There are plenty of technical indicators that traders can choose to follow. With so many different signals to follow, traders may choose to focus on a small number of indicators to start. Many technical analysts will use a combination of different signals in order to help identify the best entry and exit points of a trade. Becoming a master at spotting trends and creating charts may seem impossible for the novice investor. Taking the time to fully understand the methods behind the indicators may help the trader with trying to sort everything out. Studying up on the theory behind some of the more popular indicators may help the trader understand exactly what they are doing when setting up their charts.
Conducting technical analysis of the stock may include following the Keltner Channel indicator. A recent check shows the 20 day lower band at 125.904884 and the 20 day upper band at 133.12732 for Caterpillar Inc. (NYSE:CAT). During a clearly defined trend, a break above or below these levels may point to the underlying strength of the trend. A break above the upper band may signal continuing bullish trend strength, and a break below the lower band may signal continuing bearish trend strength.
The SMA or Simple Moving Average can be calculated for different time periods. The SMA helps smooth out volatility and makes it a bit less difficult to gauge the price trend of a stock. Let’s view some popular SMA levels below for Caterpillar Inc. (NYSE:CAT):
Simple Moving Average 20 day: 128.5491
Simple Moving Average 100 day: 133.47656
Simple Moving Average 10 day132.047
Simple Moving Average 50 day: 127.613686
Simple Moving Average 30 day: 127.89124
Simple Moving Average 200 day: 137.48633
Investors tracking shares of Caterpillar Inc. (NYSE:CAT) will note that since the stock opened at 125.77, shares have seen a change of 2.6. During that period, the stock has touched a low of 125.48 and tipped a high of 128.69. Volume on the day is presently 1605172.
The 20 day Chaikin Money Flow indicator is currently 0.021936547. This indicator was developed by Marc Chaikin who observed that the pressures of buying and selling could be figured out by where a period finishes relative to the range of highs and lows.
Traders may use a variety of moving average indicators when examining a particular stock. Checking on some Exponential Moving Averages, we note that the 200 day is 136.1062, the 100 day is 131.83807, and the 50 day is 129.07358. Zooming in closer, we note that the 30 day EMA is 128.91925, the 20 day is 129.5161, and the 10 day is noted at 130.33612.
Traders might be keeping tabs on the Hull Moving Average. The current HMA reading is 126.39933. Traders may use the HMA to help identify the prevalent market trend. This may also lend to spotting useful exit and entry points on the stock.
Investors will typically be keeping track of historical highs and lows for a particular stock that they are researching. Watching levels for Caterpillar Inc. (NYSE:CAT, we can see that the all time high is currently 173.24, and the all time low is 2.520846. Let’s look at some alternate high/low price data:
Six month low: 112.06
Six month high: 159.37
One year low: 112.06
One year high: 173.24
Three month low: 112.06
Three month high: 159.37
One month low: 121.23
One month high: 142.41
Strictly technical traders typically don’t pay a whole lot of attention to fundamental factors such as value, competition, or company management. Technical analysts want to figure out trends based on indicators, charts, and prior price data. These types of traders are usually highly active and hold positions for short periods of time in order to capitalize on short-term price fluctuations. Active traders may be quick to unload a position if it does not pan out as expected. Technicians often pay a great deal of attention to support and resistance levels. These are levels where traders believe a specific stock will either see a bounce or a pullback.