Daily Technical Opinion:
Time Frame: The daily technical opinion is used to help determine what should happen the following day or what could be the start of a short-term move.
Tools analyzed and cross-referenced: Volume, price movement, open relative to the closing price, gaps, key price reversals, candlestick charting, new hi price, new low price and more.
Description: The Daily Technical Opinion uses volume and price action along with other important tools to determine the future action of a stock. The volume bars at the bottom of the price chart represent the number of shares traded each day. Volume is important when determining whether a price action or move will continue or be short-lived. Quite often when a stock move is accompanied by above average volume, the stock will continue in that direction for the short-term. This is particularly true when an important support or resistance level is broken on high volume. If a stock move is accompanied by lighter than average volume, the move will many times be short-lived because the move lacks broad participation from the market.
Long-term fundamental target:
Time Frame: Next fiscal year
Tools analyzed and cross-referenced: The next fiscal year earnings estimates from wall street analysts provided by Zacks Research and S&P Comstock.
Description: Analysts predict targets for most stocks by estimating future earnings per share and then applying a price-to-earnings multiple: also known as the P/E ratio. Companies that typically outperform their peers receive the highest P/E multiples. We calculate long-term price targets for the next fiscal year by applying the stock's current multiple to the average professional analysts estimate for next year according to Zacks Research and S&P.
Tip: P/E ratios are not always a good factor to apply to a stock to find a target price. EGR or earnings growth rate is many times more accurate.
Fundamental analysis also helps you identify how many analysts follow the stock. This is a confidence tool suggesting that the higher number of analysts making projections, the more accurate those estimates will be. The best analysis tool is to use real-time past, present and projected yearly and quarterly earnings when determining a fair value. As general rules of thumb, most analysts determine how fast a company is expected to grow and then multiplies this growth rate by the actual estimate per share.
For example: A company is expected to grow 30% for each of the next two years and analyst's earning estimates for year 1 are $1.00 per share. Most analysts would multiply $1.00 by the growth rate of 30 to achieve a 12-month price target of $30 for the shares. Year two, analysts would multiply $1.30 by 30 giving the stock a two-year target of $39. The example given is a basic earnings model, but gives investors an idea of how it works. Quarterly growth is also important to follow to assure the company meets yearly expectations. A shortfall of analysts' expectations usually results in an analyst's revision or downgrade and stock depreciation. On a side note, the markets as a whole are valued higher than previous years, so many companies will be trading well above their growth rate. This is why technical analysis is so important to incorporate into stock analysis.
Fundamental analysis is obviously a helpful tool to justify the value or price of a company's stock. Fundamental analysis coupled with technical analysis for exit and entry points make a powerful combination.
Long-term Technical Opinion:
Time Frame: The long-term technical opinion is used to help determine what should happen over the next 3-months to a year. It is particularly accurate at pinpointing long-term trend changes before they happen.
Tools analyzed and cross-referenced: Trendlines, moving averages, stochastics, swing points, price movement, support and resistance levels, Fibonacci fans, new hi price, new low price and more.
Description: The long-term opinion uses many leading technical indicators designed to look at a 3-month to 1-year window. The analysis tools will confirm the direction of the long-term trend by applying multiple moving averages. Then it will apply fibonacci fans to look for important trend reversals, support or resistance levels to identify a trend change as or before it happens. The software will cross reference with the long-term stochastic indicator to determine whether the stock is in an overbought or oversold condition that could help predict a reversal in the near future. It is important to realize that stocks can remain overbought or oversold for extended periods of time without a pullback. The software only identifies a possible pullback or rebound if other indicators confirm it as well, such as trendlines, support and resistance levels, etc.
Short-term Technical Opinion:
Time Frame: The short-term technical opinion is used to help determine what should happen the over the next few days up to the next 90 days. It is particularly accurate at pinpointing short-term swings or reversals when used in conjunction with the asterisks on the chart that identify short-term tops / bottoms and buyers / sellers entering the stock or market.
Tools analyzed and cross-referenced: Volume, candlestick patterns, stochastics, moving averages, swing points, price movement, open relative to the closing price, gaps, key price reversals, new hi price, new low price and more.
Description: The short-term opinion uses many leading technical indicators designed to look at a 3-month window. The analysis tools will confirm the direction of the trend by applying multiple moving averages. Then it will apply candlestick patterns to look for important formations such as trend reversals, bearish or bullish patterns. The software will cross reference with the short-term stochastic indicator to determine whether the stock is in an overbought or oversold condition that could help predict a reversal in the near future. It is important to realize that stocks can remain overbought or oversold for extended periods of time without a pullback. The software only identifies a possible pullback or rebound if other indicators confirm it as well, such as volume, candlestick patterns, bar patterns, etc.
Short-term fundamental target:
Time Frame: Current fiscal year
Tools analyzed and cross-referenced: The current fiscal year earnings estimates from wall street analysts provided by Zacks Research and S&P Comstock.
Description: Analysts predict targets for most stocks by estimating future earnings per share and then applying a price-to-earnings multiple: also known as the P/E ratio. Companies that typically outperform their peers receive the highest P/E multiples. We calculate short-term price targets for the current fiscal year by applying the stock's current multiple to the average professional analysts estimate according to Zacks Research and S&P.
Tip: : P/E ratios are not always a good factor to apply to a stock to find a target price. EGR or earnings growth rate is many times more accurate.
Fundamental analysis also helps you identify how many analysts follow the stock. This is a confidence tool suggesting that the higher number of analysts making projections, the more accurate those estimates will be. The best analysis tool is to use real-time past, present and projected yearly and quarterly earnings when determining a fair value. As general rules of thumb, most analysts determine how fast a company is expected to grow and then multiplies this growth rate by the actual estimate per share.
For example: A company is expected to grow 30% for each of the next two years and analyst's earning estimates for year 1 are $1.00 per share. Most analysts would multiply $1.00 by the growth rate of 30 to achieve a 12-month price target of $30 for the shares. Year two, analysts would multiply $1.30 by 30 giving the stock a two-year target of $39. The example given is a basic earnings model, but gives investors an idea of how it works. Quarterly growth is also important to follow to assure the company meets yearly expectations. A shortfall of analysts' expectations usually results in an analyst's revision or downgrade and stock depreciation. On a side note, the markets as a whole are valued higher than previous years, so many companies will be trading well above their growth rate. This is why technical analysis is so important to incorporate into stock analysis.
Fundamental analysis is obviously a helpful tool to justify the value or price of a company's stock. Fundamental analysis coupled with technical analysis for exit and entry points make a powerful combination.
Buyers entering formation:
Time Frame: Generally a short-term pause in a downtrend or a reversal to the upside for a few days to many weeks.
Tools analyzed and cross-referenced: Volume, price movement, stochastic, open relative to the closing price, key price reversals, candlestick charting, new low price and more.
Description: A bullish buying formation identified by the combination of a bar reversal, a bullish engulfing candlestick pattern and an extremely oversold condition on the stochastic indicator. The buyers entering search or designation on the chart identified with a green asterisk is used to identify where stocks might reverse to the upside.
Tip: If the stock breaks below the low of this day, it will usually continue lower. Use this in the Smart Search with a daily technical buy to find stocks to buy.
Short-term bottom formation:
Time Frame: Generally a short-term pause in a downtrend or a reversal to the upside for a few days to many weeks.
Tools analyzed and cross-referenced: Volume, price movement, stochastic, open relative to the closing price, key price reversals, candlestick charting, new low price and more.
Description: The short-term bottom indication on the chart, identified by a white asterisk, refers to multiple indicators suggesting that the downside could be over for the short-term and the candlestick chart has formed a Bullish Harami pattern suggesting that the immediate preceding trend has subsided. In this case the downtrend could be stalled or over for the short-term. This could now be an important support level if the stock rebounds the following day confirming the bottom. If the stock can stay above this level for a few weeks and form support, it could be a good area to purchase the stock. If the stock breaks down through this support level it will probably continue lower to it's next support level, especially if the breakdown is on high volume.
Tip: If the stock breaks below the low of this day, it will usually continue lower. Use this in the Smart Search with a daily technical buy to find great stocks to buy.
Sellers entering formation:
Time Frame: Generally a short-term pause in an uptrend or a reversal to the downside for a few days to many weeks.
Tools analyzed and cross-referenced: Volume, price movement, stochastic, open relative to the closing price, key price reversals, candlestick charting, new low price and more.
Description: A bearish selling formation identified by the combination of a bar reversal, a bearish engulfing candlestick pattern and an extremely overbought condition on the stochastic indicator. The sellers entering search or designation on the chart identified with a red asterisk is used to identify where stocks might reverse to the downside.
Tip: If the stock breaks above the high of this day, it will usually continue higher. Use this in the Smart Search with a daily technical sell to find stocks to short.
Short-term top formation:
Time Frame: Generally a short-term pause in an uptrend or a reversal to the downside for a few days to many weeks.
Tools analyzed and cross-referenced: Volume, price movement, stochastic, open relative to the closing price, key price reversals, candlestick charting, new low price and more.
Description: The short-term top indication on the chart, identified by a white asterisk, refers to multiple indicators suggesting that the upside has exhausted for the short-term and the candlestick chart has formed a Bearish Harami pattern suggesting that the immediate preceding uptrend has subsided. In this case the uptrend could be stalled or over for the short-term. This could now be an important resistance level, especially if the stock drifts lower the following day confirming the top. If the stock can eventually retest this level and break up through the previous short-term top on above average volume, it should continue higher. If the breakout is on low volume or the stock immediately retreats following the breakout it is considered to be a false breakout and is considered weak.
Tip: If the stock breaks above the high of this day, it will usually continue higher. Use this in the Smart Search with a daily technical sell to find stocks to short.