SAFM - Sanderson Farms

Industry: Food - Major Diversified Sector: Consumer Goods | Exchange: NASDAQ

Buy Candidate
Thu 21'st Sep 2017

PERIOD 2017-06-22 - 2017-09-21
CHANGE 0.81%
PRICE $163.37
VOLUME
Buy
TREND
Buy

MV LONG
Buy

MV SHORT
Buy

PIVOT
Buy

MACD
Buy

BOLLINGER
Buy
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Sanderson Farms Stock Analysis

Technical stock analysis for Thu 21'st Sep 2017

Buy candidate since 2017-09-11 Gain 9.10%

Sanderson Farms gained 0.81% in the last trading day, rising from $162.06 to $163.37 , and has now gained 3 days in a row. It will be exciting to see whether it manages to continue gaining or take a minor break for the next few days. The price has risen in 8 of the last 10 days and is up by 9.07% over the past 2 weeks. Volume has increased in the last day along with the price, which is a positive technical sign, and, in total, 113 920 more shares were traded than the day before. In total, 455 121 shares bought and sold for approximately $74.35 million.

Trend

Sanderson Farms lies in the upper part of a strong rising trend in the short term, and this will normally pose a very good selling opportunity for the short-term trader as reaction back towards the lower part of the trend can be expected. A break-up at the top trend line at $164.47 will firstly indicate a stronger raising rate. Given the current short-term trend, the stock is expected to rise 41.6% during the next 3 months and, with 90% probability hold a price between $214.16 and $232.89 at the end of this period.

Signals

Only positive signals in the chart today. Sanderson Farms holds buy signals from both short- and long-term moving averages. In addition, there is a general buy signal from the relation between the two signals where the short-term average is above the long-term average. On corrections down there will be some support from the lines at $159.35 and $146.20. A break down below any of these levels will issue sell signals. A buy signal was issued from a pivot bottom point on Thursday August 24, 2017, which indicates further gains until a new top pivot has been found. Volume is rising along with the price. This is considered to be a good technical signal.

The stock had a Golden Star Signal* on Friday October 28, 2016 in the mediumterm chart.

* Golden Star Signal* is when the short-term moving average, the long-term moving average, and priceline meet in a special combination. This combination is very rare and often followed by long and strong gains for the stock in question.

Relative Strength Index (RSI)

RSI14 is 85 and the stock is extremely overbought on RSI14, but may also ontinue to gain. Some stocks see their best performance while being overbought, but very seldom does RSI remain so high for a long time without short corrections. Risk has therefore increased and larger daily movements can be expected for the next couple of days.

Support & Resistance

On the downside, the stock finds support just below today's level from accumulated volume at $150.42 and $136.67. There is no resistance from accumulated volume above today's level and given the right condition the stock may perform very well during the next couple of days.

There is natural risk involved when a stock is testing a support level, since if this is broken, the stock then may fall to the next support level. In this case, Sanderson Farms finds support just below today's level at $150.42. If this is broken, then the next support from accumulated volume will be at $136.67 and $126.18.

Support: $150.42 Price: $163.37
S: $150.42 Price: $163.37

Risk

This stock may move much during a day (volatility) and with a large prediction interval from the Bollinger Band this stock is considered to be "high risk". During the last day, the stock moved $4.27 between high and low, or 2.67%. For the last week, the stock has had a daily average volatility of 2.21%.

The stock is overbought on RSI14 and lies in the upper part of the trend. Normally this will pose a good selling opportunity for the short-term trader, but some stocks may go long and hard while being overbought. Regardless, the high RSI together with the trend position increases the risk and higher daily movements (volatility) should be expected. A correction down in the nearby future seems very likely and it is of great importance that the stock manages to break the trend before that occurs.

Our recommended stoploss: $154.42 (-5.48%) (This stock has medium daily movements and this gives medium risk. The RSI14 is 85 and this increases the risk substantially. There is a buy signal from pivot bottom found 19 days ago.)

Overall risk:

Very Low Low Medium High Very High

Overall risk:

           

Evaluation

Several short-term signals, along with a general good trend, are positive and we conclude that the current level may hold a buying opportunity as there is a fair chance for this stock to perform well in the short-term.

Buy Candidate

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