Wall Street stocks finished a volatile session mostly lower on Thursday (May 3) amid shareholder concerns over interest rates and trade, and as Tesla shares plummeted following a public meltdown by chief Elon Musk.
The Dow Jones Industrial Average finished up 5.17 points (0.02 per cent) at 25,930.15, recovering after sinking 1.6 per cent at a session low.
The broad-based S&P 500 dropped 5.94 points (0.23 per cent) to end the day at 2,629.73, while the tech-rich Nasdaq Composite Index shed 12.75 points (0.18 per cent) to 7,088.15.
Analysts have described shareholder sentiment as broadly bearish as a strong earnings season winds down, with solid results from Amazon, Apple and others having failed to ignite a market rally.
“It is a little perplexing that the market is reacting the way,” said William Lynch, director of investment at Hinsdale Associates. “Earnings have been fantastic.”
Analysts say markets are uneasy over trade policy, with shareholders looking to meetings in Beijing led involving Treasury Secretary Steven Mnuchin and others.
Political turmoil in Washington involving President Donald Trump is another source of unease, together with concerns about the Federal Reserve’s ongoing drive to hike interest rates.
Fed concerns are predictable to be in focus again on Friday when the Labour Department releases April jobs data.
Among individual companies, Tesla Motors sank 5 per cent after founder and chief Musk responded testily to analyst questions on Wednesday about the need to raise capital and other financial matters, dismissing the queries as “boring” and “not cool” and refusing to answer.
He also said shareholders should not buy Tesla stock if they are afraid of volatility. “We have no interest in satisfying the desires of daytraders. I couldn’t care less,” Musk said.
JPMorgan Chase called Musk’s behavior as “truly bizarre” and expressed concern about the progress of the company’s ambitious plans to escalate production on its Model 3 sedan.
“We are concerned whether the problematic launch of the Model 3 means the vehicle is simply delayed or whether it calls into question its ability to generate 25 per cent gross (profit) margin,” the note said. (Source: AFP/de)
Top Pick for Friday: UnitedHealth Group Incorporated (NYSE: UNH)
UnitedHealth Group Incorporated (NYSE: UNH) has grabbed attention from the analysts when it experienced a change of 0.30% in the last trading session to close at $234.15. A total of 2,723,653 shares exchanged hands during the intra-day trade contrast with its average trading volume of 3.77M shares, while its relative volume stands at 0.72. 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, UnitedHealth Group Incorporated (NYSE: UNH) stock is found to be 1.71% volatile for the week, while 1.79% volatility is recorded for the month.
The stock has a market cap of $227.13B and the number of outstanding shares has been calculated 970.00M. Based on a recent bid, its distance from 20 days simple moving average is 1.00%, and its distance from 50 days simple moving average is 2.99% while it has a distance of 9.18% from the 200 days simple moving average. The company’s distance from 52-week high price is -6.64% and the current price is 40.50% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 54.10 together with Average True Range (ATR 14) of 4.98.
Past 5 years growth of UNH observed at 12.50%, and for the next five years the analysts that follow this company is expecting its growth at 15.98%. The stock’s price to sales ratio for trailing twelve months is 1.09 and price to book ratio for the most recent quarter is 4.75, whereas price to cash per share for the most recent quarter are 18.96. Its quick ratio for the most recent quarter is N/A. Analysts mean recommendation for the stock is 1.50. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
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