Ready for a Breakout? Stock Update on Lucapa Diamond Company Limited (LOM.AX)
October 25, 2016 Sonny Harmon
Taking a quick look at technical levels and trend lines for Lucapa Diamond Company Limited (LOM.AX), we see that the stock has a 14-day ADX of 30.51. 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. 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.
Looking further at additional technical indicators we can see that the 14-day Commodity Channel Index (CCI) for Lucapa Diamond Company Limited (LOM.AX) is sitting at -43.57. 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 Lucapa Diamond Company Limited (LOM.AX) have a 7-day moving average of 0.48. Taking a glance at the relative strength indictor, we note that the 14-day RSI is currently at 57.28, the 7-day stands at 53.28, and the 3-day is sitting at 60.22.
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.
Lucapa Diamond Company Limited (LOM.AX) opened the most recent session at $0.48. After a recent check, shares had moved $0.005 rising to a high of $0.50 and slipping to a low of $0.47. We will be closely monitoring the name in the next few weeks to see how the stock performs.
LOM Price at posting:
48.0¢ Sentiment: None Disclosure: Held
