Taking a Deeper Look into the Moving Average For Truscott Mining Corporation Ltd (TRM.AX)

Truscott Mining Corporation Ltd (TRM.AX) are in focus today as the charts are revealing that the Mesa Adaptive Moving Average (MAMA) has trickled below the FAMA, or Fractional Moving Average.  This environment typically indicates that there might be a buying opportunity aligning in technicals.  When there are crossovers between the FAMA and MAMA, the shares are often widely traded.  When the MAMA crosses above the FAMA, it means that the shares are likely to move higher.  Conversely the opposite occurs when the MAMA crosses below the FAMA.  The Mesa Moving Average was first mentioned by John Ehlers in a paper published in a 2001 edition of Technical Analysis of Stocks and Commodities Magazine.  The below was excerpted from the publication,

“The MESA Adaptive Moving Average (MAMA) adapts to price movement based on the rate of change of phase as measured by the Hilbert Transform Discriminator (Technical Analysis of Stocks and Commodities magazine, December 2000). This method features a fast attack average and a slow decay average so that composite average rapidly ratchets behind price changes and holds the average value until the next ratchet occurs.”

As we move into the second half of the year, investors may be focused on portfolio performance over the first part of the year. They may be trying to put all the pieces together in order to create a solid plan that will provide sustained profits, even if market conditions deteriorate. This may involve introducing more diversity into the portfolio. One investor may evaluate a stock completely different than another. It may be important to do the necessary research on the overall industry when searching for the next big winner. As the next round of earnings reporting gets underway, investors will be watching to see which companies are positioned for growth over the foreseeable future. Investors will optimally have all their requisite boxes checked when scouting out the next portfolio moves.

Traders may be also be focusing in on the ATR or Average True Range indicator when performing stock analysis. At the time of writing, Truscott Mining Corporation Ltd (TRM.AX) has a 14-day ATR of 0.00. The average true range indicator was developed by J. Welles Wilder in order to measure volatility. The ATR may assist traders with figuring out the strength of a breakout or reversal in price. It is important to note that the ATR was not designed to determine price direction or to predict future prices.

Currently, the 14-day ADX for Truscott Mining Corporation Ltd (TRM.AX) is sitting at 24.44. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would identify a very strong trend, and a value of 75-100 would lead to an extremely strong trend. ADX is used to gauge trend strength but not trend direction. Traders often add the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of a trend.

Checking in on some other technical levels, the 14-day RSI is currently at 44.26, the 7-day stands at 38.64, and the 3-day is sitting at 22.86. Many investors look to the Relative Strength Index (RSI) reading of a particular stock to help identify overbought/oversold conditions. The RSI was developed by J. Welles Wilder in the late 1970’s. Wilder laid out the foundation for future technical analysts to further investigate the RSI and its relationship to underlying price movements. Since its inception, RSI has remained very popular with traders and investors. Other technical analysts have built upon the work of Wilder. The 14-day RSI is still a widely popular choice among technical stock analysts.

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. Truscott Mining Corporation Ltd (TRM.AX)’s Williams %R presently stands at -100.00. 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.

Taking a closer look from a technical standpoint, Truscott Mining Corporation Ltd (TRM.AX) presently has a 14-day Commodity Channel Index (CCI) of -35.90. Typically, the CCI oscillates above and below a zero line. Normal oscillations tend to stay in the range of -100 to +100. A CCI reading of +100 may represent overbought conditions, while readings near -100 may indicate oversold territory. Although the CCI indicator was developed for commodities, it has become a popular tool for equity evaluation as well.

Traders may be looking to capitalize on market trends as we move into the second part of the calendar year. Closely following the technicals might help make sense of current market conditions. Investors may choose to follow many different technical signals, or they may have picked a few popular ones to dedicate themselves to. Whatever the strategy, staying in tune with fundamentals and meaningful economic data may also prove to be highly beneficial. Coming at the equity market from multiple angles may help supply the investor with alternate perspectives that could play a vital role in the next couple of quarters.