Investors Are Turning Their Attention Towards Transcanada Corp (TRP.TO)’s Technicals

Transcanada Corp (TRP.TO)’s Aroon Up level has reached above the key level of 70, indicating a strong upward trend for the security. 

The Aroon indicator was developed by Tushar Chande in 1995. Aroon is used to measure the presence and strength of trends. Aroon can be drawn either as two lines, the Aroon Up and Aroon Down. The Aroon Up and Aroon Down lines oscillate between 0 and 100.

Aroon Up for a given time period is calculated by determining how much time (on a percentage basis) elapsed between the start of the time period and the point at which the highest closing price during that time period occurred. Aroon Up will be 100 when the instrument is setting new highs for the period. Conversely, Aroon Up will be 0 if the instrument has continually dropped throughout the period. Aroon Down is calculated in a similar manner, expect looking for lows as opposed to highs.

At some point, individual investors may find themselves routinely falling prey to the lure of performance chasing. It can be highly tempting to want to be a part of a near-term stock run to the upside. Short-term investors may only be interested in these types of moves, but longer-term investors may want to be a bit more cautious. Chasing performance may end up leading the investor away from previously defined goals and the overall strategy. Investors who are committed to achieving long-term success may occasionally need to reshuffle the deck when the short-term clatter becomes too noisy.

Shifting focus to some additional indicators, Transcanada Corp (TRP.TO) currently has a 14 day Williams %R of -22.86. In general, if the level goes above -20, the stock may be considered to be overbought. Alternately, if the indicator goes under -80, this may signal that the stock is oversold. The Williams Percent Range or Williams %R is a technical indicator that was developed to measure overbought and oversold market conditions. The Williams %R indicator helps show the relative situation of the current price close to the period being observed.

We can also take a look at the Average Directional Index or ADX of Transcanada Corp (TRP.TO). The ADX is used to measure trend strength. ADX calculations are made based on the moving average price range expansion over a specified amount of time. ADX is charted as a line with values ranging from 0 to 100. The indicator is non-directional meaning that it gauges trend strength whether the stock price is trending higher or lower. The 14-day ADX presently sits at 29.53. In general, and ADX value from 0-25 would represent an absent or weak trend. A value of 25-50 would indicate a strong trend. A value of 50-75 would indicate a very strong trend, and a value of 75-100 would signify an extremely strong trend. At the time of writing, Transcanada Corp (TRP.TO) has a 14-day Commodity Channel Index (CCI) of 27.96. Developed by Donald Lambert, the CCI is a versatile tool that may be used to help spot an emerging trend or provide warning of extreme conditions. CCI generally measures the current price relative to the average price level over a specific time period. CCI is relatively high when prices are much higher than average, and relatively low when prices are much lower than the average.

Investors might be trying to figure out an investment plan that is right for them. Some may opt to go with a short-term plan, and others may choose to invest in stocks for the long haul. The thought of creating a defined plan may be overwhelming to some. Comparing the plusses and minuses of both may be a good way to start forming a strategy. Investing for the short-term may offer chances to capitalize on gains over a few weeks or months. There may be more fluctuations to deal with in the short-term, but the rewards may be greater if managed properly. One drawback of investing for the short-term is that it may involve more risk. The element of correct timing comes into play when trying to enter or exit a position, which may not be for everyone. Investing for the long-term may be a safer way to go as investors are typically looking for smaller gains over a longer period of time.

A commonly used tool among technical stock analysts is the moving average. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a certain period of time. Moving averages can be very helpful for identifying peaks and troughs. They may also be used to assist the trader figure out proper support and resistance levels for the stock. Currently, the 200-day MA for Transcanada Corp (TRP.TO) is sitting at 56.23. The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of stock price movements. The RSI was developed by J. Welles Wilder, and it oscillates between 0 and 100. Generally, the RSI is considered to be oversold when it falls below 30 and overbought when it heads above 70. RSI can be used to detect general trends as well as finding divergences and failure swings. The 14-day RSI is presently standing at 61.91, the 7-day is 59.20, and the 3-day is resting at 57.14.