The Mass Index Volatility reading for Hiscox Ltd (HSX.L) has dropped below 26.5, indicating a potential move is ahead for the shares. The Mass Index is a volatility indicator developed by Donald Dorsey and discussed in the June 1992 issue of Technical Analysis of Stocks & Commodities. By analyzing the narrowing and widening of trading ranges, the indicator identifies potential reversals based on market patterns that aren’t often considered by technical analysts largely focused on singular price and volume movements. The Mass Index indicator uses the difference between the high and low in a given interval to spot potential price reversals. The main assumption is that prices tend to reverse when ranges widen beyond historical averages. Since this difference is constantly changing (ranges are always widening and narrowing), traders can use the Mass Index to generate trade signals, which occur when the index line (typically 25 periods) moves above 27 and then drops below 26.5.
At some point, individual investors may find themselves routinely falling prey to the lure of performance chasing. It can be highly tempting to want to be a part of a near-term stock run to the upside. Short-term investors may only be interested in these types of moves, but longer-term investors may want to be a bit more cautious. Chasing performance may end up leading the investor away from previously defined goals and the overall strategy. Investors who are committed to achieving long-term success may occasionally need to reshuffle the deck when the short-term clatter becomes too noisy.
In terms of moving averages for Hiscox Ltd (HSX.L), the 200-day is currently at 1599.64, the 50-day is 1684.84, and the 7-day is resting at 1589.86. 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 Hiscox Ltd (HSX.L). The current 14-day RSI is presently sitting at 35.27, the 7-day is 36.03, and the 3-day is 34.38. 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. Hiscox Ltd (HSX.L) currently has a 14-day Commodity Channel Index (CCI) of -19.50. 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 34.15.
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.
Investors might be trying to figure out an investment plan that is right for them. Some may opt to go with a short-term plan, and others may choose to invest in stocks for the long haul. The thought of creating a defined plan may be overwhelming to some. Comparing the plusses and minuses of both may be a good way to start forming a strategy. Investing for the short-term may offer chances to capitalize on gains over a few weeks or months. There may be more fluctuations to deal with in the short-term, but the rewards may be greater if managed properly. One drawback of investing for the short-term is that it may involve more risk. The element of correct timing comes into play when trying to enter or exit a position, which may not be for everyone. Investing for the long-term may be a safer way to go as investors are typically looking for smaller gains over a longer period of time.
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