Investors and paying cloes attention to shares of Neptune Wellness Solutions Inc (NEPT) as the Relative Momentum Indicator or RMI has been spotted trending higher over the past week.  As momentum builds for the shares, we will watch to see if the price moves into overbought territory.  

The Relative Momentum Index was introduced by Roger Altman, was publishing in 1993 in the Technical Analysis of Stocks & Commodities magazine.  The RMI aims to iimprove upon the widely used Relative Strength Indicator, identifying when shares reach oversold or overbought range.  The difference is in the “look back” period.  The standard RSI compares the current close with the close 1 day ago. The RMI allows you to vary the number of days used to look back.

Investors might be reviewing portfolio performance over the last six months. Many investors will be tracking shares that are trading near important levels such as the 52-week high and 52-week low. When a stock is trading near new 52-week high, investors may have to decide whether they should sell or hold on for future gains. Stocks that are moving towards a new 52-week low may also be worth keeping an eye on. There are many factors that can have an impact on the health of a particular stock. This is one reason why stock picking can be extremely tough at times. Because there are always so many things to monitor, it may be next to impossible to build a formula that will continually beat the market. Even after all the applicable information has been examined, the investor still has to make sense of the data and figure out what to do with it. Knowing how to use company data can end up being the difference between handsome gains and crippling losses. 

Turning to some additional key technicals, Neptune Wellness Solutions Inc (NEPT)’s Williams Percent Range or 14 day Williams %R is currently sitting at -16.18. In general, if the reading goes above -20, the stock may be considered to be overbought. Alternately, if the indicator goes under -80, this may show the stock as being oversold.

We can also take a look at the Average Directional Index or ADX of Neptune Wellness Solutions Inc (NEPT). 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 17.14. 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, the 14-day Commodity Channel Index (CCI) is 115.70. 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.

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 Neptune Wellness Solutions Inc (NEPT) is sitting at 3.44. 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 59.17, the 7-day is 66.32, and the 3-day is resting at 70.63.

Stock market investors typically have to deal with the risk element when making decisions about specific holdings. There will always be a trade-off between risk and reward, and this is quite evident in the equity market. In general, the more that someone is willing to risk, the higher the potential gains. Investors might need to be willing to identify their risk levels before attempting to jump into the fray. Some investors will choose to play it safe while others will opt to swing for the fences. Managing risk becomes increasingly more important when economic conditions are cloudy. Accumulating the most amount of understanding and relevant information about a company may be a good place to start. Studying a company’s position in the current market may help with understanding how the company has set themselves up for future growth.