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Delta Air Lines Inc. (NYSE: DAL) technicals should not be ignored

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In the spirit of strong objective analysis, we are going to take a close look at Delta Air Lines Inc. (NYSE: DAL) from a technical chartist point of view today.

In short, technical analysis assumes that all publicly available facts about a stock are already discounted by knowledgeable buyers and sellers. And it is from there that the real work begins: examining the stocks behavior on the chart.

As such, we will begin with a quick check of the primary oscillators: the 14-day Relative Strength Indicator (RSI) and the 20-day fast stochastic. Both of these measures report on the degree to which a security is overbought or oversold ie, whether it has gone too far too fast in one direction or the other, and some kind of mean-reversion is called for. In each case, an indicator score of above 75 is considered overbought, while a score under 25 is considered oversold. In the case of Delta Air Lines Inc., the 14-day RSI stands at 72.76%, while the past month of action shows a score of 85.79% on the fast stochastic.

Well, what if we now look away from mean-reversion and towards the concept of trend That comprises our next step. To do this, we will start off by examining the most common systematic technical method of determining the direction of long-term trend in a stock: moving averages.

In the most basic sense, we can see that DAL has recently been exhibiting a bearing on the chart that suggests an overall bearish mode of behavior. This read comes from a look at the relative positioning of the 50-day and 200-day simple moving averages: if the 50-day is trading above the 200-day, momentum is to the upside making a bull case for trend; if the 50-day is trading below the 200-day, momentum is to the downside, making a bear case for trend. In this example, that system makes a bearish case, which naturally implies a negative money flow scenario for the stock.

So, we’ve spent some time looking at price as a factor. But what about volume In fact, many technicians view volume as more important than price. Volume defines the total level of participation involved in a stock. Its a coefficient of meaning that should be metaphorically multiplied times price action to equal conviction. In this case, we want to examine relative volume measures to get a feel for interest in the stock of late. Right now, this stock has been showing weak relative volume, which indicates lack of interest among those making a market for shares of the stock.

Next, we will turn to key levels. We always like to start this with a look at the key Fib levels. Fib refers to Fibonacci, which is the number series that works toward a ratio limit of the Golden Ratio, often found as a key in nature as well as markets. In this case, the critical 38.2% level drawn off the 52-week low of $37.91 sits at $44.72. DAL also has additional resistance above at the stocks 200-day simple moving average, which sits at $ 49.33.

While price action, trends, and volume are important, for traders, volatility may be as important as anything in defining the potential opportunity in a stock. Hence, we want to take a moment and consider this stocks overall range of movement, as well as its relative performance.

DAL has moved $+4.73 over the past month or so. Over the trailing 100 days, the stock is outperforming the S&P 500 by 2.92%. This movement has come on a more volatile bearing from one day to the next relative to the broader market, according to the stocks 36-month beta. Similarly, we can see that the stocks recent action has come on a historical volatility score of 24.24%. To get that score, one has to take the standard deviation of returns for a random trading input assuming buying the stock at a given average price during the specified period.

On a more basic level, one might look at the 20-day ATR as a percentage of its 20-day moving average. That measure gives us a volatility score of 2.25%. Naturally, we will continue to keep close tabs on the stock and update this picture again soon.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Why Ocean Power Technologies, Inc. (OPTT) could boost your portfolio

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Stock of Ocean Power Technologies, Inc. (OPTT) opened today at $1.700 and are currently trading at $2.090 x 800. More than 37,782,295 shares have exchanged hands compared to an average daily volume of 446,140 shares. At the current pps, the market capitalization stands at 25.52M. Analyst are currently predicting a target of $6.00 for Ocean Power Technologies, Inc.

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Ocean Power Technologies, Inc. (OPTT) currently has a Beta value of 5.99. Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent.

Next, let’s take a look at Ocean Power Technologies, Inc current P/E ratio. Ocean Power Technologies, Inc. (OPTT) currently has a PE ratio of -0.92. PE ratio is an important parameter to look at when trading a stock mostly because it is easy to calculate. There are a couple of ways to calculate PE ratio either by dividing share price by earnings per share or dividing the market cap by net income. It is important to note that the earnings are usually taken from the trailing twelve months (TTM). Nevertheless, P/E tells us how much an investor is willing to pay for $1 of a company’s earnings. The long-term average P/E is around 15, so on average, investors are willing to pay $15 for every dollar of earnings. Another useful way to look at this: Turn the P/E ratio around to look at the E/P ratio, which when expressed as a percentage gives us the earnings yield. For instance: 1/15 gives us an earnings yield of 6.67%.

While we have already looked at Ocean Power Technologies, Inc beta and P/E ratio, the EPS cannot be ignored. Ocean Power Technologies, Inc EPS for the trailing twelve months was -2.23. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. Ocean Power Technologies, Inc is estimated to release its next earnings report on Dec 7, 2017 – Dec 11, 2017. It would be interesting to see how the earnings fair out considering the recent developments.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Spectrum Pharmaceuticals, Inc. (SPPI) finding value is an unloved sector

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Stock of Spectrum Pharmaceuticals, Inc. (SPPI) opened today at $19.22 and are currently trading at $21.47 x 1500. More than 15,542,648 shares have exchanged hands compared to an average daily volume of 1,304,304 shares. At the current pps, the market capitalization stands at 1.95B. Analyst are currently predicting a target of $19.00 for Spectrum Pharmaceuticals, Inc.

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Spectrum Pharmaceuticals, Inc. (SPPI) currently has a Beta value of 1.60. Beta is a measurement of a stock’s price fluctuations, which is often called volatility and is used by investors to gauge how quickly a stock’s price will rise or fall. A stock with a beta of greater than 1.0 is riskier and has greater price fluctuations, while stocks with beta values of less than 1.0 are steadier and generally larger companies. Beta is often measured against the S&P; 500 index. An S&P; 500 stock with a beta of 2.0 produced a 20 percent increase in returns during a period of time when the S&P; 500 Index grew only 10 percent. This same measurement also means the stock would lose 20 percent when the market dropped by only 10 percent.

Next, let’s take a look at Spectrum Pharmaceuticals, Inc current P/E ratio. Spectrum Pharmaceuticals, Inc. (SPPI) currently has a PE ratio of -21.01. PE ratio is an important parameter to look at when trading a stock mostly because it is easy to calculate. There are a couple of ways to calculate PE ratio either by dividing share price by earnings per share or dividing the market cap by net income. It is important to note that the earnings are usually taken from the trailing twelve months (TTM). Nevertheless, P/E tells us how much an investor is willing to pay for $1 of a company’s earnings. The long-term average P/E is around 15, so on average, investors are willing to pay $15 for every dollar of earnings. Another useful way to look at this: Turn the P/E ratio around to look at the E/P ratio, which when expressed as a percentage gives us the earnings yield. For instance: 1/15 gives us an earnings yield of 6.67%.

While we have already looked at Spectrum Pharmaceuticals, Inc beta and P/E ratio, the EPS cannot be ignored. Spectrum Pharmaceuticals, Inc EPS for the trailing twelve months was -1. Traders and investors often use earnings per share (TTM) to determine a company’s profitability for the past year. So in essence, EPS is the amount of a company’s net income per share of common stock. Earnings per share equal the company’s net income less any dividends paid on preferred stock divided by the weighted average number of common stock shares outstanding during the year. Spectrum Pharmaceuticals, Inc is estimated to release its next earnings report on Mar 7, 2017 – Mar 13, 2017. It would be interesting to see how the earnings fair out considering the recent developments.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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Could the bears take over Netflix Inc. (NASDAQ: NFLX) ?

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In the spirit of strong objective analysis, we are going to take a close look at Netflix Inc. (NASDAQ: NFLX) from a technical chartist point of view today.

In short, technical analysis assumes that all publicly available facts about a stock are already discounted by knowledgeable buyers and sellers. And it is from there that the real work begins: examining the stocks behavior on the chart.

As such, we will begin with a quick check of the primary oscillators: the 14-day Relative Strength Indicator (RSI) and the 20-day fast stochastic. Both of these measures report on the degree to which a security is overbought or oversold ie, whether it has gone too far too fast in one direction or the other, and some kind of mean-reversion is called for. In each case, an indicator score of above 75 is considered overbought, while a score under 25 is considered oversold. In the case of Netflix Inc., the 14-day RSI stands at 65.70%, while the past month of action shows a score of 92.11% on the fast stochastic.

Well, what if we now look away from mean-reversion and towards the concept of trend That comprises our next step. To do this, we will start off by examining the most common systematic technical method of determining the direction of long-term trend in a stock: moving averages.

In the most basic sense, we can see that NFLX has recently been exhibiting a bearing on the chart that suggests an overall bullish mode of behavior. This read comes from a look at the relative positioning of the 50-day and 200-day simple moving averages: if the 50-day is trading above the 200-day, momentum is to the upside making a bull case for trend; if the 50-day is trading below the 200-day, momentum is to the downside, making a bear case for trend. In this example, that system makes a bullish case, which naturally implies a positive money flow scenario for the stock.

So, we’ve spent some time looking at price as a factor. But what about volume In fact, many technicians view volume as more important than price. Volume defines the total level of participation involved in a stock. Its a coefficient of meaning that should be metaphorically multiplied times price action to equal conviction. In this case, we want to examine relative volume measures to get a feel for interest in the stock of late. Right now, this stock has been showing strong relative volume, which indicates interest among those making a market for shares of the stock.

Next, we will turn to key levels. We always like to start this with a look at the key Fib levels. Fib refers to Fibonacci, which is the number series that works toward a ratio limit of the Golden Ratio, often found as a key in nature as well as markets. In this case, the critical 38.2% level drawn off the 52-week high of $204.38 sits at $168.59. NFLX also has additional resistance above at the stocks 200-day simple moving average, which sits at $ 158.48.

While price action, trends, and volume are important, for traders, volatility may be as important as anything in defining the potential opportunity in a stock. Hence, we want to take a moment and consider this stocks overall range of movement, as well as its relative performance.

NFLX has moved $+13.80 over the past month or so. Over the trailing 100 days, the stock is outperforming the S&P 500 by 16.67%. This movement has come on a more volatile bearing from one day to the next relative to the broader market, according to the stocks 36-month beta. Similarly, we can see that the stocks recent action has come on a historical volatility score of 32.41%. To get that score, one has to take the standard deviation of returns for a random trading input assuming buying the stock at a given average price during the specified period.

On a more basic level, one might look at the 20-day ATR as a percentage of its 20-day moving average. That measure gives us a volatility score of 2.49%. Naturally, we will continue to keep close tabs on the stock and update this picture again soon.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of argusjournal.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please click HERE

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