The Money Flow Index of Okta Inc Class A (OKTA) this week has placed the shares on the radar as it nears the key 70 or 80 level. At the time of writing the MFI is holding above 60 and trending higher for the name. The Money Flow Index creates a ratio of Positive Money Flow and Negative Money Flow over time and scales it to a number between 0 and 100. The MFI value can be used to evaluate overbought and oversold conditions in a security the index moves above or below a certain reference level. Divergence between MFI and the price direction can also be indicative of a reversal. If price is trending higher and MFI is decreasing over that period, a market top may occur.
Many new investors may be frantically researching the best way to study the stock market. It is hard to say with any certainty which approach will work out the best. Traders may tend to gravitate towards studying the technical, while longer-term investors may be more likely to use fundamental analysis. Of course, many individuals will opt to use a combination of both. Determining the individual risk tolerance and time horizon can play a big part in deciding which way to tackle the market. Short-term trading can be highly risky and may not be suitable for certain individuals. Long-term investing may be the favored way to get into the stock market, but this may vary from person to person. Investment strategies can range from super simple to ultra complex. The one thing that most stock market followers would agree on is that there is rarely any substitution for hard work, dedication, and putting in the required hours of study.
When undertaking stock analysis, investors and traders may choose to view multiple technical levels in addition to the MFI. Okta Inc Class A (OKTA) currently has a 14-day Commodity Channel Index (CCI) of 14.91. Investors and traders may use this indicator to help spot price reversals, price extremes, and the strength of a trend. Many investors will use the CCI in conjunction with other indicators when evaluating a trade. The CCI may be used to spot if a stock is entering overbought (+100) and oversold (-100) territory.
We can also do some further technical analysis on the stock. At the time of writing, the 14-day ADX for Okta Inc Class A (OKTA) is 28.30. 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. Okta Inc Class A (OKTA)’s Williams Percent Range or 14 day Williams %R currently sits at -34.00. 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 63.51, the 7-day sits at 58.24, and the 3-day is resting at 38.05. 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 59.12, the 50-day is 68.29, and the 7-day is resting at 81.50. 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.
Investors are always looking for any little advantage when trading the stock market. Scouring all the various data regarding publically traded companies can be overwhelming at times. Once the investor becomes familiar with the basics, they may be able to dive in deeper and focus on the essentials. Creating a winning strategy may not occur overnight. There may be times when even the best crafted plan does not play out as expected. Being flexible and having the proper tools in place can help the investor see the clearer picture when markets get muddy.
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