Shares of Twenty-First Century Fox and Netflix led the Nasdaq Composite index to a record as a judge’s ruling that the AT&T and Time Warner deal could go through raised valuations across the media industry.
The broader market was little changed as shareholders awaited the Federal Reserve’s decision on interest rates.
The Nasdaq composite notched a new intraday high, rising 0.52 percent as gains in Netflix and Amazon carried the tech-heavy index higher.
The Dow Jones industrial average was little changed amid gains in UnitedHealth and losses in Caterpillar. The S&P 500 rose 0.15 percent as health care and utilities offset energy and telecommunications.
Most media and telecommunications stocks rose Wednesday following a U.S. District Court’s decision to allow AT&T’s $85 billion bid for Time Warner.
The federal judge’s ruling did not impose conditions on the merger’s approval, clearing the way for other vertical deals. The approved deal gives the pay-TV provider ownership of cable companies such as HBO and CNN in addition to film studio Warner Bros.
Shares of Twenty-First Century Fox rallied 8 percent Wednesday, ahead of a widely anticipated bidding war between Comcast and the Walt Disney Company for portions of Rupert Murdoch’s business.
Disney, which offered Fox an all-stock, $52.4 billion deal for assets counting cable networks and its entertainment businesses, will likely be forced to decide whether it’s willing to top a significantly higher bid from Comcast. Disney shares turned around after opening lower and were higher by 2 percent.
Time Warner shares rallied 3 percent following the ruling, while online television and film company Netflix rallied 2.5 percent after Goldman Sachs reiterated its buy rating on shares and raised its price target to the highest on Wall Street.
AT&T and Comcast declined.
The Fed’s regular two-day meeting culminates at 2 p.m. ET, when the central bank will declare its next monetary policy decision. (CNBC)
Stock in Focus: Southwest Airlines Co (NYSE: LUV)
Southwest Airlines Co (NYSE: LUV) has grabbed attention from the analysts when it experienced a change of 1.02% in the current trading session to trade at $51.49. A total of 2,085,963 shares exchanged hands during the intra-day trade contrast with its average trading volume of 5.87M shares, while its relative volume stands at 1.36. 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, Southwest Airlines Co (NYSE: LUV) stock is found to be 1.57% volatile for the week, while 2.08% volatility is recorded for the month.
The stock has a market cap of $29.71B and the number of outstanding shares has been calculated 582.90M. Based on a recent bid, its distance from 20 days simple moving average is 0.17%, and its distance from 50 days simple moving average is -2.65% while it has a distance of -9.73% from the 200 days simple moving average. The company’s distance from 52-week high price is -23.13% and the current price is 3.48% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 47.78 together with Average True Range (ATR 14) of 1.05.
Past 5 years growth of LUV observed at 43.80%, and for the next five years the analysts that follow this company is expecting its growth at 17.80%. The stock’s price to sales ratio for trailing twelve months is 1.40 and price to book ratio for the most recent quarter is 3.11, whereas price to cash per share for the most recent quarter are 9.16. Its quick ratio for the most recent quarter is 0.60. Analysts mean recommendation for the stock is 1.80. 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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