RIMM Technicals - Oct 13

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VDSI Technicals - Strong Uptrend

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(Chart with indicators from StockCharts, all inferences my own)

1. CMF (Chaikin Money Flow) Indicates security has been in accumulation stage for the majority for the last 4 months. Constant buying pressure has been boosting the stock price causing the strong uptrend. The Chaikin Money Flow oscillator generates bullish signals by indicating that a security is under accumulation. There are three factors that determine if a security is under accumulation.

• The first and most obvious factor is whether the Chaikin Money Flow value is greater than zeroIt is an indication of buying pressure and accumulation when the indicator is positive.


• The second factor is the duration of the reading, how long the oscillator has been positive. The longer the oscillator remains above zero, the more evidence there is that the security is under sustained accumulation. Extended periods of accumulation or buying pressure are bullish, and they indicate that sentiment towards the security remains positive.
  The third factor is the intensity of the oscillator. Not only should the oscillator remain above zero, but it should also be able to increase and attain a certain level.
  
• A reading above .25 would be an indication of strong buying pressure. You should consider prior levels of the indicator to be sure.
  

2. The fifth time (in 4 months) the MACD (Moving Average Convergence Divergence) has crossed the trigger line in a bullish manner.

Click here to learn about the MACD Momentum indictor

3. ADX evaluates the strength of the current trend. A rising ADX that crosses 40 is an indicator of a strong trend. Current ADS of 37.19 that has risen sharply since September combined with strong uptrend in security confirms strength of uptrend.

4. Security has been moving up so fast EMA (Exponential Moving Average) lines has been running parallel to each other (longer term MA's attempting to catch up with shorter term MA's, which in turn are struggling to catch up with the security). In other words, very positive :)

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5. Both the Accumulation/Distribution line and OBV have increased sharply since August with a similar increase in security price further indicating STRONG buyind pressure. The A/D line measures the volume of money flowing in (accumulation) and out (distribution) of a security. It is calculated as follows

CLV = Closing Location Value which measures the location of the close of stock relative to trading range for that period. Assumption is that security is under accumulation when it closes higher. The CLV is then multiplied with the corresponding period's volukme to form the A/D line.

For my research on VDSI Fundamentals click here

RIMM Technicals - overbought ?

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• RSI (Relative Strength Index) is a momentum oscillator that compares the magnitude of a stock's recent gains to the magnitude of its recent losses to provide overbought and oversold signals. Recommended levels are 70 for overbought and 30 for oversold.


• Williams %R is a momentum indicator that also attempts to measure overbought and and oversold levels on a scale that ranges from 0 to -100. 0 to - 20 can be considered overbought and -80 to -100 oversold. It shows the relationship of the close relatrive to the high-low rangfe over a set period of time. The nearer the close is to the top of the range, the nearer to zero (higher) the indicator will be. Vice versa for nearer the close is to the bottom of the range.


• %R = [(highest high over ? periods - close)/(highest high over ? periods - lowest low over ? periods)] * -100


• Money Flow Index (MFI) is a momentum indicator similar to RSI, it is more volume-weighted and a good measure of strength of money flowing in and out of security. It compares "positive money flow" to "negative money flow" to create an indicator that can be compared to price in oder to identify strength or weakness of a trend.


• Money Flow = Typical Price X Volume


• Money Ratio = Positive Money Flow / Negative Money Flow


• Money Flow Index = 100 - (100/(1+Money Ratio))
  

For more information on Technical Indicators, http://www.stockcharts.com/