VeriFone Slipping Down

Published March 30, 2017
5:45 PM

On March 30, 2017 VeriFone Systems (PAY) crossed below its 50 day moving average (MA). Historically this has occurred 97 times. When this happens, the stock does not always continue to drop. It has a median gain of 6.329% and maximum gain of 55.442% over the next 10 trading days.


When we take a look at other technical indicators, the relative strength index (RSI) is at 49.2149. RSI tends to determine overbought and oversold levels. I personally use anything above 75 as overbought and anything under 25 as oversold. The current reading declares the stock is neutral and looking for direction.

The true strength index (TSI) is currently -3.5704. The TSI determines overbought/oversold levels and/or current trend. I solely use this as an indicator of trend as overbought and oversold levels vary. The TSI is double smoothed in its calculation and is a great indicator of upward and downward movement. The current reading declares the stock is trending down.

The negative vortex indicator (VI) is currently 1.1591. The VI determines current trend and direction. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The current reading declares the stock is trending downward but the positive vortex indicator is climbing and the negative indicator is beginning to drop.

Considering the moving average crossover, RSI, TSI, and VI levels, the overall near-term stock direction appears to be slightly trending downward. Based on historical movement compared to current levels and the current position, the stock could drop 3.67% over the next two weeks. The stock recently broke out of its upward trend channel and has entered a narrower down channel. The exact width of the current channel is still to be determined. I tend to look for at least three contact points to establish a trend which has not occurred on the support side of the down channel and today's opening level is only the third point on the resistance line. There is noticeable support around 18.52 which could be met in the near-term.

DISCLOSURE: I currently do not have positions in the stock mentioned above. I most likely will not enter a position within the next 72 hours. Historical movements and technical indicators should never be the sole basis for entering positions involving risk. Make sure appropriate research is conducted prior to taking any risk in a marketplace.

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