Early warning

In the early warning service Investtech.com calculates the price levels that will trigger the next days buy and sell signals (signal levels). This gives you the opportunity to decidebeforehand what you want to do if a buy or sell signal is given and hence to act very quickly if this should occur. By using the early warning system you get an opportunity to act on the very same day that the signal occurs.
The early warning service specifies the closing price levels that will trigger different types of technical signals. If the closing price the next day penetrates the specified levels, Investtech.com's analyses will generate buy or sell signals. We emphasise that the closing price must penetrate the indicated levels in order for a signal to be given - if the level is only temporarily penetrated during the day, a signal will not be generated.
The table below shows an example of information from the early warning system. The text below the table explains how the information should be interpreted, and especially what will trigger buy and sell signals.

Table 1: Example of early warning for a company.

Price Patterns are specified with a support or resistance level. An upward penetration of a formation will trigger a buy signal and a downward penetration will trigger a sell signal. In addition, the objective or price objective for the share is specified for a penetration of the formation.
In table 1 an Inverted Head-and-Shoulder formation will give a buy signal if the price rises above 48.42. After a decisive penetration of this level, a further increase to 79.37 or even higher can be expected.

Short term and Long term Trading Range. These price levels indicate support and resistance levels and a penetration of these will give a sell or buy signal respectively. An upward penetration will give a buy signal and a downward penetration will give a sell signal.
Table 1 shows that a closing price higher than 49 will generate a buy signal for both the Short and the Long Term Trading Range indicator.

Moving Average: The price specification for moving average indicates when the short-term average has the same value as the long-term average. A penetration of this will trigger a buy or sell signal and can indicate a trend reversal.
Table 1 shows that a closing price lower than 12.47 will trigger a sell signal from Moving Average. A value of 0 would mean that it is impossible for the indicator to trigger a signal the next day (the price would have to be negative).

High RSI (Relative Strength Index) indicates when the share enters into or comes out of high positive momentum according to the indicator RSI-momentum. RSI above 70 shows strong positive momentum in the stock. The stock has risen in the short term, with few reactions downwards. Investors have continued to pay more to buy stocks. This indicates that more buyers are entering the stock and that the price will continue to rise. The use of RSI should be combined, however, with other observations.
In table 1 a closing price of 54.40 will give an RSI-value equal to 70 (the threshold value for high positive momentum ).

Low RSI indicates when the share enters into or comes out of high negative momentum according to the indicator RSI-momentum. RSI below 30 shows strong negative momentum in the stock. The stock has fallen a lot in a short time, without significant reactions upwards. Investors keep reducing the price to sell their stocks. This indicates that investors are leaving the stock, pessimism is increasing and the price will continue to fall. The use of RSI should be combined, however, with other observations.
In table 1 a closing price of 41.07 will give an RSI-value equal to 30 (the threshold value for high negative momentum).

Note that the indicated signal levels must be penetrated in order for a signal to be generated. If the closing price is equal to the signal level, the support or resistance level has not been penetrated and the analyses do not generate a sell and/or buy signal.