Below are charts of the bullish intensity scores for the most bullish stocks on Twitter.
Once a week we take a close look at the fifty most active stocks on Twitter and determine the status of their chart patterns relative to Twitter sentiment. Going forward we’ll show the results in a pie chart in our Tuesday posts about the most active stocks on Twitter. Today we’ll do it early and show you some example stock charts so you can see what each category in the pie chart means. Please note that we don’t show every chart here at Downside Hedge. However, if the status of a stock changes we almost always post it to Twitter @DownsideHedge so if you’re interested in every change all you have to do is follow us. Currently 72% of the top 50 active stocks have bullish chart patterns. The positive chart patterns are categorized as follows: Confirmed Uptrend, Counter Trend Bounce Possible, and Negative divergence. We consider a negative divergence a positive chart pattern because stocks often clear over bought readings by having sentiment diverge while the stock trades sideways
Below are the intensity scores for the 25 most active stocks on Twitter for the past week and month. Here is the status of the 50 most active stocks on Twitter. 70% have Twitter sentiment reading that confirm bullish chart patterns. Very few bearish stocks over the past week.
We’ve often stated that the best use of our Twitter sentiment indicator is to confirm the trend and warn of a pause (or consolidation) in the trend. It is not like other sentiment indicators who’s major use is to act as a contrary indicator. However, we’re starting to see a pattern in the sentiment of some of the most loved stocks that is somewhat contrary in nature. The pattern occurs in stocks that have too much love. These are stocks that every trader, investor, and fund has to own. These stocks have so much love and such a cult following that positive emotions rule the sentiment. We’ll start with a chart of Baidu (BIDU). Take a look at smoothed sentiment from early June 2012 until early November. Notice how it had a hard time of ever getting below zero even though the stock was clearly in a down trend and had been for over a year. Traders loved this stock. They saw every dip as a buying opportunity. Even the
Below are charts of the stocks with the highest bullish intensity on Twitter. We take the top ten from the monthly list on the first Friday of each month to make our Twitter Top 10 Portfolio. On the weekly list we’re seeing consumer staples and health care stocks starting to creep in. If the trend continues it will be just another sign of a rotation to safety. At this point the monthly list still contains a mix of high quality and high flying stocks (as has been the pattern since the first of the year).
Above are the stocks with the most Bearish intensity on Twitter over the last week. Below are the monthly numbers.
The stocks in the chart above have the highest Bearish intensity scores on Twitter over the last week. Below are the Monthly scores.