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72% of the Most Active Stock on Twitter Have Positive Chart Patterns

Status of the Top 50 Most Active 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

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The Canaries Lived

We first wrote about the canaries in the coal mine that were warning of a correction in February.  As recent as last week the canaries were still warning.  Not so any longer.  The canaries lived. Most of the time when a market gets thin at new highs a correction follows, but once in a while the thin market resolves itself with rotation.  That’s what we’re seeing now.  The defensive sectors that have led all year are starting to under perform the broad market and the stocks that have lagged are being bought. Our Twitter support and resistance levels had pegged 1600 on the S&P 500 Index (SPX) as the most important resistance we’ve seen since we started tracking it.  There were a huge number of tweets that targeted that level.  The rotation in stocks since the break out above 1600 highlights how important that level was.  People who were defensive are starting to trim those positions and others who were under invested are buying technology, financials, and industrials.  Even the

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Sentiment Charts for MS, GOOG, MSFT, IBM

Twitter sentiment for Morgan Stanley MS

Thursday brings with it earnings reports from Morgan Stanley (MS), Google (GOOG), International Business Machines (IBM), and Microsoft (MSFT). Here’s what their Twitter sentiment charts look like ahead of the earnings reports. Morgan Stanley warned of consolidation in mid March and then cleared that warning last week.  The consolidation warning was cleared near the stock’s upward sloping trend line coming out of the July 2011 lows.  In addition, the 50 day moving average is in play.  Smoothed sentiment is trying to paint a positive divergence with price, but we’d like to see it continue to diverge (or start to confirm any upward move) before making any calls on the stock.  Overall we have a slight bullish bias.  If the stock moves higher after the earnings report and the move is confirmed by sentiment it will provide a low risk entry for a trade on the long side.  If the stock breaks lower we’ll be looking for a setup near the 200 day moving average. It took two consolidation warnings from

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15 Most Bearish Stocks on Twitter

Most Bearish Stocks on Twitter - Week

Below are the stocks with the most bearish intensity (volume and scores) on Twitter for both the past week and past month.

 
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15 Most Bearish Stocks on Twitter

Weekly and Monthly charts of stocks with the most bearish intensity on Twitter.

 
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Top 15 Bearish Stocks on Twitter

Most Bearish Stocks on Twitter

The stocks in the chart above have the highest Bearish intensity scores on Twitter over the last week. Below are the Monthly scores.

 
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Bank Stock Sentiment Weakening

Twitter Sentiment for Morgan Stanley MS

  Over the past few weeks Twitter sentiment for bank stocks has continued to weaken.  Morgan Stanley (MS) has now joined Goldman Sachs (GS) in the warning category. It has broken the confirming uptrend line and also broken below zero. As we noted in our weekend update for the S&P 500 Index (SPX) this condition isn’t serious when it signals against the trend.  As with most other technical indicators, signals against the prevailing trend generally only cause a pause in price movement. In an uptrend they provide an opportunity to buy the dip rather than signaling that the stock is going to start a new down trend. Smoothed Twitter sentiment for Citigroup (C) and JPMorgan Chase (JPM) are both starting to paint negative divergences with price.  This comes after painting sentiment readings that mirrored price.  Traders sold into weakness (sentiment mirroring price), but aren’t buying the new found strength (sentiment diverging negatively).  These two stocks may join GS and MS in some profit taking. Watch the bank stocks over the

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Twitter Sentiment Charts – GOOG, GS, JPM

Google Twitter Sentiment GOOG

We wanted to highlight a few Twitter sentiment charts today that are looking interesting. Please note, we don’t recommend that you base your trading decisions solely on this one indicator.  It should be used as just one more piece of the puzzle when making decisions. The first one is Google (GOOG).  We showed this chart last Friday when GOOG gave its first warning that traders were taking profit and losing optimism as price pushed higher.  After diverging from price, smoothed sentiment broke the confirming uptrend line. Since Friday’s warning  the stock has spiked higher and taken smoothed sentiment back to the down trend line that has been in place since early February.  Over the next few days GOOG will either clear the warning or turn back down. The island on price is a very concerning pattern.  We don’t want to see a gap down tomorrow or it could cause trouble for the stock.  Remember that many people who own GOOG also own…or have owned…Apple (AAPL) during its downtrend. These traders

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Financial Stock Preview

Twitter Sentiment for Goldman Sachs (GS)

The banks will kick of their earnings season this week so we thought we’d show Twitter sentiment for five of them to get a feel for what traders tweets think of them before they report.  We’ll start with the good then move on to the bad and ugly.   Goldman Sachs (GS) is looking great and tweets about the stock are overwhelmingly positive. Daily sentiment hasn’t seen a day below zero in a month.  Smoothed sentiment is continuing to confirm the price move.  Just what we want to see in a stock in an uptrend.   Citigroup (C) is looking about the same.  It has a few more negative days than GS, but smoothed sentiment is continuing to rise which is a good sign. Bank of America (BAC) is looking the worst from a price perspective and sentiment is following price.  Smoothed sentiment is still above zero and we don’t have a huge divergence yet so there’s a good chance that BAC will resume its uptrend after some consolidation. JPMorgan

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