Business

What is The Twiggs Money Flow Revealing For Shares of Lekoil Limited (LEK.L)?

Lekoil Limited (LEK.L) shares are being closely watched by investors as the Twiggs Money Flow indicator has jolted above the zero line.  This typically indicates that further upside is ahead for the shares.

Twiggs Money Flow indicator was developed by Colin Twiggs to improve the Chaikin Money Flow (CMF) indicator. The main idea behind the TMF indicator is to evaluate volume (money flow) as bullish or as bearish based on a close price location. Chaikin Money Flow uses CLV (Close Location Value) to do it. Twiggs Money Flow, on the other hand, uses TR (True Range). Another main difference is that CMF uses cumulative volume (sum of volumes over specified period) and the TMF applies Moving average to the volume.  When the TMF moves above the zero line, a bullish signal is present and prices can move higher.  When the TMF moves below 0, a bullish signal is revealed and prices could be headed downward.

Investors might be taking a closer look into the crystal ball to try and decipher what is in store for the second half of the year in the stock market. While cautious optimism may be the prevailing sentiment, many investors will be looking to take the portfolio to the next level. With markets still riding high, the big question is whether the momentum will push stocks higher or if the bears start to take over. There may still be a few undervalued stocks with much more upside potential ready to make big moves. Finding these stocks may involve doing a little more homework. Investors may be looking to take advantage of any little sell-off that might provide some bargain buying opportunities.   

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. Lekoil Limited (LEK.L)’s Williams %R presently stands at -9.20. 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.

Taking a closer look from a technical standpoint, Lekoil Limited (LEK.L) presently has a 14-day Commodity Channel Index (CCI) of 149.10. 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.

Traders may be focusing in on the ATR or Average True Range indicator when performing stock analysis. At the time of writing, Lekoil Limited (LEK.L) has a 14-day ATR of 0.87. The average true range indicator was developed by J. Welles Wilder in order to measure volatility. The ATR may assist traders with figuring out the strength of a breakout or reversal in price. It is important to note that the ATR was not designed to determine price direction or to predict future prices.

Currently, the 14-day ADX for Lekoil Limited (LEK.L) is sitting at 28.59. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would identify a very strong trend, and a value of 75-100 would lead to an extremely strong trend. ADX is used to gauge trend strength but not trend direction. Traders often add the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of a trend.

Checking in on some other technical levels, the 14-day RSI is currently at 70.28, the 7-day stands at 82.61, and the 3-day is sitting at 88.36. Many investors look to the Relative Strength Index (RSI) reading of a particular stock to help identify overbought/oversold conditions. The RSI was developed by J. Welles Wilder in the late 1970’s. Wilder laid out the foundation for future technical analysts to further investigate the RSI and its relationship to underlying price movements. Since its inception, RSI has remained very popular with traders and investors. Other technical analysts have built upon the work of Wilder. The 14-day RSI is still a widely popular choice among technical stock analysts.

Because there are so many stocks to choose from, it may not be feasible for investors to be able to research all of them. Investors may have many different preferred methods for screening stocks, and it can sometimes be easier to focus on a small number of stocks at first. There is no shortage of stock picking ideas that come from various outlets across the globe. Certain stocks tend to become household names simply because of the amount of coverage that they get from the media. There are many unglamorous stocks that might be a good fit for the portfolio. Taking the time to branch out into previously non-researched sectors may give the investor some new ideas for portfolio additions in the future.

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