Shares of iShares Canadian Government Bond Index ETF (XGB.TO) have seen the Mesa Adaptive Moving Average (MAMA) climb above the Fractional Moving Average or FAMA. The crossing of the MAMA and FAMA lines can be used to generate Buy and Sell signals. When the MAMA crosses above the FAMA a buy signal is given. Alternatively, when the MAMA crosses below the FAMA a sell signal is given.The MESA Adaptive Moving Average is a technical trend-following indicator which adapts to price movement “based on the rate change of phase as measured by the Hilbert Transform Discriminator”. This method of adaptation features a fast and a slow moving average so that the composite moving average swiftly responds to price changes and holds the average value until the next bar’s close. The Averages act as support and resistance areas and the price will tend to react to them. This makes pullbacks to the MAMA and FAMA suitable with-trend entry areas. As with most technical indicators, the MAMA is best used in conjuction with additional signals.
Most investors are aware that not all stocks will be performing well at the same time. Different stocks may have alternate reactions to various economic factors, world events, and business happenings. When one stock is up, another one might be on the way down. Keeping the portfolio full of names from different sectors can help offset imbalances when one stock or sector may be performing poorly while another stock or sector is doing well. Diversification is typically recommended with all types of investing. Many factors may come into play when trying to pick the right stocks to own. Investors may want to figure out how much they are willing to risk, and what kinds of returns they are looking for. Many beginner investors may not be comfortable picking stocks on their own. Seeking professional advice may be one avenue to pursue, but it is usually a good idea to know exactly what holdings are in the portfolio at all times, as markets can move quickly and without notice.
Tracking moving averages is one of the most universally used techniques for performing technical stock analysis. Checking on some basic levels for iShares Canadian Government Bond Index ETF (XGB.TO), the 50-day Moving Average is currently 21.63, the 200-day Moving Average is 21.75, and the 7-day is standing at 21.55. Moving averages use a series of historical data combined with the current stock price for calculation. Traders may find value in combining multiple time periods using moving averages to help compare how the equity is faring on a long-term and short-term basis. Many investors may use MA’s as a way to develop support and resistance levels in order to spot specific trade entries and exits.
Traders may also be paying close attention to RSI levels on shares of iShares Canadian Government Bond Index ETF (XGB.TO). The current 14-day RSI is presently sitting at 46.20, the 7-day is 44.75, and the 3-day is 30.20. 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. iShares Canadian Government Bond Index ETF (XGB.TO) currently has a 14-day Commodity Channel Index (CCI) of -110.69. 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 15.29.
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.