Chapter X: The mood of the market toward Starbucks Corp show up in the Daily Closing Altitude and other Sentiment Indicators. |
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| A well known sentiment indicator is the NVI or Negative Volume Index for Starbucks Corp. 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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What to look for in an NVI plot for Starbucks Corp: 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 Starbucks Corp 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 1/21/2011, the weekly average closing altitude was 68.63 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 SBUX while traces below the midline are a sign that speculators are afraid to hold on to the issue overnight. The short-term trend is positive, with a slope of 23.59. Starbucks Corp stock prices are shown in red. |
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| The Volume Portion is low for the latest data at 0.36. Here the blue indicates the proportion between Up Volume and Down Volume. Again, the horizontal blue line represents the neutral point. Starbucks Corp 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 -0.30. |
Influence of Investor Sentiment on SBUX stock prices. Also, roadmap and Summary of most effective indicators: |
| Friday, February 18, 2011: We have news on Fiserv, Inc., ticker symbol FISV. Signs of an over-bought condition have become noticable. Also, there are breaking events concerning Zimmer Holdings, Inc. and D.R. Horton, Inc.. From the News Archive: (2/18/2011 ) Favorable events happened at Robert Half International Inc. and Southwestern Energy Company. Meanwhile, bad news came from McCormick & Company, Incorporated and Reynolds American, Inc.. |