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Technology Stocks : Oracle Corporation (ORCL)
ORCL 236.10-1.9%3:59 PM EST
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To: MeDroogies who wrote (16687)4/10/2002 6:56:33 PM
From: Night Writer  Read Replies (1) of 19079
 
ADX is an historic indicator. It is used to recognize a trend and indicate how far the trend has advanced. It is somewhat difficult to explain, because the ADX line doesn't move in the direction of the stock price.

The ADX line moves up when there is a trend. The trend can be up or down. It makes no difference.

ADX will move side ways when a trend has ended. This is handy to reduce or eliminate market noise from the price trend.

The ADX line will move down when the trend reverses. Again the trend can be up or down. It makes no difference.

Then things get a little tricky. At some point after a trend reversal, the ADX line will start moving up to indicate the start of a new trend. The trend could be up or down, so you have to pay attention to the price to determine what is going on.

The ADX number is used to judge if a stock is oversold or over bought. 30 seems to be a common area for that. However, ORCL isn't cooperating with the 30 theory on this swing.

I'm new to ADX. So anybody, feel free to correct me or fill in gaps here. I tried using it before and didn't like it. I'm back trying it out again. It now makes sense to me when I'm looking at the price chart and ADX line. However, this note might not be clear.
NW
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