In last week’s blog posting we began a discussion of technical indicators for the stock market which are widely used. My purpose is to assist my fellow advisors in any way possible in the task of portfolio management, an area of significant concern these days. Here is a list of the first five indicators, a hyperlink to each for more information, and four more indicators you may want to consider.
Technical Indicators One Through Five
1) Accumulation/Distribution Line. For more information, click here
2) Average Directional Index (ADX). For more information, click here
3) Relative Strength Index (RSI). For more information click here
4) Average True Range (ATR). For more information, click here
5) Parabolic SAR (PSAR) For more information, click here
Technical Indicators Six Through Nine
This week we will discuss the following four technical indicators.
This, like several of last week’s indicators is used to identify trends in securities. However, the Aroon also provides insight into the likelihood of a trend reversal. It contains two lines: one to measure the strength of the uptrend and the other for the downtrend. Click here for definition
The Aroon Oscillator is a product of the Aroon in that it uses the two lines in the latter to gauge the strength of the trend and the likelihood of a reversal. Click here for definition
MACD (Moving Average Convergence Divergence)
This indicator is used to determine the relationship between two exponential moving averages (EMA). It begins by calculating the MACD which is the difference between the 26 day and the 12 day EMA. Then, the nine day EMA is placed on top of the MACD and becomes a trigger for buying and selling decisions. Click here for definition