Wall Street pre-market Wednesday was cautious, with US stock market index futures pointing to an opening bell roughly even with Tuesday’s close, with the tech-centric Nasdaq possibly opening lower. European bourses were choppy with Frankfurt in the green, and Asian exchanges closed mixed. Markets have eyes upon the 2 pm ET rate announcement from the US Federal Reserve, and also Fed forecasts of economic growth, inflation and interest rates, which may provide clues if three rather than two rate increases will follow in 2018. Facebook (FB) faces ongoing criticism and lawsuits regarding sale of user data. Bitcoin was trading at $9,070, oil was at $63.90 and 10-year US Treasuries offered 2.88%.
Tracking the indicators for Crescent Point Energy Corp (CPG.TO), we can now see that the Chaikin Oscillator reading is below zero. Tracking this signal, traders may be watching for signs of a possible bearish trend forming.
Diversification can be an important aspect of any investor’s portfolio. Investors may choose to spread out stock holdings between foreign stocks and stocks with different market capitalizations. Investors may have to first become aware of the risk associated with owning a wide variety of stocks. Owning stocks that belong to different industries may also be a help to the success of the portfolio. Often times, sectors may trade off being market leaders. Owning all one sector may leave too much risk exposed if the sector suddenly tanks and falls out of favor with investors. Investors may need to occasionally do a strategic review of the equity portion of the portfolio. Knowing exactly what is held may help the investor when the time comes to make some adjustments.
Investors and Traders using technical analysis to review stocks may be focusing on the ATR or Average True Range. Currently, Crescent Point Energy Corp (CPG.TO) has a 14-day ATR of 0.20. The Average True Range is an investor tool used to measure stock volatility. The ATR is not used to figure out price direction, just to measure volatility. The ATR is an indicator developed by J. Welles Wilder. Wilder has developed multiple indicators that are still quite popular in today’s investing landscape. The general interpretation of the ATR is the higher the ATR value, the higher the volatility.
Taking a closer look from a technical standpoint, Crescent Point Energy Corp (CPG.TO) presently has a 14-day Commodity Channel Index (CCI) of -61.47. 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.
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For further review, we can take a look at another popular technical indicator. In terms of moving averages, the 200-day is currently at 6.60, the 50-day is 4.04, and the 7-day is resting at 3.98. Moving averages are a popular trading tool among investors. Moving averages can be used to help filter out the day to day noise created by other factors. MA’s may be used to identify uptrends or downtrends, and they can be a prominent indicator for detecting a shift in momentum for a particular stock. Many traders will use moving averages for different periods of time in conjunction with other indicators to help gauge future stock price action.
Currently, the 14-day ADX for Crescent Point Energy Corp (CPG.TO) is sitting at 17.63. In general, 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.
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. Crescent Point Energy Corp (CPG.TO)’s Williams %R presently stands at -62.34. 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.
Investors might be trying to figure out the best way to approach the stock market. After creating a plan that includes a list of stocks to purchase, investors may be looking to gauge the best time to enter the trade. With markets still cruising along at high altitudes, investors may be worried about buying at the top. Most individuals would probably agree that getting out before the market drops would be the best play. Obviously this is much easier said than done. If the warning signs were blatant, everyone would know exactly when to sell and when to re-buy. When the stock market has a big decline, the natural instinct is generally to sell in order to protect gains or eliminate further losses. Trying to time the market can have negative implications for investors who are not prepared to handle extremely volatile market conditions. Being prepared for any sudden change in the overall economy or stock market conditions may help the investor stay afloat for the long haul.
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