Is it time to Buy MGM?
MGM (NYSE) has had their stock price beaten down due to the pandemic, however with restrictions starting to lift it seems the economy has started to look up for the company which has been shown by the recent uptick in MGM’s price. We will take a deeper dive into the technical indicators forecasting the companies future.
The Vortex Indicator is a powerful indicator for spotting trend reversals and confirming current trends. The way it is used is very simple there is a VI positive line in (Blue) and a VI negative in (red) a bullish trend is confirmed if the blue line sits above the red line and a bearish trend exists if the red line sits above the blue line. A reversal occurs when the lines cross as we can see with MGM graph above the blue line has crossed above the red line indicating a trend reversal and a buy signal that the uptrend is on its way.
Balance of power
The Balance of power indicator is very simple when the line is above 0 it indicates that buyers have dominance over sellers and when it is below 0 it indicates that sellers have dominance over buyers. The indicator moves between 1 at the very highest and -1 at the very lowest the indicator tracks how strongly price trades to extreme high and low levels. The Reading MGM has is .65 which strongly indicates buyers are dominating the sellers in the market pointing to the conclusion that MGM shares may move high. Understanding this analysis it is also important to understand what you need to do before you can even start trading.
The Aroon indicator works with two lines an Aroon up line in orange which measures the strength of the uptrend and the Aroon down line in the blue which measures the strength of a downtrend these lines will fluctuate day to day moving above and below each other. The Aroon indicator is used to determine the strength of the stocks up or down trend relying on the premise that strong up trends will see higher highs and strong downtrends will see lower lows. Readings of above 0 indicate an up tread and readings of below 0 indicate a downtrend. To keep it simple if the Aroon Up line crosses above the Aroon down line this indicates a bullish buying signal because it is the start of a new trend the strength of the trend would be determined by its reading above or below 0. If it is closer to 0 it is considered weak if it is closer to 100 the trend is stronger. Looking at MGM chart we can see that the Aroon up line has crossed the Aroon down line indicating a Uptrend is possibly on its way although and it is very strong as the lines are very close to the 100% level.