The recent development in QEP Resources, Inc. (NYSE:QEP) stock have made investors to juggle around with their spending. Analysts often use price and volume data to predict future stock performance. In the case of QEP, the chart has some interesting things to say about where the stock might be headed.
How has the stock performed recently?
QEP Resources, Inc. (NYSE:QEP) in the last month has increased +1.67%. Shares are now up over the past year, outperforming the broad market by -100% and outperformed a peer group of similar companies by 325%. After the latest session, which saw the stock close at a price of $8.54, QEP sits below its 52-week high. QEP Resources, Inc. (NYSE:QEP) has been trading in a bearish manner, based on the relative positions of the stock’s 20 and 200 day moving averages.
Of course, these surface-level price movements don’t tell us much about the direction that QEP may be headed in the future. Fortunately, there is way to use the speed and magnitude of these price changes to predict future performance, thanks to what are known as momentum indicators. As momentum slows, it might be a sign that a support or resistance level has been reached, and that a trend is about to reverse. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for QEP is 46.89%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 44.15%, tells a similar story, and suggests that QEP currently trades in neutral territory.
What do the trading volumes reveal?
Volume patterns can also be useful for predicting future performance. When trading activity is abnormally high, it’s often a sign that the market feels particularly strong in one way or another about the future direction of a stock. QEP Resources, Inc. (QEP) average trading volume of 5,870,445 during the past month is 11.2% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.
What do the analysts think?
QEP is currently undervalued by -36.51% relative to the average 1-year price target of $13.45 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.10, which implies that analysts are generally neutral in their outlook for QEP over the next year.
How risky is the stock?
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.
QEP Resources, Inc. (NYSE:QEP) has a beta of 1.70, compared to a beta of 1 for the market, which implies that the stock’s price movements are more extreme than the market as a whole. QEP therefore has a above average level of market risk. During the past couple of weeks, QEP average daily volatility was 57.10%, which is 3.19 percentage points lower than the average volatility over the past 100 days.