Welcome to....

Order Currently Published Books by the Author

Educational Library
Type of Securities Investment Strategies Fundamental Analysis Technical Analysis

Technical  Analysis Categories

 - Types of Charts
      * Bar Charts
      * Line Charts
      * Candlestick Charts

 - Chart Reading
      * Trendlines
      *  Resistance Levels
      *  Support Levels

 - Moving Average
     * Simple Moving Average
      * Weighted Moving Average
      * Exponential Moving Average
      * Triangular Moving Average

 - Momentum Indicators &
 - Rate of Change
 - Relative Strength Index
 - Moving Averages
    Convergence /  Divergences
 - Price Oscillator
 - Stochastic
 - Money Flow Index
 - Williams %R
 - Volume + Moving Average

 - Stock Chart Overlays:
 - Bollinger Bands
 - Parabolic SAR

 - Stock Chart Patterns:
     * Head and Shoulders
     * V Formations
     * Double Tops and Bottoms
     * Triple Tops and Bottoms
     * Saucers - Rounded Tops and
     * Ascending, Descending and
         Symmetrical Triangles
     * Channels - Rectangles
     * Rising and Falling Wedges
     * Bullish and Bearish Flags
     * Pennants
     * Diamonds
     * Cup and Handle
     * Pan and Handle
     * Spikes
     * One-Day Reversals
     * Island Reversal

 - Dow Theory

 - Elliot Wave Theory

 - Spinella Heart Rate Theory

 - Fibonacci





Williams %R

Williams’s %R compares a stock’s closing price to its high and low prices for the period. The formula emphasizes the high prices. When plotted, a negative vertical/horizontal scale is used. The vertical axis is measured from 0 to –100, while the horizontal scale represents the time periods.

Below is a diagram of the W%R oscillator, using Raytheon as an example. Raytheon is a relatively inexpensive way to participate in the defense industry. The demand for missiles and defense electronics, both core businesses for Raytheon, should only increase.

Reproduced with permission of Yahoo! Inc. ă 2004 by Yahoo! Inc.
YAHOO! and the YAHOO! logo are trademarks of Yahoo! Inc.

The W%R oscillator identifies when a stock is overbought or oversold. A reading of 0 to –20 represents an overbought range, while a reading of –80 to –100 represents an oversold stock. The nearer the closing price is to its high for the period, the closer to 0 on the chart.  

It is important to buy in the direction of the trend. If a stock is in an overbought or oversold range, one should be cautious and keep to the direction of the trend until a reversal signal is generated.  

When a stock is in an oversold situation, technical analysts either buy in the direction of the trend (short the security) and sell when a reversal signal is generated, or they wait until the trend reverses before taking a long position. Conversely, if a stock is in an overbought range, they either long the security until a sell signal is generated, or wait for a sell signal and then short the security. 

Look for stock prices that diverge from the W%R trendline. Normally, divergences create buying opportunities; try to find the cause for the divergence before acting. Stock prices usually revert to their typical trend patterns. 

 The calculation for the Williams %R is as follows:

  W%R = [(High Price (N) – closing price) / (High Price (N) – Low Price (N))] * -100


N = Number of periods

The W%R indicator is similar to the Fast Stochastic’s %K line, except the numerator of the W%R line subtracts the high price for the period from the closing price, while the numerator of the %K line subtracts the closing price from the period’s low price. The W%R is charted and measured in negative values, while the stochastic’s %K line uses positive values. Additionally, the W%R chart does not use a smoothing moving average signal trendline, as the stochastic does.  

The W%R trendline is a valuable tool to identify the direction of stock prices.

Click below for more information on oscillators:
Rate of Change
Relative Strength Index
Price Oscillator
Money Flow Index
Volume + Moving Average


Need a Financial Advisor ? Business & Franchising Opportunities Featured
Made It ?
Spend It !
Risks, Uncertainties and Disclosures


Donations - Help Keep This Site Free!


| Home | Getting Started | Bank Savings | Equity Instruments | Bonds | Treasury Securities | Agency Securities | Derivatives |
| Funds | Annuities | Value Investing | Growth Investing | Income Investing  | Market Capitalization Strategy
| Momentum Investing | Technical Investing | Buy and Hold Strategy | Buy What You Know | Contrarian Investing | Turnaround Investing |
| Tobin’s Q | Responsible Investing | ADR's  | Global Investing Strategy | The Dow Theory  |  Odd-Lot Theory  |
| Election Cycle Theory  | Dow Dividend Theory | Penny Stocks | IPOs | Dollar Cost Averaging | Drips | Risk Tolerance  |
| Introduction to Fundamental Analysis | Income Statement Analysis | Balance Sheet Analysis | Cash Flow Analysis |
| Shareholders’ Equity Analysis | Ratios and Definitions | Technical Analysis | Type of Charts | Chart Reading | Oscillators |
| Chart Overlays | Chart Patterns | Elliot Wave Theory | Spinella Heart Rate Theory | Fibonacci | The Envelope System |
| Time Value of Money | Exchanges | IndexesAsset Allocation | Retirement Savings | Site Map |

Click here: To save on ordering any of "The Chestnut and Cedar Stock Report's" books.