- Admin123 : Admin - Sapphire Capitals
- Date : 2023-05-21
Stock In Focus - Week 21 (2023) – POLAND – VOLUME SPIKE TRADING STRATEGY
The week beginning Monday, the 22nd May is Week 21 as per ISO numbering convention of the weeks of a year.
Country in focus:
This week we look at the Stocks from Poland in WARSAW WIG80 index.
Stock/ETF in focus:
Specific Stock in focus is FERRO S.A. (Ticker: FRO). The Stock is listed in the Warsaw Stock Exchange (WSE), the trading currency is Polish Zloty (PLN).
This week’s Stock in focus is more for the purpose of illustrating how Volume Spike trading strategy works and how can you take advantage of the information available from the trading application to build your own trading plan for the Stocks/ETFs of your country of interest.
Trade Direction:
BULLISH, Volume Spike study since beginning of 2020 reveal 73.5% probability of success in a BUY (LONG) trade. Please note that probability is not certainty, so always trade with complete discipline of risk management and that there is a plan if trade does not playout as anticipated.
Most Recent Event:
Most recent Volume spike event was on Tuesday, the 16th May 2023. Usually, the trade is opened on the day after the Volume Spike event, or Wednesday, the 17th or 18th May. But, since this blog is being written over the weekend, the potential trade opening is the next market open day on Monday, the 22nd May.
Overview:
FERRO S.A. manufactures and sells sanitary and installation fittings and heating equipment in Poland and internationally. The company was founded in 1992 and is headquartered in Skawina, Poland.
It offers mixers, showers, sinks, accessories, bathroom accessories, shower trays, and sanitary ware and bathroom accessories for public services. The company also provides heating solutions, such as water systems, measurement and gas fittings, control and expansion vessels, PEX systems, clamp couplings, brass fittings, pumps, heat controls, manifolds, accessories for radiators, radiators and thermostatic valves, and service accessories, as well as exchanger-pumping sets, plate exchangers, and differential and mixing valves. It offers its products under the FERRO, Metalia, Novaservis, Nobless, FDesign, and Titania brands.
(Courtesy: Yahoo Finance)
Sector and Industry Details:
Sector(s): Industrials
Industry: Building Products & Equipment
Full Time Employees: 916
(Courtesy: Yahoo Finance)
Fundamentals:
52 Week Range 20.00 - 32.20
Avg. Volume 10,942
Market Cap 650.027M
Beta (5Y Monthly) 0.77
PE Ratio (TTM) 9.94
EPS (TTM) 3.08
Ex-Dividend Date Sep 19, 2022
(Courtesy: Yahoo Finance)
Current trading price:
As of Tuesday, the 16th May 2023, or the day the latest Volume Spike event took place, the stock closed at 30.00. The size of the Volume Spike was 3.54X of the average volume. In close succession, there were two more volume spikes. The earlier Volume spike was on 15th May 2023 with a spike size of 5.24X. The one before that was on 6th April 2023 with a spike size of 6.73. This is very significant and indicative of buying frenzy in the market.
VOLUME SPIKE EVENT:
The Stock was BULLISH 73.5% of the time following Volume Spike events since the beginning of 2020, average spike size being minimum of 3X. Here is the key Volume Spike event performance of the Stock:
Summary report: Since beginning of 2020, there were 37 Volume Spike events, out of which the latest event of 16th May is yet to be traded, that is the current BULLISH trading opportunity being discussed in this blogpost. There were also two more Volume spike events as mentioned earlier which are still in open trades. This leaves 34 completed trades using Volume Spike trading strategy, of which three were 25 winners (and hence 73.5% confidence or Probability) with average move up (AMU) of whopping 13.89% and average move down (AMD) of 8.27% for an average holding time (ADH) of about 40 days.
Historical RRR in those completed trades was a low 0.6:1. Please note that RRR shown here is a worst-case scenario, as many trades could be closed sooner with higher profit compared to trades closed at the end of 9-week period. However, because of the low RRR of the past trade, we would be careful in making a trading decision. As mentioned earlier, this week’s Stock of interest is for the purpose of illustrating how Volume spike trading strategy is implemented using the information from our trading application.
Detailed Report, Trade Performance: If 1,000 stocks were bought following those Volume Spike events, then a trader would have had a Gross Profit of 87,200, Gross Loss of 31,750, making a Total Net Profit of 55,450. In those closed trades, the Largest Win was 7,500, the Largest Loss is 6,750, the Average profit/trade being 1,500. All figures above are in PLN.
The Profit Factor (which is quotient of Gross Profit and Gross Loss) in those trades was 2.75.
Detailed Report, Trade by Trade Performance: Results of each trade taken following the Volume Spike events since the beginning of 2020 are as shown in the table below. These tables are from the Detailed report of the Volume Spike trading app.
Histogram Chart: The chart below shows the percentage moves of the underlying Stock of Interest following each Volume Spike event for the period of analysis mentioned earlier, for a quick visual clue of the trade-by-trade performance.
Candlestick Chart: The candlestick chart of the underlying Stock/ETF’s latest performance is as shown below. In the web-based Volume Spike trading app, the chart is available for all the Volume Spike events since the year in the “Data since” in the input filter page.
Trade Structure:
This week’s Stock if interest is for the purpose of illustration only as mentioned before and hence no trade structure is included in this blog.
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 http://www.sapphirecapitals.com/Disclaimer.