Aspen Technology (AZPN) shares under being placed under the lens today as the Twiggs Money Flow indicator, or TMF has climbed above the zero line, indicating bullish momentum. Twiggs Money Flow Index is a technical indicator created by Collin Twiggs. It is derived from Chaikin Money Flow Index but uses true ranges instead of highs minus lows to prevent spikes due to gaps. It is also using a smoothing exponential moving average to prevent volume spikes to alter results. The exponential moving average is the one described by Welles Wilder for many of his indicators.
When Twiggs Money Flow Index moves above 0, players are accumulating and thus prices are subject to climb higher. When Twiggs Money Flow Index is below 0, players are distributing and prices are more subject to move lower. Divergences of Twiggs Money Flow Index indicator with prices give also solid signals.
With most major indexes showing strength, it is safe to assume that many investors may have their heads in the clouds. With many stocks frequently hitting new milestone highs, investors may be scrambling to make sure that they aren’t missing out on possible returns. Maybe some stocks have been doing well, but others not in the portfolio have been doing much better. There is rarely any substitute for hard work and dedication. Investors may get complacent with stocks that they are familiar with. Branching out into uncharted waters may help broaden the horizon and start the gears grinding for new trading ideas. Traders and investors will no doubt be closely monitoring the markets as we move into the second half of the year. It remains to be seen whether optimism or pessimism will rule going in to the next round of quarterly earnings reporting.
A commonly used tool among technical stock analysts is the moving average. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a certain period of time. Moving averages can be very helpful for identifying peaks and troughs. They may also be used to assist the trader figure out proper support and resistance levels for the stock. Currently, the 200-day MA for Aspen Technology (AZPN) is sitting at 99.51. The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of stock price movements. The RSI was developed by J. Welles Wilder, and it oscillates between 0 and 100. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. RSI can be used to detect general trends as well as finding divergences and failure swings. The 14-day RSI is presently standing at 59.80, the 7-day is 49.74, and the 3-day is resting at 38.65.
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Aspen Technology (AZPN)’s Williams Percent Range or 14 day Williams %R is currently sitting at -55.93. In general, if the reading goes above -20, the stock may be considered to be overbought. Alternately, if the indicator goes under -80, this may show the stock as being oversold.
We can also take a look at the Average Directional Index or ADX of Aspen Technology (AZPN). The ADX is used to measure trend strength. ADX calculations are made based on the moving average price range expansion over a specified amount of time. ADX is charted as a line with values ranging from 0 to 100. The indicator is non-directional meaning that it gauges trend strength whether the stock price is trending higher or lower. The 14-day ADX presently sits at 32.61. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would indicate a very strong trend, and a value of 75-100 would signify an extremely strong trend. At the time of writing, the 14-day Commodity Channel Index (CCI) is -61.89. Developed by Donald Lambert, the CCI is a versatile tool that may be used to help spot an emerging trend or provide warning of extreme conditions. CCI generally measures the current price relative to the average price level over a specific time period. CCI is relatively high when prices are much higher than average, and relatively low when prices are much lower than the average.
Investors may be trying to decide if the current market environment remains bullish. It can be extremely difficult to decide when to sell, especially when data seems positive and most signs are pointing higher. Jumping in to buy stocks on a pullback may seem like a good idea, but following specific sectors may become increasingly more important. Following long-term trends may help the investor see the bigger picture of what has been going on with a specific stock or sector. Deciding to sell a winner after a big run can be tempting, but knowing the underlying causes for the run may help identify if there may indeed be more room for gains. Avoiding common investing pitfalls may take many years to master, but it may end up determining long-term success.
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