Sprague Resources LP (SRLP) MESA Average Holds Above FAMA

Shares of Sprague Resources LP (SRLP) have seen the Mesa Adaptive Moving Average (MAMA) climb above the Fractional Moving Average or FAMA. The crossing of the MAMA and FAMA lines can be used to generate Buy and Sell signals. When the MAMA crosses above the FAMA a buy signal is given. Alternatively, when the MAMA crosses below the FAMA a sell signal is given.The MESA Adaptive Moving Average is a technical trend-following indicator which adapts to price movement “based on the rate change of phase as measured by the Hilbert Transform Discriminator”. This method of adaptation features a fast and a slow moving average so that the composite moving average swiftly responds to price changes and holds the average value until the next bar’s close. The Averages act as support and resistance areas and the price will tend to react to them. This makes pullbacks to the MAMA and FAMA suitable with-trend entry areas.  As with most technical indicators, the MAMA is best used in conjuction with additional signals.  

Stock analysis typically falls under the two main categories of fundamental and technical. Fundamental analysis involves diving into company financials. Fundamental analysts study how the company is performing in order to determine whether or not the stock is ready to run. With this type of analysis, investors will be looking at balance sheet strength and gauging how much money the company is giving back to shareholders. After crunching all the numbers, investors can use the information to calculate ratios to help determine if the company is properly valued and worth adding to the portfolio. Technical analysis relies on charting historical stock prices in order to define trends and patterns. The buying and selling of stocks using only technical analysis typically removes any concern for how the company is fairing or even what it actually does. Some indicators that technical analysts use can be super simple and others can be highly complex. Many investors will attempt to study both technicals and fundamentals with the goal of gaining greater knowledge of where the stock has been, and where it might be going.

Interested traders may also be keeping an eye on the Williams Percent Range or Williams %R. Williams %R is a popular technical indicator created by Larry Williams to help identify overbought and oversold situations. Investors will commonly use Williams %R in conjunction with other trend indicators to help spot possible stock turning points. Sprague Resources LP (SRLP)’s Williams Percent Range or 14 day Williams %R currently sits at -54.22. In general, if the indicator goes above -20, the stock may be considered overbought. Alternately, if the indicator goes below -80, this may point to the stock being oversold.

Another technical indicator that might serve as a powerful resource for measuring trend strength is the Average Directional Index or ADX. The ADX was introduced by J. Welles Wilder in the late 1970’s and it has stood the test of time. The ADX is typically used in conjunction with the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to help spot trend direction as well as trend strength. At the time of writing, the 14-day ADX for Sprague Resources LP (SRLP) is noted at 13.99. Many technical analysts believe that an ADX value over 25 would suggest a strong trend. A reading under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal.

Investors may use various technical indicators to help spot trends and buy/sell signals. Presently, Sprague Resources LP (SRLP) has a 14-day Commodity Channel Index (CCI) of 35.65. The CCI was developed by Donald Lambert. The assumption behind the indicator is that investment instruments move in cycles with highs and lows coming at certain periodic intervals. The original guidelines focused on creating buy/sell signals when the reading moved above +100 or below -100. Traders may also use the reading to identify overbought/oversold conditions.

Taking a look at other technical levels, the 3-day RSI stands at 53.18, the 7-day sits at 52.03 and the 14-day (most common) is at 51.94. The Relative Strength Index (RSI) is an often employed momentum oscillator that is used to measure the speed and change of stock price movements. When charted, the RSI can serve as a visual means to monitor historical and current strength or weakness in a certain market. This measurement is based on closing prices over a specific period of time. As a momentum oscillator, the RSI operates in a set range. This range falls on a scale between 0 and 100. If the RSI is closer to 100, this may indicate a period of stronger momentum. On the flip side, an RSI near 0 may signal weaker momentum. The RSI was originally created by J. Welles Wilder which was introduced in his 1978 book “New Concepts in Technical Trading Systems”.

Keeping an eye on Moving Averages, the 50-day is 16.88, the 200-day is at 17.37, and the 7-day is 17.26 for Sprague Resources LP (SRLP). Moving averages have the ability to be used as a powerful indicator for technical stock analysis. Following multiple time frames using moving averages can help investors figure out where the stock has been and help determine where it may be possibly going. The simple moving average is a mathematical calculation that takes the average price (mean) for a given amount of time.

With the stock market still cranking along, new investors may be wondering if they are too late to join the party. Picking stocks when everything is on the up can be much easier than trying to find winners when the markets sour. Taking a ride on the stock market roller coaster can indeed provide many ups, but also just as many downs. If there was a sure fire stock picking method that always produced winners, the ride would no doubt be smooth but much less thrilling. There is plenty of information available about publically traded companies that investors can use to make better informed stock picks. However, the challenge for the individual investor becomes figuring out how to best use the information at hand in order to select winners. Navigating the equity markets can seem daunting at times. Finding ways to filter out the important data from the unimportant data can make a big difference in sustaining profits into the future. As we move into the second half of the year, investors will be watching to see which way the momentum shifts and if stocks are still primed to move higher.

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