Yesterday, we looked at a Monthly Price Chart of the First Trust Cloud Computing ETF, noting the ETF’s 1-Month Price is trading above the 10-Month SMA.
Today’s chart is for RingCentral Inc. (NYSE: RNG)
RingCentral, Inc. provides software-as-a-service (SaaS) solutions that enable businesses to communicate, collaborate, and connect primarily in North America. The company’s products include RingCentral Office that provides communication and collaboration across various modes, including high-definition voice, video, SMS, messaging and collaboration, conferencing, online meetings, and fax; RingCentral Professional, a cloud based virtual telephone service that provides inbound call answering and management services for professionals.
Now, the Daily Price Chart below shows that RNG is in a price uptrend because the current price of RNG is trading higher than it was exactly five months ago. The On Balance Volume (OBV) Chart is shown below the Daily Price Chart.
On Balance Volume measures volume flow with a single easy-to-read line. Volume flow precedes price movement and helps sustain the price uptrend. When a stock closes up, volume is added to the line. When a stock closes down, volume is subtracted from the line. A cumulative total of these additions and subtractions form the OBV line.
We can see from the OBV chart shown above that the On Balance Volume line for RNG is sloping up. An up-sloping line indicates that the volume is heavier on up days and buying pressure is exceeding selling pressure. Buying pressure must continue to exceed selling pressure in order to sustain a price uptrend. This means that On Balance Volume is a simple indicator to use that confirms the price uptrend and its sustainability.
The numerical value of the On Balance Volume line is not important. We simply want to see an up-sloping line to confirm a price up trend, which is displayed in the chart above.
We’ll be sure to keep following RingCentral Inc., as the stock’s buying pressure exceeds it’s selling pressure and the price uptrend continues.
Additionally, we’d like to talk about how a previous Chart of the Day stock has done…
The Power of Options
On July 7, we highlighted PayPal Holdings, Inc. (NASDAQ: PYPL), noting that PYPL’s 50-Day EMA is trading above the 100-Day EMA signaling a bullish trend for the stock.
If you happened to have purchased PYPL shares on that day, you’d already be up 10.3%.
But… if you had purchased the right option contract, you would be up 99.05% in just under a month!
That’s the power of options.
Editor, Chart Of The Day
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