The Right Stock At The Right Time®  Launch Smart Chart
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Glossary

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A
ADXR
Alpha
Ave Vol

B
Best Longs
Best Shorts
Beta
Bollinger Bands
Bottom Fishing
Buy Stop

A

ADXR

J. Wells Wilder's Average Directional Movement Rating. This indicator was designed to measure the intensity of a stock's trend. Readings over 20 suggest that a stock is experiencing a trending movement while readings under 20 suggest that the stock is in a trading range. The higher the ADXR reading, the stronger the magnitude of the trend. ADXR does not indicate the direction of the trend, only its intensity.

Alpha

Alpha is a mathematical expression that reflects how much a stock would have fluctuated on average every month during the past year assuming that the S&P 500 was unchanged during that period.

Ave Vol (Average Volume)

The average daily volume that the stock has traded during the previous twenty days.

B

Best Longs

Stocks regarded as Best Longs are either those whose Opinion has been recently upgraded to LONG and are coming off a significant bottom with momentum or stocks that have experienced a significant upward move, the momentum characteristics are still in place and the stock has experienced a minor pullback.

Best Shorts

Stocks rated as Best Short (Sale) candidates are either those whose Opinion has been recently downgraded to Avoid and have formed significant top formations with distribution characteristics or stocks that have experienced a significant downward move, the momentum characteristics are still in place and the stock has experienced a minor retracement.

Beta

Beta is a measurement of a stock's volatility as compared to that of the S&P 500. Readings greater than 1.00 denote stocks that have demonstrated a greater degree of volatility than the S&P 500 during the previous year. Stocks with a Beta of .99 or less have demonstrated less volatility than the S&P during the same period. Traders who desire above average volatility should choose stocks with a Beta of 1.2 or higher. Conversely, conservative traders should only select stocks with a Beta less than 1.00.

Bollinger Bands

Developed by John Bollinger, these trading bands are plotted at standard deviation levels above and below a moving average of a stock's price. 'Second Opinion' uses a 20-day simple moving average and 2 standard deviations when computing Bollinger Bands. The spacing between Bollinger Bands is reflected as a whole number which depicts the volatility of the stock during the previous twenty days. Whenever these bands tighten (a value below 20), volatility has contracted, a condition that typically precedes a sharp price movement. The direction, however, of the anticipated move is not indicated by contraction of these bands.

Bottom Fishing

A Bottom Fishing approach is designed to identify stocks that have been beaten down for whatever reason and are trading at or close to their 52-week low. This can be a dangerous strategy since statistics show that the majority of stocks that are making new 52-week lows continue to make new lows as the company's troubles become apparent to the street. The ideal situation is to isolate stocks whose fundamentals are improving, are trading near their lows, but have been under accumulation for a period of time as the smart money crowd establishes positions in anticipation of a turnaround.

In order to qualify as a bottom-fishing candidate the company needs to have the following characteristics:

  • The Close is above 10.
  • The Close is within 20% of its 52-week low.
  • The current ratio is greater than 1.

Buy Stop

Depending on the status of the computer's technical Opinion for a particular stock, either a Buy Stop or Sell Stop is calculated for the stock. These stops are generated by locating the most recent cyclical Low or High at the time that the Opinion was originated. Stocks with an Avoid Opinion would have a Buy Stop based on the stock's previous cyclical High.



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