What Are the Technicals Telling Us About RWE AG (RWE.DE)?

RWE AG (RWE.DE)’s closing price of $23.47 has closed above it’s Parabolic SAR reading, indicating a potential trend reversal.  

Parabolic SAR (or PSAR) is a simple, compact indicator that can provide some useful information when taking into account additional trends and factors. It is not typically recommended, however to use it as a stand-alone to generate trading signals. Since it is time and price based it is not adept at measuring the actual strength of a trend, merely its direction and duration. It is a good idea to use it in conjunction with additional indicators that can help determine the trend’s strength. 

As we move into the second half of the year, investors may be focused on portfolio performance over the first part of the year. They may be trying to put all the pieces together in order to create a solid plan that will provide sustained profits, even if market conditions deteriorate. This may involve introducing more diversity into the portfolio. One investor may evaluate a stock completely different than another. It may be important to do the necessary research on the overall industry when searching for the next big winner. As the next round of earnings reporting gets underway, investors will be watching to see which companies are positioned for growth over the foreseeable future. Investors will optimally have all their requisite boxes checked when scouting out the next portfolio moves.

At the time of writing, RWE AG (RWE.DE) has a 14-day Commodity Channel Index (CCI) of 143.54. Originally developed by Donald Lambert, the CCI was created to identify long-term changes in trends, but it has been used by traders for different time periods. The CCI may be used for multiple purposes, but a popular use is to spot overbought/oversold conditions.

The 14-day ADX for RWE AG (RWE.DE) is currently sitting at 28.61. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would signal a very strong trend, and a value of 75-100 would indicate an extremely strong trend. The ADX is a technical indicator developed by J. Welles Wilder used to determine the strength of a trend. The ADX is often used along with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of the trend.

Moving average indicators are used widely for stock analysis. Many traders will use a combination of moving averages with different time frames to help review stock trend direction. One of the more popular combinations is to use the 50-day and 200-day moving averages. Investors may use the 200-day MA to help smooth out the data a get a clearer long-term picture. They may look to the 50-day or 20-day to get a better grasp of what is going on with the stock in the near-term. Narrowing in on Moving Averages, the 200-day for RWE AG (RWE.DE) is at 20.26, the 50-day is 22.33, and the 7-day is resting at 22.75. The RSI is computed based on the speed and direction of a stock’s price movement. The RSI is considered to be an internal strength indicator, not to be confused with relative strength which is compared to other stocks and indices. The RSI value will always move between 0 and 100. One of the most popular time frames using RSI is the 14-day. The 14-day RSI is presently standing at 65.22, the 7-day sits at 74.41, and the 3-day is resting at 79.76.

Investors may be watching other technical indicators such as 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. RWE AG (RWE.DE)’s Williams %R presently stands at -11.46. 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.

Traders may be looking to capitalize on market trends as we move into the second part of the calendar year. Closely following the technicals might help make sense of current market conditions. Investors may choose to follow many different technical signals, or they may have picked a few popular ones to dedicate themselves to. Whatever the strategy, staying in tune with fundamentals and meaningful economic data may also prove to be highly beneficial. Coming at the equity market from multiple angles may help supply the investor with alternate perspectives that could play a vital role in the next couple of quarters.  

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