Two Bearish Crosses For Exelon
Published April 23, 2017
On April 21, 2017, the Exelon Corporation (EXC) 20 day moving average (DMA) crossed below its 50 DMA and the 200 DMA crossed below the 250 DMA. Both crosses have never occurred on the same day before and both crosses do not always result in a drop for the stock. Historically the 20 has crossed below the 50 DMA 93 times with a median drop of 4.412% and maximum drop of 30.837% over the next 20 trading days. Historically the 200 has crossed below the 250 DMA 19 times with a median drop of 5.612% and maximum drop of 35.336% over the next 20 trading days.
When we take a look at other technical indicators, the relative strength index (RSI) is at 39.2493. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. The current reading declares the stock is relatively neutral.
The true strength index (TSI) is currently -0.6979. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The current reading declares the stock is moving down.
The positive vortex indicator (VI) is at 0.8948 while the negative is at 1.1548. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The current reading declares the stock has been moving down.
The stochastic oscillator K value is 16.3935 and D value is 28.1336. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the price action is trending up. When the D value is higher that the K value, price action is trending down. The current reading declares the stock is quickly approaching oversold territory. This is the only indicator suggesting potential upward movement, even if it is just in the short-term.
Considering the moving average crossover, RSI, TSI, VI and stochastic levels, the overall direction has the stock moving down. Based on historical movement compared to current levels and the current position in its trend channel, the stock could drop at least 0.73% over the next 19 trading days. I am watching many trend lines and channels for EXC. The stock has conformed well to use the trendlines as respective support and resistance levels. The stock should drop in the long run, but it may go up first. The smarter play is waiting for the stock to go up and short the drop to at least 34.90.
DISCLOSURE: I currently do not have positions in the stock mentioned above. I most likely will not enter a position within the next 72 hours. Historical movements and technical indicators should never be the sole basis for entering positions involving risk. Make sure appropriate research is conducted prior to taking any risk in a marketplace.