The Average Directional indicator (or ADX) is a directional trading indicator that is used to identify a technical trend, in this case of the Velas. The trend that is being identified, can be both a positive trend as a negative trend in the pricedevelopment of Velas.
The ADX was primarily developed for commodities, however it is also in use for stock and currency technical analysis, as well as for Velas. In this continuously updated article, we will explain the meaning and current trend of Velas. The current ADX analysis is based on the historical prices of Velas until January 28th, 2022.
In the chart below, the strength the trend is drawn, as well as the positive and negative directional indicators. The ADX (Average Directional Index) is the black line. The positive directional indicator (+DI) is the green line, and the negative directional indicator (-DI) is drawn in red.
In the chart above, the development of the price for Velas is shown for the period from 07/28/2021 until 01/28/2022. This same timeframe has been used in the average directional indicator chart below.
In the charts above, you can see the trends of the ADX, +DI and -DI. The current values of these three indicators for the Velas are listed in the table below.
|Velas average directional index||21.91|
|Velas positive directional indicator||58.68|
|Velas negative directional indicator||27.25|
Several signals can be gained from the chart above. First of all, the green line gives us an indication of the positive trend. The opposite line, the red one, indicates the negative trend for Velas.
When the green line tops the red line, the Velas is in a positive trend. However, when the situation turns around, the trend has also changed to a negative trend for Velas.
Furthermore, the black line gives the strength of the current trend of Velas, both positive and negative. The higher the black line (ADX), the stronger the trend.
Velas ADX score
The Average Directional Index (ADX) is used to measure the strength or weakness of a trend, not the actual direction. In general, when the positive directional indicator is higher than the negative directional in indicator, the trend of Velas is assumed to be positive. An important signal is when the -DI (red line) and +DI (green line) crosses over.
As you can see in the chart above, the Velas follows a positive trend. The positive directional indicator (58.68) is higher than the negative directional indicator (27.25). When this situation occurs, the trend can be identified as a positive trend for the Velas.
Allthough the trend is positive, the current situation of the trend of Velas is not that strong. The ADX gives us a value of 21.91, which means that the trend currently followed by Velas is a weak one. To get clear signals from the ADX for Velas, you should wait until the ADX moves upwards of 25.
As mentioned, the current trend is positive, however the trend might flip over to a negative trend.