Magellan Financial Group (MFG.AX) are on trader’s watchlists today as the shares have moved below a key Mass Index level of 26.5. When Donald Dorsey developed the Mass Index indicator, his rationale was that if the prevailing trend were going to change, the price range would have to widen. Dorsey looked for “reversal bulges” to signal a trend reversal. According to Dorsey, a bulge occurs when the Mass Index moves above 27. This initial bulge does not complete the signal though. Dorsey waited for this bulge to reverse with a move back below 26.50. Once the reversal bulge is complete, traders should use other analysis techniques to determine the direction of the next move.
In terms of moving averages for Magellan Financial Group (MFG.AX), the 200-day is currently at 25.26, the 50-day is 26.68, and the 7-day is resting at 26.79. The moving average is a popular investing tool among traders. Moving averages can be used to help filter out the day to day noise created by other factors. MA’s may be used to identify uptrends or downtrends, and they can be a prominent indicator for detecting a change in momentum for a particular stock. Many traders will use moving averages for different periods of time in conjunction with other indicators to help gauge future stock price action.
Traders may also be paying close attention to RSI levels on shares of Magellan Financial Group (MFG.AX). The current 14-day RSI is presently sitting at 51.99, the 7-day is 53.00, and the 3-day is 47.86. The RSI, or Relative Strength Index is a popular oscillating indicator among traders and investors. The RSI operates in a range-bound area with values between 0 and 100. When the RSI line moves up, the stock may be experiencing strength. The opposite is the case when the RSI line is heading lower. Different time periods may be used when using the RSI indicator. The RSI may be more volatile using a shorter period of time. Many traders keep an eye on the 30 and 70 marks on the RSI scale. A move above 70 is widely considered to show the stock as overbought, and a move below 30 would indicate that the stock may be oversold. Traders may use these levels to help identify stock price reversals.
When completing stock analysis, investors and traders may opt to review other technical levels. Magellan Financial Group (MFG.AX) currently has a 14-day Commodity Channel Index (CCI) of 82.28. Investors and traders may use this indicator to help spot price reversals, price extremes, and the strength of a trend. Many investors will use the CCI in conjunction with other indicators when evaluating a trade. The CCI may be used to spot if a stock is entering overbought (+100) and oversold (-100) territory. The Average Directional Index or ADX is often considered to be an important tool for technical trading or investing. The ADX is a technical indicator developed by J. Welles Wilder used to determine the strength of a trend. The ADX is often used along with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of the trend. Presently, the 14-day ADX is resting at 10.71.
Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would signal a very strong trend, and a value of 75-100 would indicate an extremely strong trend.
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