Shares of Finisar Corporation (FNSR) have seen the volume moving average (VMA) climb over the past seven sessions. The stock recently touched 22.98, or a change of -0.31 from the most recent open.
The direction of stock market moves in the short-term are highly unpredictable. Many investors will be tempted to ride the wave whether the trend is buying or selling. Fearful investors may make hasty decisions such as panic buying or selling. Investors may feel compelled to buy stocks after a major run higher. This can be related to the fear or missing out. On the other end, investors may be quick to sell quality stocks when the market is in the midst of a broad sell-off. This behavior often translates into falling into the trap of buying high and selling low.
Looking at the current landscape of the equity market, investors may be doing some bargain hunting for stocks to add to the portfolio. Many sharp investors will welcome temporary market dips which may provide plenty of buying opportunities. Being prepared for these types of opportunities can help the investor make quick decisions in the midst of a downturn. As we move closer to the close of the year, investors will be closely watching the next round of company earnings reports. Even if the individual investor chooses to trade conservatively during earnings, they can still do the necessary research and have stocks lined up to purchase when the time is right.
A longer period VMA (aka Slow VMA – a larger number for the period) is often used to highlight long-term surges in volume. Significant volume surges sometimes precede long-term trend reversals. A shorter-period VMA (aka Fast VMA – a smaller number for the period) is often used to highlight short-term volume surges, which may precede short-term trend reversals. Watch out when selecting your period for your VMA to avoid setting your period too high or too low, as the volume will either be smoothed out too much or be too erratic for practical use.
Turning to technicals, shares of Finisar Corporation (FNSR) have a 200-day moving average of 22.81. The 50-day is 22.98, and the 7-day is sitting at 22.97. Using a wider time frame to assess the moving average such as the 200-day, may help block out the noise and chaos that is often caused by daily price fluctuations. In some cases, MA’s may be used as strong reference points for spotting support and resistance levels. Employing the use of the moving average for technical equity analysis is still highly popular among traders and investors. The moving average can be used as a reference point to assist with the discovery of buying and selling opportunities.
Finisar Corporation (FNSR)’s Williams Percent Range or 14 day Williams %R currently sits at -32.64. The Williams %R oscillates in a range from 0 to -100. A reading between 0 and -20 would point to an overbought situation. A reading from -80 to -100 would signal an oversold situation. The Williams %R was developed by Larry Williams. This is a momentum indicator that is the inverse of the Fast Stochastic Oscillator.
Finisar Corporation (FNSR) currently has a 14-day Commodity Channel Index (CCI) of 116.44. Active investors may choose to use this technical indicator as a stock evaluation tool. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. On the flip side, a reading below -100 may signal a downtrend reflecting weak price action. Using the CCI as a leading indicator, technical analysts may use a +100 reading as an overbought signal and a -100 reading as an oversold indicator, suggesting a trend reversal.
Currently, the 14-day ADX for Finisar Corporation (FNSR) is sitting at 17.11. 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.
The RSI, or Relative Strength Index, is a widely used technical momentum indicator that compares price movement over time. The RSI was created by J. Welles Wilder who was striving to measure whether or not a stock was overbought or oversold. The RSI may be useful for spotting abnormal price activity and volatility. The RSI oscillates on a scale from 0 to 100. The normal reading of a stock will fall in the range of 30 to 70. A reading over 70 would indicate that the stock is overbought, and possibly overvalued. A reading under 30 may indicate that the stock is oversold, and possibly undervalued. After a recent check, the 14-day RSI is currently at 52.67, the 7-day stands at 54.42, and the 3-day is sitting at 45.88.
New traders may face many challenges when entering the stock market. One of the bigger challenges involves not repeating mistakes. As with any new endeavor, there will be a learning curve. Paying attention to historical trades can help the trader figure out where they might have gone astray. Repeating the same mistakes over and over again can lead to the demise of the trader’s confidence and hard earned money. Traders who are able to move forward and learn from previous errors may find themselves making much better decisions in the future.
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