Pollard Banknote Limited (TSX:PBL) saw a bid of $14.25 in the latest session. This represents a move of -0.07%, but current price levels still put the share above the rising trendline.
Trends are a fundamental principle of markets. Trendlines are often used to measure and identify these trends. These lines are represented by a sloping line that is drawn between two or more prominent points on a chart, where rising trends are drawn between two or more troughs to identify price support and falling trendlines are drawn between two or more peaks to identify price resistance.
The idea is that a trend, once established, will remain until it is broken, at least it does on the simplest level. The point of this is to identify entry and exit points for investors. This allows investors to act on hard facts, such as selling when a certain trendline is broken, instead of relying on guesswork and gut instinct.
Another useful tool for looking at a stock is the Williams Percentage Range. The Williams %R, developed by Larry Williams, is used to identify stocks that are overbought or oversold on the market. It does this by comparing previous high and lows over a specified period. If the value is below -80 it indicates that the stock is oversold, whereas a stock going above -20 may indicate the stock is overbought. Pollard currently has a 14 day Williams %R of -78.87, putting it on the cusp of being considered ‘oversold’.
We can also look at the Relative Strength Index. Developed by J. Welles Wilder, the RSI is used as a momentum oscillator that can measure speed and change of stock price movements. The RSI operates within a set range, from 0 – 100, with numbers near 100 indicating strong momentum and numbers around 0 indicating weak momentum. Pollard currently has a 3 day RSI of 17.70, a 7 day RSI of 40.33, and a 14 day RSI of 54.29.
The Commodity Channel Index, developed by Donald Lambert, is an indicator that can be used to identify overbought or oversold scenarios. Pollard currently has a 14 day CCI of -131.58.
The Average Directional Index is typically used in conjunction with the Plus Directional Indicator and the Minus Directional Indicator to measure direction and strength of a trend. A rating of 0-20 would indicate no trend, 20-25 would indicate no clear trend, and 25+ would indicate a strong trend with increasing strength as the number increases. Pollard currently has a 14 day ADX of 23.70, implying an unclear trend.
Finally, we can take a look at Moving Averages. MAs are the average of a stock’s price over a given period of time. They are useful for charting long term progress of a stock and can be helpful in filtering out the daily noise of price fluctuations. Pollard currently has a 7 day MA of $14.42, a 50 day MA of $13.25, and a 200 day MA of $10.40.
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