Tug of War Between Bulls and Bears: Which Way is the Power Swinging For Wisdomtree Neg Duration HI Yld Bond Fund (HYND)?

Wisdomtree Neg Duration HI Yld Bond Fund (HYND) shares have seen the Balance of Power trend lower over the past few sessions, indicating potential price moves are ahead.

The Balance of Power (BOP), indicator was developed by Igor Livshin and it was introduced in the August 2001 issue of Stocks and Commodities Magazine.  Balance of Power (BOP) measures the strength of the bulls versus the bears by assessing the ability of each to push price to extreme levels.  The BOP indicator represents the strength of the buyers (bulls) vs. the sellers (bears), and oscillates between -100 and 100. The calculation of the BOP = (close – open) / (high – low). A directional change of the BOP can be interpreted as a warning signal and will generally be followed by a price change.

Investors will be trying to gauge which way stock market momentum will shift as we head into the close of the calendar year. Some may be of the mindset that the bears will be taking over shortly. Others may be super bullish and ready for the market to make a further run higher. Trying to predict which way the tide will shift is no easy task. Being prepared for any situation that arises is a god way to combat the uncertainty that always follows the market. Being prepared can help the investor make quick, tough decisions when the time comes. Many investors may have already figured out that holding onto losers for too long can be damaging for the portfolio. They may have also realized that holding onto winners too long can also have negative effects. Finding that perfect buy/sell balance can end up being the difference between a good portfolio and a great one.

When completing stock analysis, investors and traders may opt to review other technical levels. Wisdomtree Neg Duration HI Yld Bond Fund (HYND) currently has a 14-day Commodity Channel Index (CCI) of -59.98. 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. The Average Directional Index or ADX is often considered to be an important tool for technical trading or investing. The ADX is a technical indicator developed by J. Welles Wilder used to determine the strength of a trend. The ADX is often used along with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of the trend. Presently, the 14-day ADX is resting at 16.55.

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.

Taking a peek at some moving average levels on shares of Wisdomtree Neg Duration HI Yld Bond Fund (HYND), the 200-day is at 20.90, the 50-day is 20.16, and the 7-day is sitting at 20.27. Moving averages can help identify trends and price reversals. They may also be used to help spot support and resistance levels. Moving averages are considered to be lagging indicators meaning that they confirm trends. A certain stock may be considered to be on an uptrend if trading above a moving average and the average is sloping upward. On the other side, a stock may be considered to be in a downtrend if trading below the moving average and sloping downward.

Traders may also be paying close attention to RSI levels on shares of Wisdomtree Neg Duration HI Yld Bond Fund (HYND). The current 14-day RSI is presently sitting at 49.60, the 7-day is 45.92, and the 3-day is 51.00. The RSI, or Relative Strength Index is a 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. Traders may use these levels to help identify stock price reversals.

As soon as an individual decides what they want out of their investments, they can start formulating the best way to accomplish those goals. The time horizon for each investor may be different. Fluctuations in the financial markets can have a big effect on shorter-term investments. Investors that need a certain amount of money in a shorter amount of time may be looking to develop a stock market strategy with a bit less risk involved. On the other end of the spectrum, a younger investor with a longer time horizon might be able to search for stocks with a higher potential for growth that may involve much more risk. The volatility of today’s markets can test the nerves of any investor. Understanding volatility and market fluctuations can help the investor gauge their risk tolerance in the markets.

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