The SPDR fund tracking S&P Retail has been trending up for years. Lately the industry and fund have been on some rocky footing. Currently the fund is at a potential key support level with value to the upside. The projected future movements are highlighted below based on technical indicators.
When we take a look at other technical indicators, the relative strength index (RSI) is at 36.0704. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. The RSI has established two upward trending levels of support. Currently the RSI just bounced off of one of these lines. The last three times this occurred since this RSI support trend began resulted in quick gains of 5.36%, 7.83%, and 9.60%. This is the first indicator this fund could turn bullish.
The true strength index (TSI) is currently 4.0070. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The TSI has also been trending up since the beginning of 2016. Although the current TSI level is not near this supporting trendline, the delay in the indicator could be the reason. It is important to note the TSI has come down from its most recent peak and its current position normally occurs as the fund is sliding downward. This indicator may be telling us the downward movement may continue for a little bit longer before the fund progresses upward.
The positive vortex indicator (VI) is at 0.6967 and the negative is at 1.1494. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. Even though both indicators are unfavorable to bullish movement, they have both begun to reverse course. This reversal does require more movement to favor new bullish movement for the fund. If this movement occurs within the next 3 days, the fund should begin moving upward.
The stochastic oscillator K value is 4.0425 and D value is 11.0491. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. This indicator is clearly in oversold territory. Previous oversold levels for this indicator during the fund's upward trend have always lead to a reversal. This is another strong indicator the fund will move upward.
Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the upside, although definitive upward movement may take a few more days to develop. Based on historical movement compared to current levels and the current position, the fund could gain at least 4% over the next 27 trading days if not sooner.
When we take a look at other technical indicators, the relative strength index (RSI) is at 36.0704. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. The RSI has established two upward trending levels of support. Currently the RSI just bounced off of one of these lines. The last three times this occurred since this RSI support trend began resulted in quick gains of 5.36%, 7.83%, and 9.60%. This is the first indicator this fund could turn bullish.
The true strength index (TSI) is currently 4.0070. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The TSI has also been trending up since the beginning of 2016. Although the current TSI level is not near this supporting trendline, the delay in the indicator could be the reason. It is important to note the TSI has come down from its most recent peak and its current position normally occurs as the fund is sliding downward. This indicator may be telling us the downward movement may continue for a little bit longer before the fund progresses upward.
The positive vortex indicator (VI) is at 0.6967 and the negative is at 1.1494. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. Even though both indicators are unfavorable to bullish movement, they have both begun to reverse course. This reversal does require more movement to favor new bullish movement for the fund. If this movement occurs within the next 3 days, the fund should begin moving upward.
The stochastic oscillator K value is 4.0425 and D value is 11.0491. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. This indicator is clearly in oversold territory. Previous oversold levels for this indicator during the fund's upward trend have always lead to a reversal. This is another strong indicator the fund will move upward.
Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the upside, although definitive upward movement may take a few more days to develop. Based on historical movement compared to current levels and the current position, the fund could gain at least 4% over the next 27 trading days if not sooner.
All forecasts are based on analysis of past behavior. Prior movements are not always indicative of future movement. Develop the theory, test the theory. Do your own research. Nothing in this analysis constitutes advice. YouTube For More. Good luck!!