By Jeff Pierce

Technically this is a very strong chart and I like everything about the indicators, but it has 2 very big no-no’s.

1. Volume is under 500 avg daily.

2. Today’s move was due to an analyst upgrade.

You might think that is a good thing, but when it comes to analysts I just don’t trust them. They want to provide liquidity and raise the stock price so they can unload their shares. Maybe I’m being a little cynical, but I’ve rarely seen any upgrade provide any lasting power for stock appreciation and stay away from them like the plague. If I’m in a stock and it gets a pop due to an upgrade I’m out.

So this is a case where I’m not really saying that this stock is going to be higher 2 months from where it is now, as it is more a lesson on what a strong chart looks like, and why I’m not touching it.


twz next.

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7 Responses to “Look At This Stock – WEN”

  1. Noland Says:

    I’m a little naive and still trying to learn about technical analysis. When you say that volume is under 500 avg daily, what do you mean? The charts I see say the average volume is around four million. Also, is there a particular place that you look to see about analyst upgrade or do you just see this in the financial pages of the publications you read? Thanks.

  2. jeff pierce Says:

    Hey Noland. You are right. I confused this with another stock I was doing some research on and since there was no volume indicator on this chart I didn’t catch my mix up. My main charts I use in trading (that I don’t share here) have other indicators with settings and I have an EMA on the volume one for the last 30 days. That way it’s the most recent average. Regardless…it’s the reason this moved that would keep me away from it.

    Think or Swim has a neat “news” feature that shows you all the news for the last couple of weeks. FWIW, I don’t ever read any news publications or news websites, or even the news period. I just want to know “why” something did what it did.

  3. Look At This $DANG Stock Says:

    […] Look At This Stock – WEN […]

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