Jean Coutu Group Pjc (JCOUF)’s STC Running Higher in Consecutive Sessions

Jean Coutu Group Pjc (JCOUF) shares have seen their Schaff Trend Cycle gradually uptrend this week over the past 3 sessions.  While this indicates nice price momentum, it also suggests that if the reading moves into overbought territory (STC of 70), then the liklihood of a reversal greatly increases.  Investors will be watching very closely over the next few days to see if the trend contiunes or reverses. 

The Schaff Trend Cycle (STC) indicator combines the common indicators of MACD & Stochastic. The benefit of the Schaff Trend Cycle is that it is meant to be quicker than the standard macd and stochastic signals.  The indicator uses similar methods to a MACD i.e uses exponetial moving averages but applies a cycle factor to them. Then the ‘price’ is smoothed using a mofidied Wilders’ smoothing algorithm.  The Schaff Trend Cycle indicator fluctuates between 0 and 100. Readings below 20 are considered oversold while readings above 80 are considered overbought.  The STC indicator fluctuates between 0 and 100. Readings below 20 are considered oversold while readings above 80 are considered overbought.

The RSI, or Relative Strength Index is another popular oscillating indicator among traders and investors. The RSI operates in a range-bound area with values between 0 and 100. When the RSI line moves up, the stock may be experiencing strength. The opposite is the case when the RSI line is heading lower. Different time periods may be used when using the RSI indicator. The RSI may be more volatile using a shorter period of time. Many traders keep an eye on the 30 and 70 marks on the RSI scale. A move above 70 is widely considered to show the stock as overbought, and a move below 30 would indicate that the stock may be oversold. Jean Coutu Group Pjc (JCOUF) has a 14-day RSI of 70.55, the 7-day is at 72.82, and the 3-day is resting at 74.03.

When getting into the markets, most investors realize that riskier stocks may have an increased potential for higher returns. If investors decide to take a chance on some of these stocks, they may want to employ some standard techniques to help manage that risk. This may involve creating a diversified stock portfolio. Mixing up the portfolio with stocks from different sectors, market caps, and growth potential, may be the right move. In general, the goal is to maximize returns in accordance with the individual’s specific risk profile. It should be obvious that no matter how well rounded the portfolio is, there are always risks in the equity markets. Having a sound plan before investing can help ease the burden of knowing that markets can sometimes do crazy things without any rhyme or reason.

Jean Coutu Group Pjc (JCOUF) currently has a 14-day Commodity Channel Index (CCI) of 79.90. Active investors may choose to use this technical indicator as a stock evaluation tool. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. On the flip side, a reading below -100 may signal a downtrend reflecting weak price action. Using the CCI as a leading indicator, technical analysts may use a +100 reading as an overbought signal and a -100 reading as an oversold indicator, suggesting a trend reversal.

Shares of Jean Coutu Group Pjc (JCOUF) have a 200-day moving average of 15.20. The 50-day is 16.15, and the 7-day is sitting at 18.90. Using a bigger time frame to assess the moving average such as the 200-day, may help block out the noise and chaos that is often caused by daily price fluctuations. In some cases, MA’s may be used as strong reference points for spotting support and resistance levels.

The Average Directional Index or ADX is technical analysis indicator used to describe if a market is trending or not trending. The ADX alone measures trend strength but not direction. Using the ADX with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) may help determine the direction of the trend as well as the overall momentum. Many traders will use the ADX alongside other indicators in order to help spot proper trading entry/exit points. Currently, the 14-day ADX for Jean Coutu Group Pjc (JCOUF) is 28.97. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would signal a very strong trend, and a value of 75-100 would indicate an extremely strong trend. The Williams Percent Range or Williams %R is another technical indicator that may be useful for traders and investors.

The Williams %R is designed to provide a general sense of when the equity might have reached an extreme and be primed for a reversal. As a general observance, the more overbought or oversold the reading displays, the more likely a reversal may take place. The 14 day Williams %R for Jean Coutu Group Pjc (JCOUF) is noted at -12.15. Many consider the equity oversold if the reading is below -80 and overbought if the indicator is between 0 and -20.

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