Sentiment Indicator Slides For These 5 Stocks
Estimize | Jan 20, 2017 12:06AM ET
Each week Forcerank administers a handful of contests designed to answer one simple question: will stock ABC perform better than stock XYZ this week? After extensive testing, we confirmed that the consensus rankings delivered a high persistence of accuracy. Using a market neutral strategy the data produced 19% annualized returns with a resounding 2.75 Sharpe Ratio. By looking at changes in the data, Forcerank acts as a sentiment indicator that can help investors gauge the market’s mood on a weekly basis.
Delta Airlines (NYSE:DAL) | Airlines: Last week Delta (DAL ) reported mixed fourth quarter results, beating the Estimize consensus on the top line but missing earnings estimates by 2 cents. Analysts forecasted for a strong quarter after initial reports claimed PRASM and other key financial metrics would perform well, but it appears the rise of discount retailers have made a bigger impact. Shares are now down about 3% since its report, with signs of a continued pull back on the horizon. A bearish crossover in the MACD along with a 3 month volume profile consistent with a sub $40 price per share point to additional downside. It also doesn’t bode well that fellow major airliner, United Continental Holdings Inc (NYSE:UAL), crushed its Q4 numbers when Delta had its troubles.
Skechers USA Inc (NYSE:SKX) | Apparel: Skechers' (SKX ) ups and down lately are difficult to follow, unless of course you use the Forcerank consensus data. Lo and behold this week’s sentiment indicator points to a shift to the downside. The stock declined 2.5% in the past 2 days on a technical breakdown to start the week. A bearish crossover in the MACD along with a bounce off the monthly pivot point signal weak price action. Meanwhile the open gap at $23 per share represents an 8% downside from the current trading price. The company views Asia and additional endorsement deals as a way to revive fundamentals and therefore share prices, but in the meantime investors can come to expect more of the same.
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Amazon (NASDAQ:AMZN) | Ecommerce: Investors favorite stock of 2016 might be headed for a rough patch. The Forcerank consensus data pegged Amazon (AMZN ) as one of the strongest shorts this week given the stock’s recent run. At a price of nearly $807 per share, the stock currently trades in overbought territory above the upper Bollinger Band. Meanwhile the 6 month volume profile and an open gap at $760 call for a 5-6% pullback. Given its strong fundamental support of late along with a growing list of products the pipeline, investors shouldn’t expect a long lived downturn.
Box Inc (NYSE:BOX) | Enterprise Technology: Shares of Box (BOX ) climbed last week after Wells Fargo initiated coverage with an outperform rating. After a week of gains, though, it’s common to see a stock pull back as is the case with Box. The gap formed last week at about $14.75 along with a 14 day RSI above 75 signal weak price action on the horizon. Meanwhile, Box historically performs poorly around earnings season due to its inability to turn a profit or accelerate revenue growth. Initial estimates from Estimize suggest fourth quarter results will be unable to reverse this ongoing trend.
Chipotle Mexican Grill (NYSE:CMG) (CMG ) to neutral from overweight citing concerns over compressed margins, increasing labor and commodity costs and generally lower demand. The burrito chain kicked off 2017 with a smooth start but it didn’t take long for it to hit a rough patch. A slew of fundamental concerns plus a lack of technical support only spells trouble for shareholders. The stock continues to move from the upper Bollinger Band to the middle as it closes in on a $370 gap below. After calling for a buy at the end of 2016, the Forcerank Sentiment Indicator returned to the standpoint of selling Chipotle in the near term.
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