Over the past week, there has been seen a high increase in the shares of iShares. In the former week, the shares increased up to 2.99% and over the year, it did up to 37%.
To focus on the highly volatile stocks can be a risky thing to do. It can either be a rapid profit or a loss. The fluctuation in the shares can be estimated by the previous trades of the stock. This can be an advantage to the traders. The traders have to be aware of the high risk before trading and getting involved with this. The skilful traders have this awareness and confidence and get profited and look at the long-term benefits rather than being concerned with the short term hurdles.
Overbuying and overselling of the stock is calculated in terms of being above -20 or below -80. Williams %R is a way to identify the overbought and oversold in the stock market.
There is another method which is the ADX (Average Directional Index) for knowing the strength of the trend. The average price range changes over time and the measurement of that is called ADX. If the stock price is changing, the indicator shows that and doesn’t move in a specific direction. The value ranges from 1 to 100. If the trend is weak, the value would be in the range of 0 to 25. If its value is in the range of 25-50, the trend is strong. And it is very strong and extremely in the cases of 50-75 and 75-100 respectively. The traders are being warned from the critically extreme conditions by CCI, a tool. It tells the relation between the current price and the average price over time.
For identifying the peaks and troughs, the highest and lowest values, moving averages are of help. J. Welles Wilder developed the RSI (Relative Strength Index) which oscillates between 0 to 100 to measure the speed and change in the stock price. If it’s above 70, it’s overbought and if it’s below 30, it’s oversold.