Stock Analysis - JayceeDeGuzman.com

NOW CORPORATION ($NOW)’s price has increased by more than 63% when it breached the previous resistance at 1-apiece last March 31, 2016. Is it still okay to chase $NOW’s price? The common answer you’ll get when you ask this question is “Do not chase the price.”

The advice that anyone gives to you is based on his or her personal risk tolerance. If he advises you not to chase the price of $NOW, that means his may not have found his reward-to-risk ratio profitable. He may have found the possible risk bigger than the potential reward.

On the other hand, if the advice you got is “Yeah, hop in. Enjoy the ride”, that means that person must have a bigger risk tolerance than  the previous person. It is also possible that he has a bigger target price than the previous person. They both interpreted their data uniquely.

Bottom line is, it will depend on your personal risk tolerance and your reward-to-risk ratio. The other people can only present facts and their personal interpretation of what’s happening. At the end of the day, you decide for yourself based whether you’re bullish or bearish with the facts you’ve read or heard. In the Stock Signals, my clients are on top of this.

Asking the question “What would you have done had you been in my case?” may sound wise and helpful. In reality, it is not. No matter how bullish or bearish the answer you’ll get, again, that’s based on the person’s own risk tolerance and circumstances, and not on yours. So ask for facts, quantify, and decide for yourself.

In the Stock Signals, we’re critical-thinkers. We don’t live by spoonfeeding. There may be some young traders (newbies) but we don’t use that as an excuse not to become a critical-thinker.

Here are facts about $NOW.

Volume

Volume has shown strength since the last week of March 2016. As far as my metrics are concerned, I prefer to see a stock with a volume that is above its 30-day volume average.

NOW - Volume

Foreign Flow

Last Friday’s P6.6M Net Foreign Buying was the first 7-digit NFB registered for $NOW in 2016. That’s another sign of bullishness.

NOW - Foreign Flow

Top 10 Players

From March 1, 2016 to April 4, 2016 at 12 noon, here’s the Top 10 Players’ chart.

  • 8 out of 10 have a positive Net Amount: bullish
  • 6 out of 10 have a bigger Buy Ave than Sell Ave: bullish

NOW - Top 10 Players - March 1 - April 4, 2016 at 12noon

Reward-to-Risk Ratio

These charts that you’ve seen, including this Reward-to-Risk Ratio screenshot, were generated through my proprietary calculators. They can be downloaded and be used by my Plus and Unlimited Plan subscribers in the Stock Signals.

For example, let’s say you have an entry price of 1.63, a stop-loss price of 1.50, and a target price of 1.90, your reward-to-risk ratio is 2.08:1. What’s your ideal ratio for you to call it a profitable trade setup? That’s your assignment.

Also, when filling-out the Reward-to-Risk Ratio calculator, we don’t just put a random number that enters our mind. We base everything on the support and resistance points of a stock. So I suggest you learn how to plot a stock’s major and minor support and resistance points by using multiple time frames (e.g. monthly, weekly, daily, etc).

With our RRR calculator, we see in advance how much are we risking compared to how much reward we are aiming for.

NOW - Reward-to-Risk Ratio

So, is it still okay to buy $NOW?

Like what I’ve mentioned at the very beginning, read and understand the facts. Quantify and decide for yourself. My circumstances and risk tolerance are different from yours.

I have a bonus information for you. See the results that I got from my new calculator: Target Selling Price Calculator

I will introduce this calculator to my clients today. Calculation is based on price and implied volatility by using one, two, and three standard deviations. Yes, that’s Probabilities and Statistics 101. If you’re going to play the stock for an X number of trading days, this calculator can make a data-driven forecast of the stock’s possible price after your holding period.

NOW - Target Selling Price Generator

Whether you are a TRADER or an INVESTOR, the Stock Signals is for you. Traders check the Trade Alerts. Investors go to the Investors’ Picks.

Stock Signals Basic Plan for Full-time Investors

Jaycee De Guzman

I am the founder and CEO of iPresence Digital Marketing, Inc. and Equilyst Analytics, Inc. At iPresence, we have been helping SMEs reach and dominate the global market through our digital marketing services since 2001. At Equilyst, we have been helping Filipinos experience a simplified and profitable stock trading and investing experience in the Philippine Stock Market since 2014.
Jaycee De Guzman

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