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Finance,  Technology

When to buy DocuSign’s stocks (DOCU) for a profit? A technical analysis (March – April 2021)

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Note: The information in this article is NOT financial advice.

 

Outline

 

In what follows, you will find a date after which DocuSign’s stock (DOCU) price is likely to rise. DocuSign’s stock (DOCU) prices are plotted over time. Each price point is the average of prices over a day, and the window represents a year. Indicators, such as Bollinger Bands, Volume, RSI, and MACD, will be used to infer the likelihood of the price to rise. (TD Ameritrade’s thinkorswim platform is used.)

Bollinger Bands

bollinger bands - docusign stocks
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When the Bollinger Bands are placed against the stock prices, a pattern can be observed. This pattern can be used to infer when the stock price is likely to rise and drop. When the stock price touches or crosses the lower band, it eventually hits or crosses the upper band after some time (see image), and vice versa. Sometimes, the price only needs to gets close enough to either the lower or upper band to observe this pattern (see image). When the midline or mid-band of the Bollinger Bands has a positive (upward) trend, the price tends to stay above the midline, and when the midline or mid-band has a negative (downward) trend, the price tends to stay below the midline (see image).

Volume

volume - docusign stocks
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When the price crosses, touches, or nears either the lower or the upper band, there is an uptick in the volume chart (see image). The uptick may occur slightly after the price crosses, touches, or nears the lower or upper band. By an uptick, we mean a rise in the volume, where the volume for the day before and the volume for the day after the uptick are lower than the volume that causes the uptick.

Relative Strength Index (RSI)

rsi - docusign stocks
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Roughly, when the price rises, so does the RSI, and it goes down when the price drops (see image). When the value of the RSI nears 30, the price tends to cross, touch, or near the lower band, and when the value of the RSI nears 70, the price tends to cross, touch, or near the upper band. When the price crosses the upper Bollinger band and stays above it for some time and the upper and lower Bollinger bands are wider apart, the RSI stays above the 70 line for some time (see image). The trend of the RSI graph tends to coincide with the trend of the midline of the Bollinger Bands.

Moving Average Convergence Divergence (MACD)

macd - docusign stocks
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When the price has a positive (upward) trend, the cyan line of the MACD is above the yellow line, the farther apart these lines are (or the more they diverge), the more positive the price trend is. When the price trend turns negative (downward), the cyan and yellow lines meet (or converge) and cross each other, and the yellow line is above the cyan line; the farther apart they are, the more negative the price trend is.

When to buy DocuSign’s stocks (DOCU) for a profit?

buy order - docusign stocks
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On March 8th, 2021, DocuSign’s stock price started to rise back up and crosses the lower Bollinger band, and the RSI crosses back the 30 line, which suggests the price is likely to continue to rise; indeed, the price continued to rise, so did the RSI, and the lines of the MACD were converging, with the yellow line above the cyan line. However, on March 11th, the price started to drop, which was possibly due to the negative trend of the mid-band that had started slightly before March 8th. On March 30th, the price neared the lower band, and the price later started to rise again; the RSI has gone up after that date, and the MACD lines are diverging, with the cyan line now above the yellow line. Also, the trend of the mid-band has gone from downward to zero, which suggests there may be a change in trend. Indeed, on March 30th, the stock price was about 196.3 dollars and rose to 212.28 dollars on April 8th. The RSI is slightly above 50, the MACD lines are still diverging, and the price has just crossed the mid-band, possibly heading its way to cross the upper band, so the stock price may still continue to rise after April 8th, 2021.

Last Words

On April 8th, 2021, the indicators suggest that DocuSign’s stock (DOCU) price is likely to rise after that date.






 

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