Ravi Kumar Distilleries Limited (RKDL.NS) are being monitored this week as the Schaff Trend Cycle levels have shown a consistent downtrend over the course of the past 5 trading sessions. If the levels breach the key 30 level, a market reversal will be likely, according to this signal.
The Schaff indicator, created by Doug Schaff in 2008, behaves in a way like an oscillator, identifying overbought and oversold conditions in the market. These scenarios are then used to trade price reversals. A modification of the simple overbought or oversold trade setup is the addition of the 100-period exponential moving average, which is used by institutional traders as a very powerful support-resistance tool. The Stochastics oscillator is used to add confirmation to the trade entry.
Oversold values are 0 to 20 and investors might look to buy dips in up trends when the signal line crosses up from below 20 to above 20. Overbought values are 70 to 100 and investors might look to sell rallies in downtrends when the signal line crosses down from above 80 to below 80.
Taking a deeper look into the technicals, at the time of writing, the 14-day ADX for Ravi Kumar Distilleries Limited (RKDL.NS) is standing at 34.00. Many chart analysts believe that an ADX reading over 25 would suggest a strong trend. A reading under 20 would suggest no trend, and a reading from 20-25 would suggest that there is no clear trend signal.
What Is ADX?
The Average Directional Index or ADX. The ADX was created by J. Welles Wilder to help determine how strong a trend is. In general, a rising ADX line means that an existing trend is gaining strength. The opposite would be the case for a falling ADX line.
When getting into the markets, most investors realize that riskier stocks may have an increased potential for higher returns. If investors decide to take a chance on some of these stocks, they may want to employ some standard techniques to help manage that risk. This may involve creating a diversified stock portfolio. Mixing up the portfolio with stocks from different sectors, market caps, and growth potential, may be the right move. In general, the goal is to maximize returns in accordance with the individual’s specific risk profile. It should be obvious that no matter how well rounded the portfolio is, there are always risks in the equity markets. Having a sound plan before investing can help ease the burden of knowing that markets can sometimes do crazy things without any rhyme or reason.
Looking further at additional technical indicators we can see that the 14-day Commodity Channel Index (CCI) for Ravi Kumar Distilleries Limited (RKDL.NS) is sitting at 85.00. CCI is an indicator used in technical analysis that was designed by Donald Lambert. Although it was originally intended for commodity traders to help identify the start and finish of market trends, it is frequently used to analyze stocks as well. A CCI reading closer to +100 may indicate more buying (possibly overbought) and a reading closer to -100 may indicate more selling (possibly oversold).
Moving averages can help spot trends and price reversals. They may also be used to help find support or resistance levels. Moving averages are considered to be lagging indicators meaning that they confirm trends. A certain stock may be considered to be on an uptrend if trading above a moving average and the average is sloping upward. On the other side, a stock may be considered to be in a downtrend if trading below the moving average and sloping downward. Shares of Ravi Kumar Distilleries Limited (RKDL.NS) have a 7-day moving average of 12.99. Taking a glance at the relative strength indictor, we note that the 14-day RSI is currently at 68.01, the 7-day stands at 72.15, and the 3-day is sitting at 74.47.
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of stock price movements. The RSI was developed by J. Welles Wilder, and it oscillates between 0 and 100. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. RSI can be used to detect general trends as well as finding divergences and failure swings.