Continued Downside For Exelon
Published May 17, 2017
On May 16, Exelon Corporation (EXC) crossed below its 150 day moving average (DMA) and 200 DMA. One day prior, the stock crossed above both moving averages. A double cross above followed by an immediate cross down has occurred four times in the history of the stock. The double up/double down has resulted in a minimal loss of 0.283%, median loss of 4.644% and maximum loss of 8.333% over the next 26 trading days. On its own, the stock has crossed below the 150 DMA 172 times and the 200 DMA 124 times and the stock does not always continue to drop. The cross below the 150 has resulted in a median loss of 3.927% and a maximum loss of 25.050%. The cross below the 200 DMA has led to a median loss of 4.287% and 21.391% over the following 26 trading days.
When we take a look at other technical indicators, the relative strength index (RSI) is at 47.3256. 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. Currently the RSI is neutral and it could go any direction.
The true strength index (TSI) is currently -23.1234. 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 has been moving down for most of 2017.
The positive vortex indicator (VI) is at 0.8414 and the negative is at 1.0547. 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. Currently the negative and positive indicators are moving closer together, but near-term movement still favors more bearish action.
The stochastic oscillator K value is 60.6330 and D value is 36.1408. 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 stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is currently moving up The next few days will be key in determining if the stock will continue its downward movement. The K is currently higher and moving up, meaning the stock could move up.
Considering the RSI, TSI, VI and stochastic levels, the overall direction favors a move to the downside, although definitive downward movement may take a few more days to develop. Based on historical movement compared to current levels and the current position, the stock could drop at least 2% over the next 26 trading days if not sooner.
DISCLOSURE: I currently do not have positions in the stock mentioned above. I do not plan to 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.