Oct 10 is a positive day so far for Direxion Daily S&P500 Bull 3X ETF (NYSEARCA:SPXL) as the ETF is active during the day after gaining 0.28% to hit $39.63 per share.
When focusing on technical stock analysis, traders and investors may choose to also study the ATR or Average True Range.
Taking a look at several key technical indicators, the stock's price is $49.12 and their relative strength index (RSI) stands at 56.62. The RSI was originally created by J. Welles Wilder which was introduced in his 1978 book "New Concepts in Technical Trading Systems". Wilder has developed multiple indicators that are still quite popular in today's investing landscape. The ATR basically measures the volatility of a stock on a day-to-day basis.
Investors may be watching other technical indicators such as the Williams Percent Range or Williams %R.
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Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. A reading under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal.
The ETF is -3.90% of its 52-Week High and 221.98% of its low, and is now having ATR of 2.83. The Williams %R is similar to the Stochastic Oscillator except it is plotted upside-down. A reading between 0 and -20 would indicate an overbought situation. If the indicator travels under -80, this may signal that the stock is oversold. Some analysts believe that the ADX is one of the best trend strength indicators available. However, it is important to not use the Tenkan line as a gauge of the trend but more so the momentum of the move. The ADX alone measures trend strength but not direction. Traders often add the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of a trend. Many traders will use the ADX alongside other indicators in order to help spot proper trading entry/exit points. At the time of writing, the 14-day ADX for Smallcap Bull 3X Direxion (TNA) is noted at 48.00. Many technical chart analysts believe that an ADX value over 25 would suggest a strong trend. A reading under 20 would suggest no trend, and a reading from 20-25 would suggest that there is no clear trend signal. A value of 50-75 would signal a very strong trend, and a value of 75-100 would indicate an extremely strong trend.
Turning to addtiional indicators, Total Bond Market Bear -1X Direxion (SAGG) now has a 14-day Commodity Channel Index (CCI) of 108.66. Despite the name, CCI can be used on other investment tools such as stocks. Typically, the CCI oscillates above and below a zero line. A CCI reading above the +100 level would suggest that the stock is overbought and possibly primed for a correction.
Over the course of the day 122,006 shares traded hands, as compared to an average volume of 1.23 million over the last 30 days for Direxion Daily S&P500 Bull 3X ETF (NYSEARCA:SPXL). Taking a look at the relative strength indictor, we note that the 14-day RSI is now at 76.10, the 7-day stands at 73.89, and the 3-day is sitting at 56.32. The RSI operates in a range-bound area with values between 0 and 100. With the move the stock is now valued at $30.30. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a certain period of time. The RSI may be more volatile using a shorter period of time. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70.
The Average Directional Index or ADX is a popular technical indicator created to help measure trend strength. 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. Investors may have to make a decision whether to ease-up or stay aggressive.