Money Markets

First Data Corporation (FDC): Examining the Technicals

The recent development in First Data Corporation (NYSE:FDC) stock have made investors to juggle around with their spending. At the end of the day, it’s only a stock’s performance that matters. With this in mind, it’s worth taking a look at the chart to get a sense of where it might be headed in the future.

How has the stock performed recently?

First Data Corporation (NYSE:FDC) has been trading in a bearish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of FDC has decreased -7.59%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -126%. After the latest session, which saw the stock close at a price of $16.32, FDC sits below its 52-week high.

Momentum indicators

Of course, these surface-level price movements don’t tell us much about the direction that FDC may be headed in the future. If we want to get a sense of FDC’s future performance, we have to look at the speed and size of these price movements. Using what are known as momentum indicators, we can use the stock’s price momentum to get a sense of whether the stock is in the midst of, or nearing the end of, a current trend. 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 FDC is 41.68%, 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 20.50%, tells a different story, and suggests that FDC currently trades in oversold territory.

What do the trading volumes reveal?

In addition to price, analysts use volume trends to predict future performance. The level of trading activity in a stock is often a good proxy for the level of interest and enthusiasm for the name within the investment community. A sudden increase in activity can be a sign that investors are trading in anticipation of a catalyst. First Data Corporation (FDC) average trading volume of 7,956,400 during the past month is 44.28% 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?

FDC is currently undervalued by -22.58% relative to the average 1-year price target of $21.08 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 1.80, which implies that analysts are generally bullish in their outlook for FDC over the next year.

How risky is the stock?

Absolute price performance isn’t the only thing analysts consider when predicting future performance: volatility matters as well. Beta, which measures the stock’s volatility relative to the overall market, is a simple but effective metric for assessing risk.

During the past couple of weeks, FDC average daily volatility was 33.70%, which is -7.21 percentage points higher than the average volatility over the past 100 days.




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