Know Sure Thing (KST)

We like to stay on the cutting edge of trends. We’re all about knowing what’s hot and what’s not, so when it comes to investing, we love a good momentum oscillator. “A good who in the what, now?” some might be asking. A momentum oscillator is a tool that allows investors to see whether momentum around a certain security is gaining or slowing. One of our fave momentum oscillators is the Know Sure Thing, or KST.

This bad boy looks at four different time periods in the life of the security in question. It takes the rate of change (ROC) of each of those time periods, calculates the Simple Moving Average (SMA) of each, and then uses those calculations to determine whether or not an asset’s momentum is waxing or waning. When the KST is a positive value, momentum is rising; when it’s a negative value, momentum is dropping. By itself, this might not be completely helpful info, but when the KST is heading in a different direction than the actual price of the asset, then we have a good inkling that the security’s trend is about to change, and we can buy and sell accordingly.

And...being all trendy and current like we are, this is an invaluable part of our investment strategy.