Stock’s Volatility Analysis – Abercrombie & Fitch Co (NYSE: ANF)

U.S. stocks logged sharp gains Friday, with major indexes shaking off an early slide as technology stocks—notably Apple Inc.—rallied, overshadowing uncertainty over tense trade talks between the U.S. and China and a weaker-than-predictable rise in April nonfarm payrolls.

The Dow Jones Industrial Average rose 332.36 points, or 1.39%, to end at 24,262.51, recovering from an earlier drop of about 150 points. The blue-chip average logged its biggest daily climb since April 10, according to FactSet data. However, the average has struggled lately, falling in nine of the past 13 sessions.

The S&P 500 index rose 33.69 points, or 1.28%, to finish at 2,663.42. The Nasdaq Composite Index rose 121.47 points, or 1.71%, to close at 7,209.62, pushing the gauge back into positive territory for the week. All three indexes had opened lower.

Friday’s gains were broad based, with all 11 S&P 500 sectors higher on the day. Tech was by far the biggest boost to markets, though, gaining 2%.

Friday’s gains weren’t enough to push the Dow and S&P into positive territory for the week, with both posting 0.2% weekly declines. The Nasdaq turned positive for the five-session stretch, however, up 1.3%.

Apple Inc. stock finished up 3.92%, boosting markets broadly after CNBC stated Berkshire Hathaway bought 75 million shares of the iPhone maker in the first quarter. The stock hit a record and was on track for its biggest weekly gain since October 2011.

The U.S. created 164,000 new jobs in April, below the 188,000 that had been predictable. Separately, the unemployment rate fell to 3.9% from 4.1%, the first time the jobless rate has dropped below 4% since the end of 2000.

In Beijing, U.S. and Chinese officials were meeting for negotiations on tariffs and other trade issues. Concerns about trade hostilities between the top two global economies have roiled financial markets in recent months. (Source: MarketWatch)

Stock in the Spotlight: Abercrombie & Fitch Co (NYSE: ANF)

Abercrombie & Fitch Co (NYSE: ANF) shares exhibited a change of -3.61% during most recent session to reach at the closing price of $25.40. Wall Street analysts covering the stock are projecting that the stock will reach $22.17 within the next 52-weeks.

Volume – A Tool to Project Future Performance:

Price isn’t the only tool analysts use to project future performance. Volume patterns can also disclose some important insights. If, for instance, a stock’s volumes suddenly increase by a noteworthy amount, it’s usually a sign that the level of conviction behind the trade is high. Shareholders may feel very strongly about the future direction of the stock in question. The stock exchanged hands with 2,608,002 shares as compared to average trading capacity of 3.06M shares, yielding a market cap of $1.76B.

Risk Factors under Consideration:

When predicting the future performance for a stock, it’s also important to take into account risk. To do this, analysts often use a stock’s beta, which measures the stock’s volatility relative to the overall market.

Abercrombie & Fitch Co (NYSE: ANF) has a beta of 0.85, contrast to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. In looking at volatility levels, the shares saw weekly volatility of 3.72% and 3.78% over the past month. Another important technical analysis volatility indicator is Average True Range (ATR), originally developed by J. Welles Wilder, Jr. for commodities.  The indicator does not provide an indication of price trend, simply the degree of price volatility. The average true range is an N-day smoothed moving average (SMMA) of the true range values. Wilder recommended a 14-period smoothing. Therefore, ATR (14) value for ANF stock is 1.04.

Is the Stock Overbought or Oversold?

On the other hand, Relative Strength Index (RSI 14), a momentum oscillator that measures the speed and change of price movements, for this individual stock stands at 44.98. This indicator is developed by J. Welles Wilder. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30.

Stock’s Valuation in Spotlight:

For trailing twelve months, Abercrombie & Fitch Co (NYSE: ANF)’s price to sales ratio stands at 0.50. Its price to book ratio for the most recent quarter is 1.40, however its price to cash per share ratio for the same period is 2.61. The stock has PEG ratio of 4.19 whereas its trailing twelve month P/E ratio is 75.37.

Analysts’ Recommendation in Limelight:

In terms of Buy, Sell or Hold recommendations, Abercrombie & Fitch Co (NYSE: ANF) has analysts’ mean recommendation of 2.90. This is according to a simplified 1 to 5 scale where 1 represents a Strong Buy and 5 a Strong Sell.

Disclaimer: Any news, report, research, and analysis published on Stocktradingpoint.com are only for information purposes. Stock Trading Point (STP) makes sure to keep the information up to date and correct, but we didn’t suggest or recommend buying or selling of any financial instrument unless that information is subsequently confirmed on your own. Information in this release is fact checked and produced by competent editors of Stock Trading Point; however, human error can exist.

Joy Martin

Stock Trading Point, Services, Reporter

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