Technical Watch: Tracking the Signals on Shares of Ridley Corporation Ltd (RIC.AX)

After a recent market scan, we have seen that the Ultimate Oscillator reading is above 60 on shares of Ridley Corporation Ltd (RIC.AX). Technical analysts might be using the UO reading to uncloak overbought conditions.

Investing in the share market has traditionally offered bigger returns than different types of investments. Along with the opportunity for higher returns comes a higher amount of uncertainty. Stocks can be exposed to both market uncertainty and business or financial uncertainty. Market uncertainty may be evident when the overall market takes a nose dive. Investors may hold stock of a firm that has been performing great, but due to poor market conditions, the stock decreases in value. Investors may look to offset this uncertainty by investing in different vehicles that don’t tend to move together. The business uncertainty with stocks involves factors that may cause a firm to perform poorly. This may include bad management, heightened competition, and declining firm profits. Investors may try to limit this uncertainty by creating a diversified portfolio including stocks from other sectors.

Shares of Ridley Corporation Ltd (RIC.AX) have a 200-day moving average of 1.39. The 50-day is 1.46, and the 7-day is sitting at 1.46. Using a bigger time frame to evaluate the moving average such as the 200-day, may aid block out the noise and chaos that is sometimes caused by daily price fluctuations. In some cases, MA’s may be used as strong reference points for spotting support and resistance levels.

Currently, the 14-day ADX for Ridley Corporation Ltd (RIC.AX) is 22.04. 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 Average Directional Index or ADX is a 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 aid understand the direction of the trend as well as the overall momentum. Many traders will use the ADX alongside different indicators in order to aid uncloak proper trading entry/exit points.

Ridley Corporation Ltd (RIC.AX)’s Williams Percent Range or 14 day Williams %R is sitting at 0.00. Typically, if the value heads above -20, the stock may be considered to be overbought. On the flip side, if the indicator goes under -80, this may signal that the stock is oversold.

When completing stock analysis, investors and traders may opt to review different technical levels. Ridley Corporation Ltd (RIC.AX) presently has a 14-day Commodity Channel Index (CCI) of 148.56. Investors and traders may use this indicator to aid uncloak price reversals, price extremes, and the strength of a trend. Many investors will use the CCI in conjunction with different indicators when evaluating a trade. The CCI may be used to uncloak if a stock is entering overbought (+100) and oversold (-100) territory.

The RSI, or Relative Strength Index, is a commonly used technical momentum indicator that compares price movement over time. The RSI was created by J. Welles Wilder who was striving to calculate whether or not a stock was overbought or oversold. The RSI may be helpful for spotting abnormal price activity and volatility. The RSI oscillates on a scale from 0 to 100. The normal reading of a stock will fall in the range of 30 to 70. A reading over 70 would indicate that the stock is overbought, and possibly overvalued. A reading under 30 may indicate that the stock is oversold, and possibly undervalued. After a recent check, the 14-day RSI is presently at 60.77, the 7-day stands at 72.40, and the 3-day is sitting at 90.04.

Investors sometimes hear the saying “buy low, sell high”. This may seem highly obvious to anybody gazing to get into the share market. Even though investors typically know they should do this, novices tend to do just the opposite, buy high and sell low. Often times, amateur investors will get carried away when a stock is trending higher. They may attempt to get in on the stock after a big move with hopes of the stock going higher and an overall thought that relates to the fear of missing out. Often times, investors will find themselves in a precarious situation when this occurs. They might have taken a chance on a stock that maybe was too good to be true. Investors may regret buying after the big move when the price has far exceeded the underlying value. Closely watching the fundamentals may aid investors avoid getting into sticky situations such as buying too high.

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