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Does the recent activity on Goldman Sachs Group Inc. (NYSE: GS) predict bullish pattern ?

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We turn our attention to the charts today. Technical analysis. It’s the artistic side of the analysis. Here, we deal with lines and angles and patterns. Here, we try to listen to the market; to hear its opinion of a stock, quite independent of the seeming facts of the business. Here, we look to paint a picture, as it were. Today’s subject in this exercise is The Goldman Sachs Group, Inc. (GS).

Let’s start with a quick evaluation of relative volume measures. Here, we want to examine the degree to which traders, investors, and money managers are more or less interested over the past month in transacting in this security. At this point, this stock has been showing weak relative volume, which indicates lack of interest among those participating in the market for shares of GS over the past month. That sets us up to look at relative performance of the stock along with range and volatility measures. This boils down to the concept of what is known as “beta”.

First off, we can readily state the facts on relative performance. GS has moved +16.35 over the past month or so. Over the trailing 100 days, the stock is outperforming the S&P 500 by 6.28. As to the point of beta, we can see the stock has been generally moving more than the rest of the market on a day to day basis. That is according to the 36-month beta score. Another way to look at this is through taking the standard deviation of returns calculated as representing a hypothetical buyer of the stock at a random point at a given average price during the specified period. That gives us a historical volatility score of 13.70%. Finally, in this class of data, we can look at the 20-day ATR as a percentage of the 20-day moving average, which gives us a natural volatility score of 1.43%.

Now, it’s time to look at trend and extent of movement. From a certain point of view, these are the natural opposites in technical analysis. On the one hand, we know experienced traders and technical manuals teach us that “the trend is your friend.” However, at the same time, we know it’s wise to fade extreme, overdone movement. That posits a natural tension for analysts, and unfortunately, the best we can do is to look at the facts.

In the first place, the broad impact of money flows should be viewed through the tried-and-tested lens of moving average analysis. In this case, we look at the relative positioning of the 50-day and 200-day simple moving averages. In other words, if the 50-day moving average is trading above the 200-day, it is traditionally seen as a bullish chart trend. Conversely, if the 50-day moving average is trading below the 200-day, it is traditionally labeled a bearish trend or bearing. For GS, that adds up to a bearish designation, which suggests that flows have been working in an overall negative direction on the chart.

To counter that notion, we now turn to a look at mean reversion oscillators. Our key indicators of note attempt to score the action as to whether or not a security has pushed too far too fast, leading to a likelihood of some kind of reversion to the mean movement becoming highly probable.

There is a host of oscillating indicators that can offer up such an analytic perspective. We have learned to rely most on RSI and stochastics. Specifically, we look at the 14-day Relative Strength Indicator (RSI) and the 20-day “fast stochastic”. For both of these measures, if we see a score above 75 (overbought) or below 25 (oversold), history suggests one is wise to expect some reversion to the mean. For GS, the 14-day RSI shows a score of 67.87%, while the 20-day fast stochastic shows a score of 81.33%.

We close today’s analysis with a quick check of key levels. For our means, we like to quickly check the key Fibonacci retracement zone as well as the primary institutional long-term moving average (the 200-day simple average). In the case of is The Goldman Sachs Group, Inc. (GS), the critical 38.2% level drawn off the 52-week low of $165.51 sits at $199.75. GS also has additional resistance above at the stock’s 200-day simple moving average, which sits at $ 230.41.

Hopefully, this analysis has offered up some useful perspective. We will catch up with this stock 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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This info on The Gap, Inc. (GPS) could trigger a massive change in trading

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Stock of The Gap, Inc. (GPS) opened today at $27.04 and are currently trading at $27.45 x 1700. More than 2,154,449 shares have exchanged hands compared to an average daily volume of 5,789,596 shares. At the current pps, the market capitalization stands at 10.81B. Analyst are currently predicting a target of $26.47 for The Gap, Inc.

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. The Gap, Inc. (GPS) currently has a Beta value of 0.42. 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 The Gap, Inc current P/E ratio. The Gap, Inc. (GPS) currently has a PE ratio of 13.13. 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 The Gap, Inc beta and P/E ratio, the EPS cannot be ignored. The Gap, Inc EPS for the trailing twelve months was 2.1. 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. The Gap, Inc is estimated to release its next earnings report on Nov 16, 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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Schlumberger Limited (SLB) could lose another bull

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Stock of Schlumberger Limited (SLB) opened today at $63.15 and are currently trading at $62.79 x 200. More than 2,945,221 shares have exchanged hands compared to an average daily volume of 6,744,792 shares. At the current pps, the market capitalization stands at 86.81B. Analyst are currently predicting a target of $77.55 for Schlumberger Limited (SLB).

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Schlumberger Limited (SLB) currently has a Beta value of 0.82. 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 Schlumberger Limited (SLB) current P/E ratio. Schlumberger Limited (SLB) currently has a PE ratio of 491.97. 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 Schlumberger Limited (SLB) beta and P/E ratio, the EPS cannot be ignored. Schlumberger Limited (SLB) EPS for the trailing twelve months was 0.13. 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. Schlumberger Limited (SLB) is estimated to release its next earnings report on Jan 18, 2018 – Jan 22, 2018. 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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Time for a Turnaround at Finish Line for Xunlei Ltd. ADR (NASDAQ: XNET)

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Well-rounded due diligence on a stock should take into account a basic analysis of core company trends such as top-line and bottom-line performance, margins, analyst views, cash flows, and overall balance sheet health. But that’s not all. One must also take a dispassionate, professional survey of a stocks technical characteristics.

For that, we must turn to the chart. Todays object of technical analysis is Xunlei Ltd. ADR (XNET).

We will start our analysis by examining overall direction of trend. In the most basic sense, we can see that XNET has been working in a bullish posture on a larger timeframe, as indicated by the relative positioning of the 50-day and 200-day simple moving averages. In other words, if the 50-day moving average is trading above the 200-day, it is traditionally seen as a bullish chart trend. Conversely, if the 50-day moving average is trading below the 200-day, it is traditionally labeled a bearish trend or bearing. As noted, for XNET, that adds up to a bullish designation the main point being that we have money flows leaning in a generally positive direction for the stock.

Next, we will turn to our analysis of the primary oscillating indicators to assess the degree to which the stock is stretched in its movement at present. The key tools for this analysis are the 14-day Relative Strength Indicator (RSI) and the 20-day fast stochastic. In each case, the point is to measure overbought or oversold behavior ie, whether the stock has gone too far too fast in one direction or the other. If we see a score above 75 (overbought) or below 25 (oversold), history suggests one is wise to expect some reversion to the mean. For XNET, we can see that our 14-day RSI shows a score of 85.87%, while the 20-day fast stochastic reports a score of 87.62%.

Next, we will turn to key levels of interest on the chart, with an emphasis on Fibonacci retrace points, range extremes, and major moving averages. In this case, the critical 38.2% level drawn off the 52-week high of $7.15 sits at $5.61. XNET also has additional resistance above at the stocks 200-day simple moving average, which sits at $ 3.86.

We also want to look at relative performance and overall volatility scoring to understand value and risk in play. XNET has moved $+2.80 over the past month or so. Over the trailing 100 days, the stock is outperforming the S&P 500 by 93.92%. This movement has come on a less 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 92.48%. 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 7.17%.

Finally, we?ve spent some time looking at price as a factor in many forms and from many angles. But what about volume? Notably, many chartists see volume as more indicative for conviction in bearing or pattern than price measures, averages, or oscillators. Volume records the true degree of participation involved in a stock. If price pattern is like a word written on a word processor, volume is like the font size and punctuation. 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, and that should be seen as a key factor in drawing conclusions about your level of interest as well.

That wraps up todays analysis, but we will be sure to check back on this stock 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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