Chapter X: The mood of the market toward PepsiCo show up in the Daily Closing Altitude and other Sentiment Indicators. |
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| For PepsiCo, the Negative Volume Index is a well known indicator for market sentiment. This version is includes several enhancements suggested by Norman Fosback. The plot is the proportion of the daily NVI as compared to the past year's average daily NVI. 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 PepsiCo: In its modern form, the NVI is an elegant indicator, but requires some care in interpretation. 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 PepsiCo 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 3/5/2010, the weekly average closing altitude was 53.07 percent. The midline represents the 50 percent closing altitude. 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 PEP 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 -26.76. PepsiCo stock prices are shown in red. |
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| The Volume Portion is low for the latest data at 0.88. Here the blue indicates the proportion between Up Volume and Down Volume. Again, the horizontal blue line represents the neutral point. PepsiCo 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 -0.01. |
Influence of Investor Sentiment on PEP stock prices. Also, roadmap and Summary of most effective indicators: |
| Wednesday, March 17, 2010: We have news on General Electric, ticker symbol GE. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Intel and Marsh & McLennan Companies, Inc.. From the News Archive: (3/12/2010 ) A favorable event happened at Zimmer Holdings, Inc.. Meanwhile, bad news came from ConAgra Foods, Inc., Convergys Corporation, and Coach, Inc.. |