Tug of War Between Bulls and Bears: Which Way is the Power Swinging For Capital Strength ETF FT (FTCS)?

Capital Strength ETF FT (FTCS) shares have seen the Balance of Power trend lower over the past few sessions, indicating potential price moves are ahead.

The Balance of Power (BOP), indicator was developed by Igor Livshin and it was introduced in the August 2001 issue of Stocks and Commodities Magazine.  Balance of Power (BOP) measures the strength of the bulls versus the bears by assessing the ability of each to push price to extreme levels.  The BOP indicator represents the strength of the buyers (bulls) vs. the sellers (bears), and oscillates between -100 and 100. The calculation of the BOP = (close – open) / (high – low). A directional change of the BOP can be interpreted as a warning signal and will generally be followed by a price change.

When getting into the markets, most investors realize that riskier stocks may have an increased potential for higher returns. If investors decide to take a chance on some of these stocks, they may want to employ some standard techniques to help manage that risk. This may involve creating a diversified stock portfolio. Mixing up the portfolio with stocks from different sectors, market caps, and growth potential, may be the right move. In general, the goal is to maximize returns in accordance with the individual’s specific risk profile. It should be obvious that no matter how well rounded the portfolio is, there are always risks in the equity markets. Having a sound plan before investing can help ease the burden of knowing that markets can sometimes do crazy things without any rhyme or reason. 

Tracking other technical indicators, the 14-day RSI is presently standing at 62.69, the 7-day sits at 63.56, and the 3-day is resting at 78.87 for Capital Strength ETF FT (FTCS). The Relative Strength Index (RSI) is an often employed momentum oscillator that is used to measure the speed and change of stock price movements. When charted, the RSI can serve as a visual means to monitor historical and current strength or weakness in a certain market. This measurement is based on closing prices over a specific period of time. As a momentum oscillator, the RSI operates in a set range. This range falls on a scale between 0 and 100. If the RSI is closer to 100, this may indicate a period of stronger momentum. On the flip side, an RSI near 0 may signal weaker momentum. The RSI was originally created by J. Welles Wilder which was introduced in his 1978 book “New Concepts in Technical Trading Systems”.

For further review, we can take a look at another popular technical indicator. In terms of moving averages, the 200-day is currently at 52.30, the 50-day is 51.50, and the 7-day is resting at 53.13. Moving averages are a popular trading tool among investors. Moving averages can be used to help filter out the day to day noise created by other factors. MA’s may be used to identify uptrends or downtrends, and they can be a prominent indicator for detecting a shift in momentum for a particular stock. Many traders will use moving averages for different periods of time in conjunction with other indicators to help gauge future stock price action.

Looking at shares from a technical standpoint, Capital Strength ETF FT (FTCS) presently has a 14-day Commodity Channel Index (CCI) of 50.66. 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.

We can also do some further technical analysis on the stock. At the time of writing, the 14-day ADX for Capital Strength ETF FT (FTCS) is 22.77. Many technical chart analysts believe that an ADX value over 25 would suggest a strong trend. A reading under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal. The ADX is typically plotted along with two other directional movement indicator lines, the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI). Some analysts believe that the ADX is one of the best trend strength indicators available.

Interested investors may be watching the Williams Percent Range or Williams %R. Williams %R is a popular technical indicator created by Larry Williams to help identify overbought and oversold situations. Investors will commonly use Williams %R in conjunction with other trend indicators to help spot possible stock turning points. Capital Strength ETF FT (FTCS)’s Williams Percent Range or 14 day Williams %R currently sits at -26.60. In general, if the indicator goes above -20, the stock may be considered overbought. Alternately, if the indicator goes below -80, this may point to the stock being 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.

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