Strategy using the II website
Last month our worked through strategy example picked out Meridian Biosciences (VIVO) as a buy at $17.84. Following the pick, the stock experienced a sharp drop on the 16th, a move that took the stock below our stop. The drop was down to poor results and associated analyst comments. One such analyst comment is amusing in the light of recent events.
"It appears that the weaker flu season had a significant impact on the business in the quarter and, with significant inventory still the in the channel, could affect future periods as well." Willian Blair & Co analyst Brian Weinstein wrote in a note to clients.
Suffice to say, the stock has since sharply reversed. The main lesson that can be taken for this is that small cap health stocks are notoriously volatile and should be traded with extreme caution.
Using Short-term-composite indicator to aid investment decision
At Investors Intelligence we have a proprietary indicator called the Short-term Composite Indicator, an un-weighted average of 29, mostly in-house, indicators. The barometer is typically leading, by up to a week, and it last provided a buy signal on the 4th of March as it reversed up from zero on the P&F chart. Similar signals were provided at the October and November lows.
The chart here appeared in the ETF Review, on March-13 and provides good examples of the buy and sell signals generated by the indicator.
Consulting this indicator each week is a useful tool to any investment strategy. On the 4th of May it hit 89.7, its highest level in 2.5 years and our current thoughts of this reading may surprise you.
We analyze and publish the Short-term Composite Indicator daily in the US Hotline.