I always look at changes in working capital (on cash flow) it is something the market loves to latch onto but as well it contains data about the interface of the company with the economy, which reflects as well on the company's functionality.
I always look at the present quarter versus the quarter a year ago, as this is where a lot of near term share changes derive from. I won't comment further than this, since you should consult a professional for that kind of data analysis, but I would take account of the data elements here but as well note the positive COA and its sources.
The reason I am interested in this company is because of the patterns on its chart. Look at its lifetime chart, monthly intervals using candles. It slopes down, spikes down finds support a few times and then surges up. Note as well the volume has supported the rise.
The pattern seen on the chart is typical of a computer driven trade in forex as well. These happen within a day trade (I am saying patterns are not necessarily the point, it is what is within them). They tend to point towards a trend, for example the pattern this blog noted on USD/JPY. The point is there is an apparent mapping between the short term trades on forex and longer term investing decisions on stocks, if these are investing decisions. Typically those patterns have three flags in forex.
The reference in the present flag may be because of issues in the economy and/or the company's immediate interface with it (working capital) or because it is finding resistance at a whole number ($4) and found spike support at $3. But that resistance in early May at $4 exactly references the resistance in 2001. Again a phenomenon of the forex market this blog has explored. That resulted in a fall, but it referenced economic conditions.
Technically and in terms of the wider economy this is worth watching to see what happens next. This is most certainly neither a recommendation to buy or sell nor to hold, this blog does not make such recommendations, consult your broker.
This blog is interested in companies as computational elements in the market. The particular interest here is a comparison of chart data in stocks with forex, because of the precise way a company future performance can be measured. Remember chart patterns is about prediction. But is it predicting a state of the market influenced by the forex market and money flow or the company. This is another test of the effect of the conduit.
It does seem possible that good companies can break free of this gravity well, which is what the conduit is making the market (the constraint on share values slopes seen across a variety of companies). That capacity I might tentatively suggest may be signs of that real recovery.
© 2010 Guy Barry - All Rights Reserved.
