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Cramer shares the unusual signs that mean a stock is ready to explode

“Technicals and fundamentals are Jim Cramer’s key tools for determining when a stock is ready to explode” writes Elizabeth Gurdus for cnbc.com. But the inverse can also be true, as a stock can also fall so fast that investors should expect it to snap back because it is technically oversold.Investors can determine whether a stock is overbought or oversold by charting the ratio of higher closes, also known as the relative strength index, or RSI. This is a momentum oscillator that measures the direction of a given stock and the velocity of its move.”Typically, when a stock gets overbought, it is ripe for a pullback because overbought stocks, ones with many buyers reaching to take in supply, tend to snap back after they have gotten too far away from their longer term trend line,” the “Mad Money” host said.
 
Source: cnbc.com



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