a breakout or reversal in price. It is critical to note that the ATR was not designed to figure out price direction or to predict future prices.
Some investors may find the Williams Percent Range or Williams %R as a useful technical indicator. Presently, Smurfit Kappa Group Plc (SKG.L)’s Williams Percent Range or 14 day Williams %R is resting at -85.83. Values can range from 0 to -100. A reading between -80 to -100 may be typically viewed as strong oversold territory. A value between 0 to -20 would represent a strong overbought condition. As a momentum indicator, the Williams R% may be used with nonstandard technicals to assist define a specific trend.
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Investors may use multiple technical indicators to assist uncloak trends and buy/sell shows. Presently, Smurfit Kappa Group Plc (SKG.L) has a 14-day Commodity Channel Index (CCI) of -115.08. The CCI was developed by Donald Lambert. The assumption behind the indicator is that investment instruments move in cycles with highs and lows coming at certain periodic intervals. The original guidelines focused on creating buy/sell shows when the reading moved above +100 or below -100. Traders may also use the reading to identify overbought/oversold conditions.
The Average Directional Index or ADX is a trendy technical indicator designed to assist quantify trend strength. Many traders will use the ADX in combination with nonstandard indicators in order to assist formulate trading strategies. Presently, the 14-day ADX for Smurfit Kappa Group Plc (SKG.L) is 52.11. In general, 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 ADX alone was designed to quantify trend strength. When combined with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI), it can assist decipher the trend direction as well.
Taking a peek at some Moving Averages, the 200-day is at 2912.91, the 50-day is 2531.24, and the 7-day is sitting at 2160.86. The moving average is a trendy gadget among technical stock analysts. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific timeframe of time. Moving averages can be very helpful for identifying peaks and troughs. They may also be used to assist the trader think through proper support and resistance levels for the stock.
At times, share market volatility can wreak havoc on investors. When the market becomes highly volatile, investors may get the jitters and think they should look into rush to action. In the heat of the moment, it can be tricky to see the clear skies in the distance. Investors may be best served at times to just let the cards fall where they may and not try to be a hero and drastically change the portfolio. Following a solid plan may allow investors to lay out of kilter the gas when times get tough. If the home work is well done and the plan is in place, sticking to the plan might be the call. Of season nobody wants to see a significant drop in the value of stocks that they own. Being able to see the overall picture when the markets become turbulent may allow the investor to move forward with confidence.