Investors are delving into the details on shares of K&C REIT Plc (KCR.L). The share price has felt recent pressure moving past the Stochtastic Momentum Index of -40, indicating possible oversold territory.
The Stochastic Momentum Index, or SMI, is a more refined version of the original stochastic oscillator, employing a wider range of values and having a higher sensitivity to closing prices. The Stochastic Momentum Index (SMI) indicator was developed by William Blau and is based on the Stochastic indicator. The Stochastic oscillator is calculated using the close price relative to the high low trading range, whereas the Stochastic Momentum Index indicator is calculated using the close price relative to the midpoint of the high low trading range. The most common method of using SMI is to look for buy trades when the SMI falls under -40 and then rises back above through -40. Sell trades are looked for when the SMI rises above +40 and then falls back below +40.
With most types of investments, there is typically some level of risk. This is no different when dealing with the stock market. Investors have to decide how much risk is acceptable and plan accordingly. Many new stock market investors face the challenge of deciding where to begin. Following strategies that have proven to work in the past may be one way to go. Many investors will look to mimic the strategies of the most celebrated investors. Although this may be a good way to start, it may be necessary to fully understand every aspect that those successful investors examine. Blindly following trading plans without doing the proper research can lead to future trouble down the line if there is indeed a market shake-up.
In terms of Relative Strength Index for K&C REIT Plc (KCR.L), the 14-day RSI is currently noted at 28.01, the 7-day is 24.56, and the 3-day is sitting at 18.93. The Relative Strength Index (RSI) is a very popular momentum indicator used for technical analysis. The RSI can help show whether the bulls or the bears are currently strongest in the market. The RSI may be used to help spot points of reversals more accurately. The RSI was developed by J. Welles Wilder. As a general rule, an RSI reading over 70 would signal overbought conditions. A reading under 30 would indicate oversold conditions.
In terms of CCI levels, K&C REIT Plc (KCR.L) currently has a 14-day Commodity Channel Index (CCI) of -140.11. 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 14-day ADX is presently 34.00. Many technical chart analysts believe that an ADX reading over 25 would suggest a strong trend. A level under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal. The ADX is typically plotted along with two other directional movement indicator lines, the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI). Some analysts believe that the ADX is one of the best trend strength indicators available.
Investors may be studying other technical indicators like 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. K&C REIT Plc (KCR.L)’s Williams %R presently stands at -88.86. 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. Looking at some moving average levels, the 200-day is at 73.76, the 50-day is 74.40, and the 7-day is sitting at 57.94. Moving averages can help identify trends and price reversals. They may also be used to help spot support and resistance levels. Moving averages are considered to be lagging indicators meaning that they confirm trends. A certain stock may be considered to be on an uptrend if trading above a moving average and the average is sloping upward. On the other side, a stock may be considered to be in a downtrend if trading below the moving average and sloping downward.
One of the biggest downfalls of the individual investor is not being able to take losses when it becomes necessary. Of course nobody wants to take a loss, but the repercussions of not letting go of a losing stock can end up sealing the demise of the well-intentioned investor. Many professionals would probably agree that the pain of realizing a loss is more intense than the joy of picking a winner. Investors who become reluctant to sell losers may be delaying the inevitable and essentially suffocating the portfolio. Not addressing the losing side can have severe negative effects on the long-term health of the portfolio. Investors may have to find a way to face the music and sell when they realize that a trade has gone sour.