Shares of Eaton Corp (ETN) are placed in the hotbed as the Mass Index reading has breached the key level of 27.  Developed by Donald Dorsey, the Mass Index uses the high-low range to identify trend reversals based on range expansions. In this sense, the Mass Index is a volatility indicator that does not have a directional bias. Instead, the Mass Index identifies range bulges that can foreshadow a reversal of the current trend.  The Mass Index highlights potential reversals in the form of “reversal bulges”, according to Donald Dorsey. These “reversal bulges” are characterized by the indicator’s move above the 27.00 level and then back below the 26.50 level (in order to confirm the move). 

The primary goal for some beginner traders might be just trying to survive. Traders that are disciplined with their money management may be able to better ride out the bumps that come with inexperience. Amateur traders tend to put too much at risk which can increase frustration during an extended losing streak. The more capital that is lost, the more difficult it can be to recover. Markets can be cruel, and traders that jump in without proper preparation can get pounded. Taking the time to carefully prepare before putting hard earned money at risk can help when the inevitable sticky situations arise.

Active traders may be zooming in on certain technical indicators for stock assessment. Currently, Eaton Corp (ETN) has a 14-day Commodity Channel Index (CCI) of -91.85. The CCI technical indicator can be used to help determine if a stock is overbought or oversold. CCI may also be used to help discover divergences that could possibly signal reversal moves. A CCI closer to +100 may provide an overbought signal, and a CCI near -100 may offer an oversold signal.

We can also do some further technical analysis on the stock. At the time of writing, the 14-day ADX for Eaton Corp (ETN) is 14.84. 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. Eaton Corp (ETN)’s Williams Percent Range or 14 day Williams %R currently sits at -83.13. 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.

Tracking other technical indicators, the 14-day RSI is presently standing at 51.04, the 7-day sits at 44.33, and the 3-day is resting at 47.20 for Eaton Corp (ETN). 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 78.71, the 50-day is 81.03, and the 7-day is resting at 83.21. 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.

Successful traders often craft disciplined strategies when dealing with the stock market. These strategies can range from very simple to very complex. Following a specific strategy might help keep emotions on the sidelines when trouble comes. Conducting the proper analysis before things get out of hand can help ease the burden of market turmoil because the preparation has already started. The road to becoming a good trader may be long and winding. Keeping tabs on all the macro and micro economic happenings may seem like an impossible task. Focusing on the important elements can help keep the trader directed down the right path. There is obviously a lot to be learned by studying the markets, and there are rarely any shortcuts that can be taken to lasting success in the stock market.