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Admin123 :
Admin - Sapphire Capitals -
Date :
2022-05-14
Stock of interest - Week 20 (2022) – AUSTRALIA – VOLUME SPIKE
The week beginning Monday, the 16th May is Week 20 as per ISO numbering convention of the weeks of a year.
Country in focus:
This week we look at the Stocks from AUSTRALIA in ASX300 index.
Stock/ETF in focus:
Specific Stock in focus is Infomedia Ltd (Ticker: IFM), in the Technology Sector and Software Application industry.
Quick note on the Stock: With the rise of inflation and major economies around the world slowing down after rapid recovery following relief from Covid, there are few tech stocks which are expected to see surge. We consider this Stock as one because it had very consistent bullish volume spikes over last few years and those spikes was followed by significant surge in price. Please read more details below.
Trade Direction:
BULLISH, Volume Spike study since beginning of 2018 reveal 86.2% probability of success in a BUY (LONG) trade.
Overview:
Infomedia Ltd, a technology company, develops and supplies electronic parts catalogues, service software, data analytics, and business insights for the automotive industry worldwide. The company offers parts solutions, including Microcat EPC, an electronic parts catalogue; Microcat PartsBridge for collision parts ordering; Microcat Market for mechanical parts ordering; Microcat CRM, an online CRM for wholesale parts; Microcat Messenger, an instant messaging tool; and Microcat EPC Origins. It also provides service solutions, such as Superservice Platform; Superservice Menus, a service quoting software; Superservice Triage, an electronic vehicle health check software; Superservice Connect, an online self-serve booking and quoting system; and Superservice Register, an online VIN-specific central database. In addition, the company offers oil industry solutions comprising Netlube Data, a lubricant recommendation database; and Netlube CRM, a frontline sales transformation solution, as well as data management, performance insights, forecasting, customer experience, and dealer optimization services. Infomedia Ltd was incorporated in 1987 and is headquartered in Sydney, Australia. (Courtesy: Yahoo Finance)
Sector and Industry Details:
Sector(s): Technology
Industry: Software Application
Full-time employees: 300
Fundamentals:
52-week range 1.1550 - 1.8050
Avg. volume 855,152
Market cap 480.975M
PE ratio (TTM) 47.41
EPS (TTM) 0.0270
Earnings date 24 Feb 2022
1y target estimate 1.94
Current trading price:
As of Friday, close of 13th May 2022, the stock was trading at 1.28.
VOLUME SPIKE:
The stock were mostly bullish following Volume spikes larger than 3X as evident from the details of its behaviour:
- Since beginning of 2018, there were 31 Volume spikes of size larger than 3X, out of which 25 were bullish with average move up (AMU) of 14.04% and average move down (AMD) of 4.88% for an average holding time (ADH) of 41 days;
- If 10,000 stocks were bought following those Volume spikes, then a trader would have had a Gross Profit of $51,700, Gross Loss of $7,200, making a Total Net Profit of $44,500;
- In those trades, the Largest Win was $5,800, Largest Loss is $3,100, the Average profit/trade being $1,400.
- The average Reward-Risk Ratio (RRR) in those trades were about 7:1
Trade Structure:
We would trade the Stock as CFD trade, structured as follows with RRR of 4:1:
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TRADE STRUCTURE |
||
|
Stock price |
$1.28 |
AU$ |
|
CFDs |
3,000 |
Number of Stocks used for this CFD trde |
|
Leverage |
10 |
CFD leverage |
|
Margin |
$384.00 |
Amount of fund required for the trade |
|
Target Stock price (TP) |
$1.54 |
20% above the current price |
|
Stop Stock price (SL) |
$1.22 |
5% below the current price |
|
Profit Target |
$768.00 |
Limit order placed at underlying price of TP |
|
Stop Loss |
$192.00 |
Guaranteed stop at SL price |
The choice of RRR of 4:1 is historically consistent with the averages following 29 of the 31 volume spikes since 2018.
Charts:
Summary report extract:
Trade Performance (Single Stock/ETF/Index, non-leveraged): 2012-2021:
Histogram:
Latest event candlestick chart:
Further Information about trading applications:
Please visit the following URL for more information on various trading applications from Sapphire Capitals which are designed to deliver high probability trading opportunities for swing trading as well as for intraday trading:
https://www.sapphirecapitals.com/pages/swing-trading-stock-seasonality-strategy/
https://www.sapphirecapitals.com/pages/swing-trading-stock-price-action-strategy/
https://www.sapphirecapitals.com/pages/swing-trading-volume-spike-stock-trading-strategy/
https://www.sapphirecapitals.com/pages/day-trading-intraday-seasonality-trading/
Disclaimer:
Sapphire Private Assets (ABN: 34 613 892 023, trading as Sapphire Capitals) is not a broker or a financial adviser but an education and research organisation; we provide training and tools for traders and DIY fund managers for trading in global financial markets. The contents of the blog have been produced by using technical analysis and trading applications developed by Sapphire Capitals for the Stock and ETF traded worldwide. The contents of this blog are intended for education and research purposes only and is not a recommendation or solicitation to invest in any Stock or ETF.
For more details, please visit www.sapphirecapitals.com/Disclaimer.
