Here’s What Short-Term Traders Should Know – Cardinal Health Inc (NYSE: CAH)

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Shareholders fled US stocks on Friday after Donald Trump threatened more tariffs against Chinese goods, China vowed to battle “to the end” and US employment data missed analysts’ expectations.

The Dow Jones industrial average closed 572 points down, or around 2.34%. Boeing and Caterpillar, considered vulnerable in any trade war with China, fell by 3.06% and 3.47%, respectively.

The losses wiped out the major indexes’ gains for the week, with the S&P 500 down 1.7% and the Nasdaq down 2.2% as shareholders moved into haven assets such as bonds and gold.

China declared fresh tariffs on 106 US products on Wednesday. A day later, Trump asked US trade representatives to consider $100bn in additional tariffs against China.

“China, which is a great economic power, is considered a Developing Nation within the World Trade Organization,” the president tweeted on Friday. “They therefore get tremendous perks and advantages, especially over the US. Does anybody think this is fair. We were badly represented. The WTO is unfair to US.”

China’s commerce ministry said it would respond commensurate to US action.

Technology stocks were also hit on the New York exchanges, with Apple and Amazon declining more than 2%. US oil stocks fell 2.3% on fears Beijing could restrict crude exports. China is the second leading importer of US oil, after Canada.

The stock market drops came despite efforts by Trump officials to downplay any likelihood that new tariffs would be enacted. The US treasury secretary, Steve Mnuchin, appearing on CNBC, said he was “cautiously optimistic” the US would reach a resolution with China.

Earlier in the day, stocks were hit after the most recent US jobs report missed targets. The US economy added just 103,000 jobs in March, well below the 170,000 forecast by economists polled by Bloomberg MarketWatch. The US still shows the tightest labor market in nearly two decades. (Source: The Guardian)

Top Pick for Monday: Cardinal Health Inc (NYSE: CAH)

Cardinal Health Inc (NYSE: CAH) has grabbed attention from the analysts when it experienced a change of -2.27% in the last trading session to close at $62.39. A total of 1,774,932 shares exchanged hands during the intra-day trade contrast with its average trading volume of 3.07M shares, while its relative volume stands at 0.58. 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, Cardinal Health Inc (NYSE: CAH) stock is found to be 4.18% volatile for the week, while 2.98% volatility is recorded for the month.

Technical’s Snapshot:

The stock has a market cap of $20.09B and the number of outstanding shares has been calculated 322.02M. Based on a recent bid, its distance from 20 days simple moving average is -5.77%, and its distance from 50 days simple moving average is -8.36% while it has a distance of -7.49% from the 200 days simple moving average. The company’s distance from 52-week high price is -24.65% and the current price is 14.14% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 40.45 together with Average True Range (ATR 14) of 1.93.

Stock’s Valuation:

Past 5 years growth of CAH observed at 5.60%, and for the next five years the analysts that follow this company is expecting its growth at 7.09%. The stock’s price to sales ratio for trailing twelve months is 0.15 and price to book ratio for the most recent quarter is 2.59, whereas price to cash per share for the most recent quarter are 16.09. Its quick ratio for the most recent quarter is 0.60. Analysts mean recommendation for the stock is 3.00. 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 Alphabetastock.com 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.

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Donald S. Wiggins

Donald S. Wiggins

Donald S. Wiggins is passionate about business and finance news with over 5 years in the industry starting as a writer working his way up into senior positions. He is the driving force behind alphabetastock.com with a vision to broaden the company’s readership throughout 2016. Wiggins is an editor and reporter of “Services” Category.

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