Global stocks: Buy signal from price formations for two US stocks

Published September 11, 2019

The S&P 500 index moved more or less sideways in Tuesday's trade and closed at 2979.39 points. This level is only 47 points shy of its all time high close in July this year. To look at the broader picture and measuring the optimism among short and long term investors, Investtech has its own tool called the Hausse index.

The Hausse indices are indicators of optimism. In short, they show the ratio of investors who are positive in the market. Hausse1 for short term investors and Hausse2 for medium term investors.

In the given table above, it can be easily seen that both the short and long term investors have a positive outlook of the market. In the past one week, the percentage of optimists for the short term trading range has gone up by 16 points, from 58 to 74. And for the long term investors, there has been a decent gain of 3 points, from 51 to 54.

As you all know, Investtech has invested a lot of resources in research (for the most part in the Nordic markets) over the past 20 years so that our readers and users of technical analysis can get a better understanding of what happens and what kind of return  they can expect if the price is inside a trend channel (rising or falling), or if it has given a breakout from a price formation like rectangle, double top/bottom and head and shoulders formations.

Today I am sharing long term charts of two US listed stocks that have given breakouts from price formations. In the analysis itself I mention what kind of return could be expected if one decided to invest in the stock.

Western Digital Corp. (WDC.US500) Close: 62.27

Western Digital Corp. has broken the ceiling of the falling trend in the long term and has given a positive signal from a double bottom formation by a break up through the resistance at 55.39 dollars. Further rise to 75.11 dollars or more is signalled.

On two different occasions the stock previously gave price breakouts, buy from an inverted head and shoulders and then a sell from a head and shoulders formation. This time it is the double bottom formation and based on Investtech's research: Buy signals from double bottom formations identified in Investtech’s long term charts have historically given increasing prices in the following months. On average, stocks that triggered buy signals have risen 11.3 % in the following three months and 28.8 % annually (see table below). This is 8.1 and 16.2 percentage points better than index respectively, which rose 3.2 % and 12.6 % in an average 3 month period.

There is resistance around 77 and 93 dollars respectively. Support is between 55 and 53 dollars in the short to medium term. Positive volume balance indicates that buyers are aggressive while sellers are passive, and strengthens the stock. The stock is overall assessed as technically weak positive for the medium to long term only because the uptrend in the the stock is not yet established. Higher tops and higher bottoms will confirm an uptrend.

There is volatility risk in the stock with average monthly volatility of 21 per cent.

Investtech's outlook (one to six quarters): Weak positive

Duke Energy Corp. (DUK.US500) Close: 93.94

Duke Energy Corp. is in a rising trend channel in the medium and long term. Rising trends indicate that the company experiences positive development and that buy interest among investors is increasing.

The stock has given a positive signal from rectangle formation by a break up through the resistance at 92.50 dollars both in the medium and long term charts. Further rise to 99.95 or more is signalled. The stock has support at $ 91.00.

Buy signals from rectangle formations identified in Investtech’s long term charts have historically given increasing prices in the following months. On average, stocks that triggered buy signals have risen 8.1 % in the following three months. This is much better than index, which rose 3.2 % in the same period of time (table given below).

The short and medium term momentums of the stock are strongly positive, with RSI above 70. This indicates increasing optimism among investors and further price increase for Duke Energy Corporation. The stock is overall assessed as technically positive for the medium and long term.

Investtech's outlook (one to six quarters): Positive

Today's analyses focus on the medium to long term. The analyses are based on closing price as per September 10, 2019.

Note: The research results mentioned in the article are based on four Nordic markets (Norway, Sweden, Denmark, Finland) and do not guarantee any replication of returns for other markets. 

These instruments are traded in currency based on the Exchange or country they are listed on.

Verfasst von

Kiran R. Shroff
Analyst
Investtech

"Investtech analysiert die Psychologie des Marktes und macht Ihnen täglich konkrete Tradingvorschläge."

Espen Grønstad
Partner & Senior Advisor - Investtech
 


Die Anlageempfehlungen werden von Investtech.com AS ("Investtech") ausgearbeitet. Investtech übernimmt keine Haftung für die Vollständigkeit oder Richtigkeit der jeweiligen Analyse. Ein etwaiges Engagement aufgrund der aus den Analysen resultierenden Empfehlungen/Signale erfolgt zur Gänze für Rechnung und Risiko des Anlegers. Investtech haftet nicht für Verluste, die sich direkt oder indirekt infolge der Nutzung von Investtechs Analysen ergeben. Angaben zu etwaigen Interessenkonflikten gehen stets aus der Anlageempfehlung hervor. Weitere Informationen zu Investtechs Analysen finden Sie unter disclaimer.


Die Anlageempfehlungen werden von Investtech.com AS ("Investtech") ausgearbeitet. Investtech übernimmt keine Haftung für die Vollständigkeit oder Richtigkeit der jeweiligen Analyse. Ein etwaiges Engagement aufgrund der aus den Analysen resultierenden Empfehlungen/Signale erfolgt zur Gänze für Rechnung und Risiko des Anlegers. Investtech haftet nicht für Verluste, die sich direkt oder indirekt infolge der Nutzung von Investtechs Analysen ergeben. Angaben zu etwaigen Interessenkonflikten gehen stets aus der Anlageempfehlung hervor. Weitere Informationen zu Investtechs Analysen finden Sie unter disclaimer.

Titlex

OK
+

Samtykke

Vi bruger cookies for at give dig en bedre brugeroplevelse. Hvis du fortsætter med at bruge hjemmesiden, accepterer du dette. For yderligere detaljer klik her.

Vores brug af cookies

Når du bruger vores hjemmeside, gemmer vi en cookie på din enhed. Cookien bruges til at genkende din enhed, så dine indstillinger fungerer, når du bruger vores hjemmesider. De oplysninger, der opbevares, er fuldstændig anonymiserede. Cookies slettes automatisk efter en vis tid.

Nødvendige cookies

Investtech bruger cookies til at sikre grundlæggende funktioner som sidenavigation og sprogvalg. Uden sådanne cookies fungerer hjemmesiden ikke, som den skal. Du kan derfor ikke tage forbehold mod disse. Hvis du stadig ønsker at deaktivere sådanne cookies, kan du gøre det i dine browserindstillinger. I sektionen Cookies tilføj denne hjemmeside til listen over websteder, der ikke har tilladelse til at gemme cookies på din enhed.

Cookies fra Google

Vi bruger tjenester fra Google Analytics og Google AdWords. Disse registrerer cookies på din enhed, når du besøger vores hjemmeside. Google registrerer din IP-adresse for at føre statistik over brugeraktivitet på hjemmesiden. IP-adressen er anonymiseret, så vi ikke har mulighed for at knytte aktiviteterne til en bestemt person. Vi bruger disse statistikker til at kunne tilbyde mere interessant indhold på hjemmesiden og til konstant at forbedre os. Google AdWords indsamler data, så vores annoncering på andre hjemmesider giver bedre resultater. Vi kan ikke spore enkeltpersoners data.

Tillad cookies fra Google