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1512 St Gallen Report

Week 23 Complimentary Market: Visa

Our complimentary market analysis this week looks at Visa.


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Indicator 1: Commitments of Traders Data

Score: 40.60 / 100

The Commitments of Traders indicator shows a reading of 40.60, which is above the model’s required 39 level to suggest a coming price direction change. However, this indicator showed a breach of the 39 mark for single stocks during the last two weeks and has been trending downwards in the past few weeks. This means that Commercials seem to have become extremely short during Visa’s recent upwards run, suggesting that there may be a second attempt this year of the price to move towards the downside.



Indicator 2: Valuation

Score: 99.05 / 100

The model’s Valuation Indicator for Visa is, at 99.05, very close to the maximum possible score now. This suggests that Visa is extremely over-valued and therefore the market should move to the downside.



Indicator 3: Retail (The Crowd) vs Professional

Score: 90 / 100

The Crowd Indicator (the upper red line) score of 90 is extremely high and it has been above the 80 mark that the model requires to suggest a price direction change for about 5 weeks now. Therefore, the Crowd seems to have become very bullish towards Visa during its recent upwards move. Since the indicator suggests that retail investors are often on the wrong side, the Crowd indicator implies that this market might top soon.



Indicator 4: Trend Strength

Score: 31.25 / 100

The model’s Trend Strength Indicator reads 31.25 which is below the indicator’s desired 40 score to suggest a price direction change. At the beginning of April, it reached the 40 mark, however. This current change of direction is a sign to the model that the market is looking for a top.



Indicator 5: Seasonals

Direction / Timescale: N/A / N/A

Due to a lack of data, the Seasonals Indicator is not available for Visa.

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Indicator 6: Overbought / Oversold

Score: 89.74 Short-term, 76.41 Mid-term

The model’s Overbought / Oversold Indicator suggests that Visa is, with a score of 89.74 out of 100, rather overbought in the short-run and, with a score of 76.41, very close to the overbought zone in the mid-run. This means that this indicator suggests a change of price direction in the short-term, followed by a formation of a mid-term top.



Indicator 7: Driving Force

Driver: Commercials

The Driving Force Indicator for Visa shows that the confidence (negative fear) in the market (the grey line), which is driven by retail investors, is close to historical highs. This is a sign of weakness in the market. The grey line should still rise a bit further to anticipate a mid-term price direction change, however, all requirements are checked for the Driving Force indicator to suggest a short-term trend change



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