Di(4)TASMAN(4)Deep(66)Stock(5376)RESOURCES(89)
Are you considering investing in TASMAN RESOURCES NL (ASX: TSN)? If so, you might want to pay close attention to the Williams%R indicator. This technical analysis tool can provide valuable insights into the stock's potential movements. In this article, we'll delve into what the Williams%R indicator is, how it works, and how you can use it to make informed investment decisions.
What is Williams%R?
The Williams%R indicator, also known as the %R, is a momentum indicator developed by Larry Williams. It measures the current price level in relation to the highest high and lowest low over a specified period. The formula for Williams%R is:
%R = (Highest High - Current Price) / (Highest High - Lowest Low) * -100
This indicator ranges from 0 to -100, with readings above -20 indicating that a security is oversold, and readings below -80 indicating that a security is overbought.
How Does It Work?
The Williams%R indicator works by providing a clear signal when the stock is either overbought or oversold. When the indicator is above -20, it suggests that the stock may be due for a reversal, and vice versa.
Case Study: TASMAN RESOURCES NL
Let's take a look at how the Williams%R indicator has performed for TASMAN RESOURCES NL over the past few months.
Oversold Conditions: In early 2021, the Williams%R indicator for TASMAN RESOURCES NL dipped below -20, suggesting that the stock was oversold. Investors who paid attention to this signal may have capitalized on a potential buying opportunity.
Overbought Conditions: Conversely, in late 2021, the indicator rose above -80, indicating that the stock was overbought. Investors who heeded this warning might have sold their positions to avoid a potential downturn.
The Williams%R indicator is a powerful tool for technical traders looking to identify oversold and overbought conditions in the stock market. By understanding how to use this indicator, you can make more informed investment decisions, especially when considering stocks like TASMAN RESOURCES NL.
Remember: The Williams%R indicator is just one tool in your investment arsenal. It's important to combine it with other indicators and fundamental analysis to make well-rounded investment decisions.
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