What’s Behind Buddy Platform Ltd (BUD.AX)? Technical Indicators Under Review

Investors have placed Buddy Platform Ltd (BUD.AX) shares on watch as the Aroon Down indicator has moved above 70, indicating that there is downward momentum building for the shares.  

The Aroon indicator was developed by Tushar Chande in 1995. Aroon is used to measure the presence and strength of trends. According to Chande, whenever the components of the Aroon indicator are in close proximity, this is a sign of market consolidation. Aroon Up measures the uptrend, and Aroon Down measures the downtrend. When Aroon Up or Aroon Down values drop below 50, this indicates loss of upward and downside momentum respectively.  Values above 70 are signs of a strong trend for either component, while values that are less than 30 show that primary trend is weakening and opposing trend is picking up.

When it comes to investing in the equity market, discipline can play a major role in achieving ones goals. A few bad moves can send the investor’s confidence spiraling. Acting purely on emotion can lead to impulsive decisions that may cause the losses to pile up. Creating a solid plan and following through with the plan can help investors stay on track and focus on the proper details. Markets are constantly going up and down and the investing ride can sometimes be a bumpy one. Being able to see the big picture and focus on the important data can help keep the investor tuned in to the right channel. Investors who expect to jump into the market and immediately start raking in the profits may find out fairly quickly that trading without a plan can be a recipe for defeat. 

Investors may also be looking to compare the current stock price of Buddy Platform Ltd (BUD.AX) to some of its moving averages. After a recent check, the 200-day MA is resting at 0.13, and the 50-day is 0.11. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific period of time. Moving averages can be very useful for identifying peaks and troughs. They may also be used to help the trader figure out proper support and resistance levels for the stock.

The 14-day ADX for Buddy Platform Ltd (BUD.AX) is currently at 14.36. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would signify a very strong trend, and a value of 75-100 would point to an extremely strong trend. Checking in on some other technical levels, the 14-day RSI is currently at 47.89, the 7-day stands at 47.47, and the 3-day is sitting at 56.98. 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.

At the time of writing, Buddy Platform Ltd (BUD.AX) has a 14-day Commodity Channel Index (CCI) of 95.65. Developed by Donald Lambert, the CCI is a versatile tool that may be used to help spot an emerging trend or provide warning of extreme conditions. CCI generally measures the current price relative to the average price level over a specific time period. CCI is relatively high when prices are much higher than average, and relatively low when prices are much lower than the average. 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. Buddy Platform Ltd (BUD.AX)’s Williams %R presently stands at -66.67. 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.

Some investors will scour the markets looking for cheap, quality stocks. These stocks can be attractive for investors looking to find a bargain that could turn into a big winner. Investors may be cautious when searching for these types of stocks. Often times, a stock will see a huge jump and then everyone will hop on the bandwagon to buy without checking into the fundamentals. Sometimes this strategy may work out, but in many cases, the stock has already made the run and become too expensive to add to the portfolio. Conducting diligent research and constantly adding to the individual’s overall market education level may help the investor sift through the sea of stocks and find those names that are really worth getting into.

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