The technicals for The Dow Chemical Company (DOW) has spoken via its technical chart and the message is loud and clear. Based on that message, this is the relevant information necessary to make sense of that current setup. The decisions taken by a trader should always be based on sound, credible and unambiguous information. Only the technical chart setup that has fully amalgamated all the sentiments and data of a stock can do that with any level of reliability.
(DOW) is now solidly presented where a clearly defined trend is concerned. This is evident based on information displayed via its 50 and 200 SMAs. The trend levels paint a telling picture which when analyzed, is best characterized as bullish. As a result of the current trends presented by both SMAs, traders have offered a defined and strong outlook for the stock. The overall sentiment or disposition towards the stock can best be described as positive. The discernable sentiment towards the stock has created a resulting influx of opinion that is now created a volume situation clearly titling towards a weak disposition as the situational flux between buyers and sellers take a definitive shape. Traders have certainly drawn their line in the sand as they look to honker down in one definitive position based on existing sentiment. ; Since these sentiments have taken shape, a marked level of indifference has materialized when all statistical factors are considered regarding the stock’s profile among traders. Overall viability is therefore, based on the foregoing readings, highlighting the disposition of traders towards the stock. This disposition should retain consistency with the overall technical picture cast by the two important technical indicators mentioned above.
Relative strength indicator (RSI) and Stochastic measures offer another dimension to the whole methodology of analyzing a stock for its potential and existing trends. Both measures are relied upon heavily by successful traders, and combined; they offer an insightful peek inside the workings of a stock. They specifically allow traders to gauge whether or not a given stock is overbought or oversold. The overbought/undersold measure should never be underestimated for it allows a trader to see where the directional bearings are for a given stock. Are buyers more represented? Are sellers dominating? Both these indicators help I determining this general direction of the marketplace. DOW’s prevailing reading for its 14-day RSI is 57.24%; this means, on current reading, that the stock is neutral, suggesting that the stock is relatively stable in terms of potential price directional movement in either direction. The stochastic reading offers a supplementary outlook for directional movement of DOW. Stochastic readings amassed over the last thirty days have created a score of 87.71%. This indicates that the stock is overbought at current levels.
Sometimes it’s necessary to augment the overall analysis of a stock with additional indicators. The ones outlined above then take on stronger, more rigorous bearing on the way the approach towards trading a stock. A picture is by now surely emerging on the directional thrust of (DOW); that emerging picture is proving to be a magnet for traders that have previously shown an interest. The +3.90 has manifested a positive reading in the last month or so of trading since it began its initial directional move. Longer-term, the stock has outperform the S&P 500 by 5.9%. This has created higher daily volatility when matched with stocks of the same class. Things look the same when measured historically. Historical volatility provides a measure of 14.78%. DOW therefore offers a handy picture of overall momentum based on the foregoing measures. The last, but certainly not least, indicator that helps paint the overall picture of viability is the average true range which is currently 1.64. Combined, all the indicators when synchronized properly can yield excellent trading results.
DOW’s market machinations have now been laid bare. All the technicals dissected above have now revealed their hand and any trader can see what they should do with the stock. Only a fool would ignore these powerful messages.