Applied Optoelectronics Technical Analysis (NASDAQ:AAOI)
Technical analysis is the study of stock price and volume data through technical charts. This analysis does not take into account the intrinsic value of a stock. Just by looking at the Applied Optoelectronics stock price one can't take a trading decision. A trader needs to find a chart pattern, which is a clear cut pattern formation on the AAOI stock chart which creates a trading signal.
See Applied Optoelectronics bollinger bands, SMA - 200 day moving average, 50 day moving average and exponential moving averages. Technical analysis essentially tries to study the supply and demand for a particular security and determine the stock trends for that security. Chartists use stock price movements for this form of Applied Optoelectronics stock analysis.
Applied Optoelectronics Moving Average
Moving averages show the average price of AAOI stock over a set time period and help traders see the overall trend by smoothening out the daily variation in price movement. The longer the duration of the moving average, the higher the lag. For example, 200 day moving averages for Applied Optoelectronics are mostly signals of long term trends and will help long term traders.
Applied Optoelectronics Bollinger Bands
Bollinger Bands were developed by the famous technical trader John Bollinger and are a measure of the volatility of a stock like the AAOI stock. Applied Optoelectronics bollinger bands show that the stock price is $31.99, upper band is 36.05, lower band is 29.45, and the average is 32.75.
Applied Optoelectronics Moving Average Convergence Divergence or MACD
The moving average convergence divergence or MACD is a technical indicator which helps assess the stock price trend. Traders usually wait for a confirmed crossover signal before entering into a trading position. Divergence implies that the current stock price trend could come to an end, when the stock price diverges from MACD. The Applied Optoelectronics MACD line is above the signal line.
Applied Optoelectronics Relative Strength Index
The relative strength index compares the magnitude of recent gains to recent losses and is a momentum indicator. It attempts to assess overbought and oversold conditions of a stock. If the RSI of AAOI stock goes above 70 it could indicate an overbought condition, and if it goes below 30 it could signal an oversold position.