Guide to Day Traders – Enerplus Corporation (NYSE: ERF)

U.S. stocks rallied Tuesday, with the Nasdaq Composite Index closing above the big round number of 7000 points for the first time ever, as Wall Street kicked off 2018 on a high note.

The Dow Jones Industrial Average rose 104.79 points, or 0.42 percent, to 24,824.01. The S&P 500 added 22.18 points, or 0.83 percent, to 2,695.79. The Nasdaq Composite Index jumped 103.51 points, or 1.50 percent, to 7,006.90.

Shareholder sentiment was boosted by the prospect of the U.S. tax reform. The tax bill, which was signed into law by U.S. President Donald Trump later last month, cut the corporate income tax rate to 21 percent from 35 percent and lowered individual income rates. It became effective from January 2018.

Analysts said optimism over U.S. markets has been rising despite valuations that are seen as stretched by many measures.

On the economic front, the seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index (PMI) registered 55.1 in December, up from 53.9 in November and notching the highest level since March 2015.

U.S. stock markets were closed Monday for the New Year’s Day.

U.S. stocks had a banner year in 2017, with the Dow, the S&P 500 and the Nasdaq surging 19.4 percent, 25.1 percent and 28.2 percent, respectively. All three major indices witnessed their best annual gains since 2013. (Source: Xinhua)

Top Pick for Wednesday: Enerplus Corporation (NYSE: ERF)

Enerplus Corporation (NYSE: ERF) has grabbed attention from the analysts when it experienced a change of 2.35% in the last trading session to close at $10.02. A total of 1,203,285 shares exchanged hands during the intra-day trade contrast with its average trading volume of 922.72K shares, while its relative volume stands at 1.30. Relative volume is the comparison of current volume to average volume for the same time of day, and it’s displayed as a ratio. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it.  If RVOL is above 2 it is In Play and this is more evidence Investors ought to be in the name.  When stocks are *very* In Play one can see a RVOL of 5 and above.  The higher the RVOL the more In Play the stock is.

Day traders strive to make money by exploiting minute price movements in individual assets (usually stocks, though currencies, futures, and options are traded as well), usually leveraging large amounts of capital to do so, therefore they trade on Stocks in Play. In Play Stocks are volatile enough to produce good risk and reward trading opportunities for both bull and bear traders intraday. Most company stocks have very little volatility. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best.

In deciding what to focus on – in a stock, say – a typical day trader looks for three things: liquidity, volatility and trading volume. Liquidity allows an investor to enter and exit a stock at a good price (i.e. tight spreads, or the difference between the bid and ask price of a stock, and low slippage, or the difference between the predictable price of a trade and the actual price). If a stock does not have good liquidity then it may take some time before a broker is able to negotiate a deal to buy or sell a stock and the broker may not be able to get the sell or buy price that the trader is looking for. This is a problem for day traders and it could mean the difference between a profitable and non-profitable trade.

Traders have different rules for what constitutes liquidity and a good guide is the volume of trades and volume of shares that are traded each day. 100,000 shares traded per day would be a minimum for most traders and some require 1,000,000.

Trading volume is a gauge of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, known as the average daily trading volume – ADTV). A high degree of volume indicates a lot of interest in a stock. Often, a boost in the volume of a stock is a harbinger of a price jump, either up or down.

Volatility is simply a measure of the predictable daily price range—the range in which a day trader operates. More volatility means greater profit or loss. After a recent check, Enerplus Corporation (NYSE: ERF) stock is found to be 2.69% volatile for the week, while 3.28% volatility is recorded for the month.

Technical’s Snapshot:

The stock has a market cap of $2.47B and the number of outstanding shares has been calculated 246.20M. Based on a recent bid, its distance from 20 days simple moving average is 10.31%, and its distance from 50 days simple moving average is 9.97% while it has a distance of 16.59% from the 200 days simple moving average. The company’s distance from 52-week high price is -1.81% and the current price is 53.68% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 64.90 together with Average True Range (ATR 14) of 0.30.

Stock’s Valuation:

Past 5 years growth of ERF observed at 23.10%, and for the next five years the analysts that follow this company is expecting its growth at N/A. The stock’s price to sales ratio for trailing twelve months is 3.58 and price to book ratio for the most recent quarter is 1.93, whereas price to cash per share for the most recent quarter are 8.88. Its quick ratio for the most recent quarter is 2.00. Analysts mean recommendation for the stock is 2.00. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.

Disclaimer: Any news, report, research, and analysis published on are only for information purposes. Alpha Beta Stock (ABS) makes sure to keep the information up to date and correct, but we didn’t suggest or recommend buying or selling of any financial instrument unless that information is subsequently confirmed on your own. Information in this release is fact checked and produced by competent editors of Alpha Beta Stock; however, human error can exist.

Robert Thomas has over 14 years experience in the financial services industry giving him a vast understanding of how news affects the financial markets. He is an active day trader spending the majority of her time analyzing earnings reports and watching commodities and derivatives. He has a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.