Chapter X: Technical Analysis discovers the range of moods of investors toward EL. |
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| For The Estee Lauder Companies Inc., the Negative Volume Index is a well known indicator for market sentiment. The modern version of the indicator has received 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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Interpreting the Calibrated NVI for The Estee Lauder Companies 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 The Estee Lauder Companies Inc. covers the few years before the start of the chart at the top of the page. |
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| The historical Closing Altitude is traced by the blue line above. For the trading week ending 1/28/2011, the weekly average closing altitude was 24.96 percent. 50 percent closing altitude is marked as the midline. If the closing prices happened to be exactly halfway between the high and low, they would be plotted on this midline. Values above the midline indicate that day traders have positive feelings toward EL 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 -40.41. The Estee Lauder Companies Inc. stock prices are shown in red. |
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| The Volume Portion is low for the latest data at 0.71. Here the blue indicates the proportion between Up Volume and Down Volume. Again, the horizontal blue line represents the neutral point. The Estee Lauder Companies 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.The last tic shows an uptrend in the volume portion of 0.04. |
Influence of Investor Sentiment on EL stock prices. Also, roadmap and Summary of most effective indicators: |
| In the news, Friday, February 18, 2011: An unfavorable condition has developed with Aetna Inc., ticker symbol AET. Also, there are breaking events concerning Dollar Tree, Inc. (DLTR) and First Niagara Financial Group Inc. (FNFG) |