The Technicals Report is a summary report of a few common technical indicators for all stocks covered in the SmallCap Informer, and is available in the left menu in the Subscribers section of the website. A quick list of the most recent changes in condition is also shown on the Subscribers Home Page.
The Technicals Report is primarily provided for subscribers who are already conversant in technical analysis. The aim of this information is to augment the buy and sell recommendations of stocks covered in the SmallCap Informer, not to replace them.
In situations where you might be considering a sell but have not yet reached a conclusion, or are waiting for a more attractive buy price or for the current price to reach trigger a technical uptrend, or are considering a stock that is "on the cusp," then a review of technical indicators might provide additional rationale for making a decision.
The Technicals Report is updated daily overnight after each market day and uses the prior day’s closing prices of every stock currently covered in the newsletter, then calculates values and trends accordingly.
For example, our usual approach is to hold stocks during periods of a stock’s overvaluation and practice patience when circumstances aren’t working out for a particular company. But your personal risk tolerances, need for cash, or interest in purchasing another stock might cause you to examine your holdings with different objectives, and identifying a stock that is exhibiting technical strength or weakness could be the deciding point in deciding to sell.
Likewise, choosing between several otherwise reasonably well-matched candidates for purchase in your portfolio might be tipped towards the stock with the strongest current technicals.
Here is a brief primer on the indicators in the report and how they could be interpreted.
RSI measures a stock’s changes in momentum and can serve as warnings that the stock is overbought (if greater than 70) or oversold (if less than 30). An oversold security is usually considered a good long-term investment candidate, while an overbought security has been driven up in price into dangerous territory. Any value between 30 and 70 is neutral.
MFI measures changes in a stock’s price as well as its volume, and can provide warnings that the stock is overbought (if greater than 80) or oversold (if less than 20). As with RSI, oversold stocks have been knocked down in price and could be considered long-term buys.
The 50- and 200-Day Simple Moving Averages are among the most common and most basic technical indicators. When a stock’s price crosses a moving average line, a signal is generated. If the price crosses the line from above to below, the signal is bearish (for simplicity, we label it “sell”); if the price crosses from below to above, the signal is bullish (a “buy”). The 200-day moving average is considered a more long-term signal, while the 50-day is a shorter-term indicator.
Our report also includes the number of days since a signal was triggered and the price performance since then.
It’s not uncommon for indicators to show mixed signals, and as some indicators are more short-term-focused than long-term. In addition, each stock may respond differently to different signals depending on its own characteristics.
Fundamentals still govern, so if you are firm in your long-term horizon, you may well choose to ignore the technicals. On the other hand, so many traders and investors follow these indicators that it can be useful to understand the broader market’s current perception of a stock before you make a purchase or sale.
The Technicals Report can also be easily printed using the Print button on the page.
One final note for mobile warriors: the Technicals Report is delivered using “responsive web design,” which means that is scales and resizes according to the size of the user’s web browser, whether on a computer, tablet, or mobile phone. In fact, all of the website is built using this framework (though the PDF versions of the issues are always full-sized and wouldn’t be easily read on a smartphone).
Contact the SCI team in the Discussion Forums if you have questions or suggestions about the Technical Indicators.
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