Investors have placed Zogenix Inc (ZGNX) shares on watch as the Aroon Up indicator has moved above 70, indicating that there is strong upward momentum building for the shares.
If Aroon-Up crosses above Aroon-Down to the upside, it signals the beginning of a potential uptrend. When the Aroon-Up line hits 100, price action is making new highs. If Aroon-Up then remains stable between 70 – 100, while Aroon-Down remains between 0 – 30, it signals confirmation of an uptrend.
The Aroon indicator was developed by Tushar Chande in 1995. Aroon is used to measure the presence and strength of trends. According to Chande, whenever the components of the Aroon indicator are in close proximity, this is a sign of market consolidation. Aroon Up measures the uptrend, and Aroon Down measures the downtrend. When Aroon Up or Aroon Down values drop below 50, this indicates loss of upward and downside momentum respectively. Values above 70 are signs of a strong trend for either component, while values that are less than 30 show that primary trend is weakening and opposing trend is picking up.
Traders might be paying extra attention to the technicals as they look to spot buying opportunities in the stock market. Because there are so many different strategies that traders can use, it may be difficult to pinpoint the correct avenue. New traders might choose to focus on one or two main indicators when just starting out. With time and experience, many traders will use a combination of various indicators when setting up their persona charts. It may be wise for traders to remember that what has worked for someone else in the past may not work for them in the future.
Investors may also be looking to compare the current stock price of Zogenix Inc (ZGNX) to some of its moving averages. After a recent check, the 200-day MA is resting at 43.24, and the 50-day is 40.78. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific period of time. Moving averages can be very useful for identifying peaks and troughs. They may also be used to help the trader figure out proper support and resistance levels for the stock.
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The 14-day ADX for Zogenix Inc (ZGNX) is currently at 33.55. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would signify a very strong trend, and a value of 75-100 would point to an extremely strong trend. Checking in on some other technical levels, the 14-day RSI is currently at 66.48, the 7-day stands at 62.07, and the 3-day is sitting at 26.70. 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.
Investors are generally searching for a stock market strategy that not only maximizes returns, but helps them build a portfolio that is set up to achieve long lasting success. New investors may find themselves overwhelmed by the day to day workings of the market. Understanding that markets are volatile and will sometimes be down for extended periods is just another part of the investing process. Having the proper stock portfolio diversification can be a big help when trying to combat volatile markets.
At the time of writing, Zogenix Inc (ZGNX) has a 14-day Commodity Channel Index (CCI) of 26.34. 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 watching other technical indicators such as the Williams Percent Range or Williams %R. The Williams %R is a momentum indicator that helps measure oversold and overbought levels. This indicator compares the closing price of a stock in relation to the highs and lows over a certain time period. A common look back period is 14 days. Zogenix Inc (ZGNX)’s Williams %R presently stands at -19.73. The Williams %R oscillates in a range from 0 to -100. A reading between 0 and -20 would indicate an overbought situation. A reading from -80 to -100 would indicate an oversold situation.
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