VMware, Inc. (VMW) has created a compelling message for traders in the most recent trading. That message has grown stronger as the technical chart setup has developed into a more composite picture for the stock. This is the breakdown as we see it. Contrary to popular belief, ignorance is not bliss. What you don’t know can actually harm you; and if you are a day trader, $1 worth of ignorance could potentially cost you $100 in real wealth. Traders that succeed know this; which is why many don’t take on any trade unless they listen intently to what the technical chart has to say.
The 50 and 200 SMAs for VMW have created a marked trend which is now helping traders to make solid decisions regarding the stock. It’s a trend that is now unmistakable. Based on the trend levels presented by both indicators, the overall sentiment towards VMW is best described as bullish. This trend has created a unified opinion across the trading floor and it is clear that the overall outlook for the stock is now established as positive. But it’s not just the outlook that’s being affected for the stock. Thanks to the consolidated opinion on VMW, activity has also seen a pronounced trend. Under current sentiments the volume activity and subsequent trend has created a strong outlook from buyers and sellers. Sentiments have a tendency to either weaken or strengthen as other technical factors begin to influence overall outlook. It’s interesting to see how things are playing out for VMW. It is unsurprising in the case of VMW, that the current trend has created some enthusiasm among traders regarding the stock. In terms of consistency, it is clear that both the 50 and 200 SMAs have done their job in bring traders the overall trend-picture currently being seen for VMW.
There is of course more to the tale than just what the SMAs have presented. For those added details, we can take a look at the Relative strength indicator (RSI) and Stochastic measures, both of which give deeper insights into the overall sentiment of buyers and sellers. SMAs will tell alert you to price direction, but when it comes to judging what buyers and sellers are doing, few indicators are better than RSI and the Stochastic. It as this level of technical data that a trader can determine whether a stock is currently overbought is oversold. The current picture for VMW is of course very telling based on these two additional measures. Based on current readings, VMW’s 14-day RSI is 36.03%. Taken on the standard scale of measurement for RSI, this suggests that VMW is neutral, suggesting that the stock is relatively stable in terms of price movement up or down. The stochastic reading offers another solid measure of whether the stock is either overbought, or oversold. In the case of VMW, Stochastic readings gathered over the last 30 days have created a score of 16.47%. This suggests VMW is oversold at current levels.
Now, you might be forgiven for thinking that the above technical indicators are all we need to make a sound judgment on VMW, but that would be a mistake. Not a major one, but a mistake which nonetheless could cost you. Other indicators can still be layered on to provide a more detailed picture. By this point in the analysis of VMW, it is clear that other technical indicators are saying essentially the same things. Specifically the -5.84 has birthed a negative overall sentiment when measured over the previous 30 days or so of trading. Over the longer-term VMW has outperform the S&P 500 by 24.16. This has, unsurprisingly, created lower volatility levels when compared with similar stocks of the same grade and class. Historical volatility is no less consistent. The historical volatility picture for VMW is shown in the reading of 26.07%. VMW has clearly shown its full hand by the overall input of these technical indicators. But there is one final measure that when added to the already rich mix, shows in full color what VMW is doing. The indicator is the Average True Range, and based on the current 2.02 reading, VMW is certainly worth paying attention to.
VMW has shown via its technicals, a full and rich picture of price direction, momentum and overall market sentiment. It is up to the trader to make the best decision based on what is shown.