This report is designed to present the status of different components in the stock market. Using this report you can see which component is on the move, which is reversing, strong etc. We also see timing signals with overbought and oversold conditions.  It is always recommended to use Option Samurai’s scanner to drill down and find the best trades for more specific stocks.

The report is built upon distance from moving average. Our research shows significant edge when using it, as the MA shows trend, but the distance is mean reverting.

This article will help explain how to read the report.

What is Moving Average?

A moving average (MA) is a technical indicator that is used to give an indication of the flow of the market. By looking on past price data, it averages out random changes in stock price. The calculation is a very simple one: The sum of the end day price during the specified dates divided in the number of days (In our reports we look at the last 200 days) 

How to understand the result?

Traffic light

Indicates the status of the stock in last 200 days. This is in corresponds to the status column.

  1. Red - Overbought
  2. Green - Oversold. 

Percentage change 

The change in percentage of the stock price from last year.

Rel strength

Relative strength is a ratio of a stock price performance to a market average performance, in this case the S&P500. A change smaller than 1 will be shown as a negative value.

Trend

The trend of the stock in the last  year.

Status 

The status of the stock on day of report:

  1. OB - Overbought. The stock is currently bought more than it is sold
  2. OS - Oversold. The stock is currently sold more than it is bought.
  3. Extended - One action is slightly more active than the other.
  4. Natural - No dominant movement

Projected edge 

The projected edge is based on backtested results over the last 10 years (updated constantly). The edge measure how we expect the stock to behave in the next 1 month, compared with the average behavior. 

Range

A visual indication of the status.The head marks the current status. The tail is last week’s status. 

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