Jupiter European Opportunities Trust Plc (JEO.L) Sees Schaff Indicator Continue To Move Lower

Jupiter European Opportunities Trust Plc (JEO.L) shares have seen their Schaff Trend Cycle gradually downtrend this week over the past few sessions.  While this indicates negative price momentum, it also suggests that if the reading moves into oversold territory (STC of 30), then the liklihood of a reversal greatly increases.  Investors will be watching very closely over the next few days to see if the trend contiunes or reverses. 

The Schaff Trend Cycle (STC) indicator combines the common indicators of MACD & Stochastic. The benefit of the Schaff Trend Cycle is that it is meant to be quicker than the standard macd and stochastic signals.  The indicator uses similar methods to a MACD i.e uses exponetial moving averages but applies a cycle factor to them. Then the ‘price’ is smoothed using a mofidied Wilders’ smoothing algorithm.  The Schaff Trend Cycle indicator fluctuates between 0 and 100. Readings below 20 are considered oversold while readings above 80 are considered overbought.  The STC indicator fluctuates between 0 and 100. Readings below 20 are considered oversold while readings above 80 are considered overbought.

Investors may have to periodically remind themselves that they don’t have to be locked in to any given trade. Sometimes, even the best researched trade may go sour. Doubling down on losses can be a dangerous game even for the experienced investor. Investors may hold out exiting a certain trade with the hope that eventually the stock will bounce back and they can at least break even. Of course this may occasionally be the case, but there is also the chance that a stock may continue to spiral downward. Investors who are able to control their emotions and logically manage their positions may give themselves a slight advantage when tough decisions need to be made. Nobody can say for sure which way the market momentum will swing on any given day, but being prepared for those swings can help the trader or investor make the best possible decisions at any given moment.

Moving to some additional technical metrics, we note that Jupiter European Opportunities Trust Plc (JEO.L) presently has a 14-day Commodity Channel Index (CCI) of -86.90. The CCI was created to typically stay within the reading of -100 to +100. Traders may use the indicator to determine if a stock is trending or to spot overbought/oversold conditions. A CCI reading above the +100 level would suggest that the stock is overbought and possibly primed for a correction. On the other hand, a reading of -100 would indicate that the stock is oversold.

Active investors are typically interested in the factors that drive stock price movements. Buying an individual stock means that you own a piece of the company. The hope is that the company does very well and becomes highly profitable. A profitable company may decide to do various things with the profits. They may reinvest profits back into the business, or they may choose to pay shareholders dividends from those earnings. Sometimes stocks may eventually become undervalued or overvalued. Spotting these trends may lead to further examination or the underlying fundamentals of the company. A company that continues to disappoint on the earnings front may have some issues that need to be addressed. It is highly important to make sure all the research is done on a stock, especially if the investor is heavily weighted on the name. Sometimes earnings reports may be good, but the stock price does not reflect that. Having a good understanding of the entire picture may help investors better travel the winding stock market road.

A popular tool among technical stock analysts is the moving average. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a certain period of time. They may also be used to assist the trader figure out proper support and resistance levels for the stock. Currently, Jupiter European Opportunities Trust Plc (JEO.L) has a 200-day MA of 782.35, and a 50-day of 792.52. Presently, the stock has a 14-day RSI of 31.06 and the 7-day is sitting at 27.67. The Relative Strength Index (RSI) is one of multiple popular technical indicators created by J. Welles Wilder. Wilder introduced RSI in his book “New Concepts in Technical Trading Systems” which was published in 1978. RSI measures the magnitude and velocity of directional price movements. The data is represented graphically by fluctuating between a value of 0 and 100. The indicator is computed by using the average losses and gains of a stock over a certain time period. RSI can be used to help spot overbought or oversold conditions. An RSI reading over 70 would be considered overbought, and a reading under 30 would indicate oversold conditions. A level of 50 would indicate neutral market momentum.

Jupiter European Opportunities Trust Plc (JEO.L)’s Williams Percent Range or 14 day Williams %R presently is at -92.87. In general, if the reading goes above -20, the stock may be considered to be overbought. Alternately, if the indicator goes under -80, this may show the stock as being oversold. We can also take a look at the Average Directional Index or ADX of the stock. For traders looking to capitalize on trends, the ADX may be an essential technical tool. The ADX is used to measure trend strength. ADX calculations are made based on the moving average price range expansion over a specified amount of time. ADX is charted as a line with values ranging from 0 to 100. The indicator is non-directional meaning that it gauges trend strength whether the stock price is trending higher or lower. The 14-day ADX is 29.69. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would indicate a very strong trend, and a value of 75-100 would signify an extremely strong trend.

Inexperienced investors may have the tendency to purchase stocks that have recently been on a big run higher. This may be a result of not paying close attention to the fundamentals, or simply hoping that the stock will continue the move higher. Buying after a big move to the upside may mean that the investor is essentially paying too much for the stock at those levels. Sometimes a stock will take off and get too far ahead of its underlying value which may result in the price being overvalued. Keeping a close eye on the fundamentals may be a good way for the investor to know where the stock stands at any point in time.

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