Trading Check: PPO Reading Above the Signal Line on Shares of Digital Realty Trust (DLR)

The Percentage Price Oscillator is above the signal line on shares of Digital Realty Trust (DLR). Traders watching these levels may be looking for the stock to be gaining bullish momentum.

Investors will most likely be looking ahead to the next round of company earnings reports. As the reports come in, all eyes will be on the companies that post wide margin earnings beats or misses. Many investors will be closely tracking which way analyst estimates are being adjusted right before earnings. This may provide some insight on how good or bad the numbers for the quarter are likely to be. Investors might want to take a look at their holdings after the earnings reports to make sure that nothing extremely odd is occurring after crunching the numbers.

Digital Realty Trust (DLR) presently has a 14-day Commodity Channel Index (CCI) of 165.96. Typically, the CCI oscillates above and below a zero line. Normal oscillations tend to stay in the range of -100 to +100. A CCI reading of +100 may represent overbought conditions, while readings near -100 may indicate oversold territory. Although the CCI indicator was developed for commodities, it has become a popular tool for equity evaluation as well.

The Williams Percent Range or Williams %R is another technical indicator worth taking a look at. Digital Realty Trust (DLR) currently has a 14 day Williams %R of -1.79. The Williams %R fluctuates between 0 and -100 measuring whether a security is overbought or oversold. The Williams %R is similar to the Stochastic Oscillator except it is plotted upside-down. Levels above -20 may indicate the stock may be considered is overbought. If the indicator travels under -80, this may signal that the stock is oversold. Chart analysts may also use the indicator to project possible price reversals and to define trends.

The Average Directional Index or ADX is a popular technical indicator designed to help measure trend strength. Many traders will use the ADX in combination with other indicators in order to help formulate trading strategies. Presently, the 14-day ADX for Digital Realty Trust (DLR) is 22.02. In general, 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 alone was designed to measure trend strength. When combined with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI), it can help decipher the trend direction as well.

Digital Realty Trust (DLR) currently has a 50-day moving average of 108.67, the 200-day is at 112.41, and the 7-day is 114.40. In the investing realm, using the moving average for technical equity analysis is still very popular among traders and investors. The moving average can be used as a reference point to help discover buying and selling opportunities. Using a longer term moving average such as the 200-day may help block out the noise and chaos that is sometimes created by daily price fluctuations. In some cases, MA’s may be used as strong reference points for finding support and resistance levels.

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. The 14-day RSI is presently standing at 71.75, the 7-day is 82.42, and the 3-day is resting at 93.91.

When dealing with the stock market, investors have to be constantly on their toes. Investors who have had success in the past using a certain method for stock picking may eventually realize that the method no longer produces the same results as it once did. Expecting that the market environment will change and being able to react to those changes can greatly help the investor when the time comes. While investor confidence can be a positive thing, complacency can lead to future frustration and poor portfolio performance. Seasoned investors know that no bull market will last forever just as no bear market will last forever. Being prepared for any situation can greatly help the investor navigate the market when changes do occur.

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