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Things investors didnt know about Digital Realty Trust Inc. (NYSE: DLR)

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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 Digital Realty Trust, Inc. (DLR).

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 strong relative volume, which indicates interest among those participating in the market for shares of DLR 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. DLR has moved -7.02 over the past month or so. Over the trailing 100 days, the stock is underperforming the S&P 500 by 4.51. As to the point of beta, we can see the stock has been generally moving less 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 20.81%. 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 1.8%.

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 DLR, that adds up to a bullish designation, which suggests that flows have been working in an overall positive 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 DLR, the 14-day RSI shows a score of 55.19%, while the 20-day fast stochastic shows a score of 43.24%.

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 Digital Realty Trust, Inc. (DLR), the critical 38.2% level drawn off the 52-week high of $127.23 sits at $111.34. DLR also has additional resistance above at the stock’s 200-day simple moving average, which sits at $ 111.51.

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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Quick Update On Cisco Systems, Inc. (CSCO) Beta Values

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Stock of Cisco Systems, Inc. (CSCO) opened at $43.46 and last traded at $43.30 x 1000. More than 15,362,007 shares exchanged hands compared to an average daily volume of 24,839,490 shares. At the current pps, the market capitalization stands at 208.406B.

Cisco’s comprehensive cloud-based security endpoint portfolio provides advanced malware protection, internet security, and enterprise mobility management

Fundamentals you simply cannot ignore

Investors try to use stocks with high beta values to quickly recoup their investments after sharp market losses. Cisco Systems, Inc. (CSCO) currently has a Beta value of 1.07 . 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 Cisco Systems, Inc current P/E ratio. Cisco Systems, Inc. (CSCO) currently has a PE ratio of N/A. 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 Cisco Systems, Inc beta and P/E ratio, the EPS cannot be ignored. Cisco Systems, Inc EPS for the trailing twelve months was -0.29. 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. Cisco Systems, Inc is estimated to release its next earnings report on 7 / 2018 (N/A-Not know at this time). It would be interesting to see how the earnings fair out considering the recent developments.

The Analyst Chirp:

Cisco Systems, Inc. (CSCO) has received an average target price from analysts of $48.96 amounting to a recommendation rating of Overweight. That comes from 32 different analysts. Perhaps, the driver for that assessment comes from the company’s valuations. Right now, we are looking at a median price-to-earnings ratio for this calendar year of 16.87. To give a sense of trend, the same data point on the estimate for next year is currently sitting at 15.11 times earnings. Drilling down a bit further, this quarter, we are looking at an average estimate from analysts for earnings per share level of 28.00. That shift to 26.00 heading into next quarter.

Other Stocks in same sector as Cisco Systems, Inc. (CSCO):

Other notable stocks in similar sector as to Cisco Systems, Inc. (CSCO) to consider are {{companyAbbrExt_1}}, {{companyAbbrExt_2}}, {{companyAbbrExt_3}} that last traded at ${{Bid_1}}, ${{Bid_2}}. ${{Bid_3}} respectively.

 

 

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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Is BlockChain Mania 2.0 Ready to Roll Again? (GCAP, XALL, OSTK)

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For traders and investors involved in the markets and focused on cryptocurrency, the blockchain, and Bitcoin, the month of April has certainly been a welcome relief. The price of Bitcoin rallied during the month nearly 50%, carving out what may turn out to be a key double bottom confirmation of support. Naturally, enthusiasm for blockchain related projects has begun to recover powerfully during this period.

In that spirit, we want to take a look at several stocks that could be poised to benefit from this rejuvenated enthusiasm given recent action and catalysts.

 

GAIN Capital Holdings, Inc. (NYSE:GCAP) has to be on this list as an interesting play on this renewed momentum in the space.

The company provides innovative trading technology and execution services to retail and institutional investors worldwide, with multiple access points to OTC markets and global exchanges across a wide range of asset classes, including foreign exchange, commodities, and global equities. GAIN Capital is headquartered in Bedminster, New Jersey, with a global presence across North America, Europe, and the Asia Pacific regions.

GCAP shares have been outperforming most blockchain related plays over the past 6 weeks. The stock continues to hold onto upward momentum in place since late March. Since its lows under $6.50 per share last month, we have seen a rally in the stock of over 30% on strong volume to retake all of its major moving averages on the bullish side and break out to new multi-month highs. At this point, traders are looking for signs that the stock will be able to hold onto its recent gains and breakout even higher.

 

Xalles Holdings Inc. (OTCMKTS:XALL) is another stock that needs to be watched closely here. If you’re looking for a potential emerging leadership play, then you want to look for companies that have recently made acquisitions to take them into direct operational integration within the blockchain phenomenon. In broad strokes, this is a company committed to the goal of becoming a dominant Fintech Accelerator by providing payment systems through its subsidiaries and partner companies.

 

The company recently executed a Share Purchase Agreement for the acquisition of BlockForge Inc., a blockchain design, development, and implementation firm. This is particularly important given the recent resurgence of enthusiasm for blockchain, cryptocurrency, and Bitcoin over the past 2-3 weeks. The company’s approach, according to its materials, is to roll up strategic acquisitions that are launching financial supply chain solutions to under-served markets. The focus will be on solutions for the business and Government markets. The goal is to capture recurring revenue streams through services, audit recovery fees, and revenue sharing licenses.

 

The stock has currently been establishing potential support around the $0.20-$0.25 per share level. This issue hasn’t been trading for long, but the initial action suggests a potential RSI-related bounce setup in play already, as initial liquidity establishes itself and the world becomes acquainted with this interesting story. We would also note that the company recently announced the restructuring of its common stock and the completion of additional debt reduction, which could force the issue in favor of the bulls before long. According to the release, Xalles recently took measures to reduce the number of outstanding shares of common stock by more than 69%.

 

Overstock.com Inc (NASDAQ:OSTK) is a stock you probably know as an online retailer based in Salt Lake City, Utah that sells a broad range of products at low prices, including furniture, décor, rugs, bedding, and home improvement. However, in addition to such goods, the company has started to move aggressively into the blockchain space over the past year, and its shares now trade far more on that business segment than on its retail business. It would appear as though shares of OSTK have been roughly mirroring the blockchain in Bitcoin trading action for the past month, with the stock pushing as much as 25% off its pivot lows in early April. After a stunning run higher last fall, where shares blasted from $15 to better than $80 per share, the stock has seen a sharp pullback in recent months culminating with a break under the $40 per share level, which also represented a break beneath the 200-day simple moving average.

However, recent action suggests a strong-handed bid entering the picture once again, which could indicate a possible test of major moving averages 10 – 20% above current levels.

 

 

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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Amazon.com Inc. (NASDAQ:AMZN) is a risky buy?

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It’s time to take an in-depth technical look at Amazon.com Inc. (NASDAQ:AMZN) . Our goal here today is to examine how the stock is behaving so we can use that examination as a lens through which to evaluate the stock as a possible investment opportunity.

Technical analysis is predicated on the idea that all important information is already interpolated by buyers and sellers of a security, so the only thing left to really interpret and predict the action is that behavior itself. For market timers, one of the most important tools we have at hand is the key indicators that show whether the stock is stretched in one direction or the other too much, too far, or too fast. In other words, is the stock overbought, oversold, or somewhere in the middle?

For that, we first turn to the RSI measure. The 14-day RSI is the standard flag-bearer for this type of analysis. Right now, for Amazon.com Inc., the measure stands at 54.77%. That shows where the stock is as far as the degree to which it is becoming overbought or oversold relative to its price history.

If we look at other overbought/oversold oscillators, we can get even more perspective. The stochastic measure is a good example. Right now, the stock over the past month of action shows a score of 58.08% on the 20-day fast stochastic.

In an even broader sense, NASDAQ: AMZN has recently been showing trading action that suggests an overall bearish posture on the chart according to trend-related measures such as a major moving average. In this case, we are looking at the relative positions of the 50-day and 200-day simple moving averages. The implication, of course, is that money is generally treating this stock in a negative manner in terms of capital flows.

Next, we want to look at participation levels. Our conviction on a stock in terms of its technicals is almost entirely subject in the end to the type of volume of trade we see going on in the stock. Patterns of action gain meaning strictly through volume levels. In other words, you need plenty of people playing the game for the score to matter. At this point, relative volume measures have been strong, indicating interest among traders, investors, and money managers for the stock over the past month. As it stands at present, the stock might find important action around key levels on the chart, which is something else we like to take a close look at.

One of the best ways to define key levels is through derivations built off of the Fibonacci series. This is widely used by professional firms in the market. The Fibonacci series is a set of numbers derived from adding the prior number to the next one: 0,1,1,2,3,5,8,13,21,34, etc. You will note that each number is the sum of the prior two numbers. The series has been found to exemplify the mathematics underlying many growth systems. The ratio of one number to the next in the series approaches 61.8% (or 38.2%, depending on which direction you move) as a limit. In markets, the key levels are often played at retracements defined by this ratio and its associated connections. In this case, the critical 38.2% level drawn off the 52-week low of $912.11 sits at $1,181.58. NASDAQ: AMZN also has additional resistance above at the stocks 200-day simple moving average, which sits at $ 1,201.49.

So far, we have looked at oscillators, moving average trends, and participation levels. However, sometimes, there is information carried in simply the degree of movement in a stock. For example, over the past trading month, NASDAQ: AMZN has made a move of +86.28. By comparison, over the trailing 100 days, the stock is outperforming the S&P 500 by 28.48, and its gotten there by action that has been more volatile on a day-to-day basis than most other stocks on the exchange.

Obviously, that tells us a ton about this name. To even drill down deeper into the movement, we can see that the stocks recent action has come on a historical volatility score of 38.54%. That number is derived from the standard deviation of returns of some hypothetical trader buying the stock at a given average price during the specified period. If we want to look at the range of action in a simplistic sense, the best way is to use the average true range over the most common reference time period, so we are staying on the same page with the market. In this case, the 20-day ATR as a percentage of its 20-day moving average comes in at 4786%.

We plan to update our take on this stock as its pattern of behavior progresses from here.

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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