Money Markets

Reading the Tea Leaves for Comcast Corporation (CMCSA)

Latest evolution in the price of Comcast Corporation (NASDAQ:CMCSA) stock has been one of the most talked about matter among the interested investors. Many analysts use price trends and patterns to predict future performance, and we can glean some important insights about CMCSA by examining the chart.

How has the stock performed recently?

Comcast Corporation (NASDAQ:CMCSA) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of CMCSA has decreased -9.19%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -107%. After the latest session, which saw the stock close at a price of $38.54, CMCSA sits below its 52-week high.

Momentum indicators

Of course, these surface-level price movements don’t tell us much about the direction that CMCSA may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. 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 CMCSA is 41.89%, 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 11.64%, tells a different story, and suggests that CMCSA currently trades in oversold territory.

What do the trading volumes reveal?

Price isn’t the only tool analysts use to forecast future performance. Volume patterns can also reveal some important insights. If, for instance, a stock’s volumes suddenly increase by a significant amount, it’s usually a sign that the level of conviction behind the trade is high. Investors may feel very strongly about the future direction of the stock in question. Comcast Corporation (CMCSA) average trading volume of 29,126,320 during the past month is 29.82% 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?

CMCSA is currently undervalued by -21.46% relative to the average 1-year price target of $49.07 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 CMCSA 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.

Comcast Corporation (NASDAQ:CMCSA) has a beta of 1.07, 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. CMCSA therefore has an above average level of market risk. During the past couple of weeks, CMCSA average daily volatility was 33.52%, which is -6.49 percentage points higher than the average volatility over the past 100 days.

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