Company shares of Xilinx Inc (XLNX) have seen the Rank Correlation Indicator climb higher over the past 3 trading days, suggesting that it could be nearing a turning point if the reading crosses the 80 mark.
The Rank Correlation Indicator, or RCI will find the highest high and the lowest low with a given range and will find out if the security is over or undervalued. It is very much like Stoachastic but with different time periods. Created by Charles Spearman, the indicator oscillates between +100 and -100. At +100 there is a maximum positive correlation between rising price and date. However, if the indicator shows -100, the price falls continuously while the date continues to rise. There is hence a maximum negative correlation. The interpretation is analogous to that for other oscillators. If RCI is higher than 80 (overbought), then a sell signal is triggered, and if RCI is lower than -80 (oversold), a buy signal is given.
Investors hope that they won’t have to deal with stock picks that don’t pan out, but this happens quite often in the stock market. At some point, the investor may have to make the tough decision to sell a stock that previously had a lot of upward potential. Holding onto an underperforming stock can sometimes hurt the portfolio. Investors may be hesitant to let go of the stock long after it should have been sold. Tracking the underlying fundamentals can assist the investor with figuring out the proper time to buy or sell a particular stock. Mastering this aspect of investing may come with experience, but it may be highly beneficial for the long-term success of the portfolio.
In addition to the RCI, investors may be looking to compare the current stock price of Xilinx Inc (XLNX) to some of its moving averages. After a recent check, the 200-day MA is resting at 95.58, and the 50-day is 126.08. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific period of time….