Each week Forcerank administers a handful of contests designed to answer one simple question: will stock ABC perform better than stock XYZ this week? After extensive testing, we confirmed that the consensus rankings delivered a high persistence of accuracy. Using a market neutral strategy the data produced 19% annualized returns with a resounding 2.75 Sharpe Ratio. By looking at changes in the data, Forcerank acts as a sentiment indicator that can help investors gauge the market’s mood on a weekly basis.
Delta Airlines (NYSE:DAL) | Airlines: Last week Delta (DAL) reported mixed fourth quarter results, beating the Estimize consensus on the top line but missing earnings estimates by 2 cents. Analysts forecasted for a strong quarter after initial reports claimed PRASM and other key financial metrics would perform well, but it appears the rise of discount retailers have made a bigger impact. Shares are now down about 3% since its report, with signs of a continued pull back on the horizon. A bearish crossover in the MACD along with a 3 month volume profile consistent with a sub $40 price per share point to additional downside. It also doesn’t bode well that fellow major airliner, United Continental Holdings Inc (NYSE:UAL), crushed its Q4 numbers when Delta had its troubles.
Skechers USA Inc (NYSE:SKX) | Apparel: Skechers' (SKX) ups and down lately are difficult to follow, unless of course you use the Forcerank consensus data. Lo and behold this week’s sentiment indicator points to a shift to the downside. The stock declined 2.5% in the past 2 days on a technical breakdown to start the week. A bearish crossover in the MACD along with a bounce off the monthly pivot point signal weak price action. Meanwhile the open gap at $23 per share represents an 8% downside from the current trading price. The company views Asia and additional endorsement deals as a way to revive fundamentals and therefore share prices, but in the meantime investors can come to expect more of the same.
Amazon (NASDAQ:AMZN) | Ecommerce: Investors favorite stock of 2016 might be headed for a rough patch. The Forcerank consensus data pegged Amazon (AMZN) as one of the strongest shorts this week given the stock’s recent run. At a price of nearly $807 per share, the stock currently trades in overbought territory above the upper Bollinger Band. Meanwhile the 6 month volume profile and an open gap at $760 call for a 5-6% pullback. Given its strong fundamental support of late along with a growing list of products the pipeline, investors shouldn’t expect a long lived downturn.
Box Inc (NYSE:BOX) | Enterprise Technology: Shares of Box (BOX) climbed last week after Wells Fargo initiated coverage with an outperform rating. After a week of gains, though, it’s common to see a stock pull back as is the case with Box. The gap formed last week at about $14.75 along with a 14 day RSI above 75 signal weak price action on the horizon. Meanwhile, Box historically performs poorly around earnings season due to its inability to turn a profit or accelerate revenue growth. Initial estimates from Estimize suggest fourth quarter results will be unable to reverse this ongoing trend.
Chipotle Mexican Grill (NYSE:CMG) (CMG) | Restaurants: Earlier this week an analyst at JPMorgan downgraded Chipotle (CMG) to neutral from overweight citing concerns over compressed margins, increasing labor and commodity costs and generally lower demand. The burrito chain kicked off 2017 with a smooth start but it didn’t take long for it to hit a rough patch. A slew of fundamental concerns plus a lack of technical support only spells trouble for shareholders. The stock continues to move from the upper Bollinger Band to the middle as it closes in on a $370 gap below. After calling for a buy at the end of 2016, the Forcerank Sentiment Indicator returned to the standpoint of selling Chipotle in the near term.