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Relative Strength Index is an overbought/oversold indicator that attempts to predict trend reversal points. RSI is based on the observation that a stock which is advancing will tend to close nearer to the high of the day than the low. The reverse is true for declining stocks. This indicator can also be used when comparing two different equities on a relative basis. RSI’s absolute levels are 0 and 100. Buy signals are triggered at 30, and sell signals are triggered at 70. One of the important aspects of RSI is to look for divergence between price action and RSI. Upward sloping price and downward sloping RSI should be taken as a warning.

A broad category of transactions that involves one security on the stock list being replaced by another security or securities.

See Market Capitalization.

The difference between the total of assets and liabilities shown on a company’s balance sheet. Book value is the shareholders equity divided by the number of outstanding shares.

A type of listing transaction, made after an issuer’s original listing, that involves the listing and posting for trading of a new issue of securities. Typically, this involves the listing of preferred shares, rights, warrants, or debentures. Supplemental also covers the additional listing of when-issued shares through a secondary offering of an issue that is already listed.

dividend yield of a stock compared the dividend yield of the S&P 500.

A brisk rise in the general price level of the market or price of a stock.

The total number of shares issued by a corporation.

Orders which must trade under special conditions. For example, a cash order will be settled sooner than the usual three-day settlement period.

Support levels are levels where a declining stock will find bottom and bounce up from. Supports are formed when a stock breaks above resistance and holds above that level: the old resistance then becomes support. Support levels are also formed when a stock spends a lot of time at one level and then breaks upward. The level that the stock spent most of the time at will most likely act as support. Key moving averages, such as the 18, 50, and 200, also act as support. We like to buy stocks as they bounce upward off of support levels and are backed by good money flow and buying.