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LAGGING INDICATOR
A lagging indicator is any indicator that reports on
events in the past. For example, the moving average
of a stock price is reporting on stock prices in the past. Hence,
technical analysis indicators using moving averages are lagging
indicators. In contrast, an indicator that predicts events is called
a leading indicator.
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LANE'S STOCHASTIC OSCILLATOR (LSTOCH)
Stochastics is a two line, price-based oscillator
that ranges between zero and 100. It occurs in three variations
with respect to smoothing and interpretation of overbought and oversold
levels. This technical analysis indicator can be used to determine
entry and exit points. The indicator can be highly volatile
with a potential for damaging whipsaws.
Variations include fast, slow and full stochastics. More
about this technical analysis indicator . . .
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LEADING INDICATOR
A leading indicator is any indicator that predicts
an event that has not yet occurred. For example, a significant increase
in the number of new construction permits issued for single family
homes generally predicts an increase in new home sales. A drop in
crude oil supply generally predicts a price increase when that supply
shortage reaches the market. Leading indicators are not always accurate.
By way of contrast, an indicator that reports on events after they
have happened is called a lagging indicator.
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LINEAR REGRESSION SLOPE
The slope of a linear regression trend line, fitted
using the method of least squares, is the Linear Regression Slope.
The slope shows how prices have changed per unit of time. See also
regression analysis.
More on the Linear Regression Slope
technical analysis indicator. . .
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LIQUIDITY
Liquidity generally refers to how easily a non-cash
asset can be converted to cash. As an example: US Savings Bonds
are generally very liquid. A large building, requiring months to
sell, is generally considered not very liquid. Something you can't
even give away (let alone sell) would be considered illiquid. In
the stock market liquidity specifically refers to the ability to
buy or sell a particular issue at a particular time. If you hold
10,000 shares of something that trades an average of 100 shares
per day you would have a hard time selling all your holdings in
short order without affecting the price.
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LONG
When investors are “long,” it means they
believe that an issue’s price will be rising and have invested
accordingly. Common longs are actual purchase of issues,
then waiting for a price rise. If they believe the price will decline,
investors go short.
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LONG TERM - See Term
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MAXIMUM DRAWDOWN - See Drawdown
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MAXIMUM ENTROPY SPECTRAL ANALYSIS - See MESA
Sine Wave
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MESA SINE WAVE
MESA is an acronym for Maximum Entropy Spectral Analysis.
Primarily used to examine short-term
cycles, the MESA Sine Wave can be used to determine whether or not
an issue is “cycling” (that
is, not trending) by how
closely this Technical Analysis Indicator (TAI)
approximates a sine wave. The closer the approximation, the more
the security is “cycling.” The less this TAI resembles a sine wave,
the more the security is trending. More
about this TAI . . .
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MOMENTUM
Momentum is the price "velocity" or the rate
of change of a security's price. It is a leading indicator of a
change in the direction of price trend. Momentum change usually
precedes a change in price trend.
Momentum can also refer to a particular style of trading. Bullish
momentum players buy securities that are popular, or those that
they believe will become popular. As the word spreads and an equity's
popularity grows, the hope is that the advance will accelerate.
This idea is summarized by the phrase "the hot get hotter and
the cold get colder."
The financial terms momentum and velocity seem to have been borrowed
from physics. However, in physics, momentum and velocity are two
completely different concepts. In physics, momentum is the measure
of the motion of a body equal to the product of its mass and its
velocity. It is also called linear momentum. As price does not have
a mass, the financial term really should have been velocity. However,
if we consider volume as mass, then momentum would be price times
volume. See Volume * Price Momentum
Oscillator.
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MONEY FLOW INDEX (MFI)
Often abbreviated MFI, the Money Flow Index measures
the strength of money flowing into and out of a security. It is
a cousin of the Relative Strength Index (RSI), but also accounts
for volume, whereas RSI only addresses prices. More
about this technical analysis indicator . . .
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MOVING AVERAGES (MA)
There are several kinds of moving averages. See:
Exponential Moving
Average (EMA)
Simple Moving
Average (SMA)
Triangular Moving
Average (TMA)
Variable Moving
Average (VMA)
Volume Adjusted
Moving Average (VAMA)
Weighted Moving
Average (WMA)
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MOVING AVERAGE CONVERGENCE/DIVERGENCE (MACD)
MACD is a price-based lagging
indicator that relates two exponential moving averages (EMAs).
MACD can be used in three ways. First, it can suggest buying or
selling the issue when MACD
crosses its signal line. Second, the issue's price diverging from
the MACD can be taken as the end of the current trend.
Third, the MACD rising dramatically can be an indication that the
issue is overbought. More
about this technical analysis indicator . . .
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NAICS (NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM) - See Industry
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NEGATIVE DIVERGENCE - See Divergence
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NEW HIGH - 13 WEEK
An example of the Price Channel Trading Range Breakout
Rule. Sometimes called an n-Day Rule. The n13hi is possibly
the simplest of indicators: It compares the current closing price
with those of the previous 13 weeks. More
about this technical analysis indicator . . .
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NEW HIGH - 26 WEEK
An example of the Price Channel Trading Range Breakout
Rule. Sometimes called an n-Day Rule. The n26hi is possibly
the simplest of indicators: It compares the current closing price
with those of the previous 26 weeks. More
about this technical analysis indicator . . .
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NEW HIGH - 52 WEEK
An example of the Price Channel Trading Range Breakout
Rule. Sometimes called an n-Day Rule. The n52hi is possibly
the simplest of indicators: It compares the current closing price
with those of the previous 52 weeks. More
about this technical analysis indicator . . .
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NEW POSITIVE DEVELOPMENT (NPD)
A New Positive Development (NPD) occurs when a technical
analysis indicator (TAI) operation
or function turns positive with the results of today's data.
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NON-TRENDING
Non-trending is the general tendency of elements in
a series to move sideways, as opposed to up or down. This does not
imply a flat horizontal, line. There will be rises and falls, but
the rise does not exceed an upper limit (see resistance)
nor does it fall below a lower limit (see support).
The term is usually applied to prices over time. When there is a
general tendency up or down, it is called trending.
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NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM (NAICS) - See Industry
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NOTES REPORT
This is a downloadable report by issue
that describes events such as splits, dividends, or other events.
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ON BALANCE VOLUME (OBV)
Often abbreviated as OBV, the On Balance Volume technical
analysis indicator (TAI) relates volume
to closing price. It shows whether a security is being purchased
or sold. More about this TAI . .
.
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OSCILLATOR
The term “oscillator” has been borrowed
from the physical sciences, and misused in the financial world.
In the sciences, an oscillator is a signal source that produces
some type of regularly varying signal, often a sinusoidal signal.
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OVERBOUGHT
The overbought situation is a technical condition that
occurs when prices are considered too high and susceptible to a
decline. It is important to keep in mind that overbought is not
necessarily the same as being bearish.
It merely implies that a stock has risen too far too fast and might
be due for a pullback.
In technical analysis, an overbought market is one in which the
volume of buying that has occurred is greater than the fundamentals
can justify. It is the opposite of oversold
below.
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OVERSOLD
The oversold situation is a technical condition that
occurs when prices are considered too low and ripe for a rally.
It is important to keep in mind that oversold is not necessarily
the same as being bullish.
It merely implies that the security has fallen too far too fast
and may be due for a reaction rally.
In technical analysis, an oversold market is one in which the volume
of selling that has occurred is greater than the fundamentals can
justify. The opposite of overbought above. |
