Chapter X: The mood of the market toward Alcoa Inc show up in the Daily Closing Altitude and other Sentiment Indicators. |
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| Negative Volume Index (NVI) is a traditional Sentiment Indicator for Alcoa Inc. This version is includes several enhancements added by Norman Fosback. The indicator is the proportion of the daily NVI as compared to the average daily NVI over the past year. The plot is orange below the unity line (neutral implication) and green above (bullish). |
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How to read the Calibrated NVI for Alcoa Inc: The NVI is an elegant indicator based on sound principles but it should not be interpreted in a simplistic manner. The orange plot (NVI less than unity) is not considered bearish because a lowering of the NVI is a natural tendancy under many market conditions. When the plot is in the green area, it indicates that prices are rising on low volume sessions, which is contrary to the normal condition. This can be a tip off to "accumulation behaviour" on the part of someone or some group in the market. The indicator seems most significant when prices are falling and the NVI is rising, which indicates a market that is "buying on the dips". |
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| Because the NVI operates over a somewhat longer time frame than most technical indicators, it is of interest to track it over a longer period to get a feeling for how it works. This chart for Alcoa Inc covers the few years before the start of the chart at the top of the page. |
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| For the trading week ending 3/5/2010, the weekly average closing altitude was 38.89 percent. The historical Closing Altitude is traced by the blue line in the chart above. 50 percent closing altitude is marked as the midline. It indicates closing prices halfway between the high and low prices for the day. Values above the midline indicate that day traders have positive feelings toward AA while traces below the midline are a sign that speculators are afraid to hold on to the issue overnight. The latest data indicates a downward trend, with a slope of -31.24. Alcoa Inc stock prices are shown in red. |
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| The Volume Portion is low for the latest data at 0.50. Here the blue indicates the proportion between Up Volume and Down Volume. Again, the horizontal blue line represents the neutral point. Alcoa Inc share prices are overlaid in red. This is an important indicator for market timing, as a change in direction of the volume line may happen before the price turns.Short term, the slope of this indicator is negative at -0.03. |
Influence of Investor Sentiment on AA stock prices. Also, roadmap and Summary of most effective indicators: |
| Friday, March 12, 2010: We have news on ConAgra Foods, Inc., ticker symbol CAG. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Texas Instruments Incorporated and Convergys Corporation. From the News Archive: (3/11/2010 ) A favorable event happened at Amgen, Inc.. Meanwhile, bad news came from Coach, Inc., Fluor Corporation (NEW), and Automatic Data Processing. |