Intraday Trade Secrets – Tenneco Inc (NYSE: TEN)

U.S. stocks closed mostly higher on Tuesday, as a sharp rally in technology stocks assisted the S&P 500 and the Nasdaq shake off an early decline. However, the Dow fell for a third straight session as caution remained high ahead of the conclusion of a Federal Reserve policy meeting and fresh developments in global trade.

The Dow Jones Industrial Average fell 64.10 points, or 0.27%, to end at 24,099.05. While the blue-chip average ended well off its lows of the session, having formerly dropped more than 1%, it notched third straight daily decline. At its low of the day, the Dow was on track for its lowest close since April 2.

The S&P 500 index rose 6.75 points to 2,654.8, a gain of 0.25%. The Nasdaq Composite Index rose 64.44 points, or 0.91%, to finish at 7,130.70, supported by a rise in Apple and other major technology companies.

Tech was by far the biggest outperformer of the day, with the sector ending up 1.5%. That was enough to offset broad weakness elsewhere, as six of the 11 primary S&P 500 sectors ended lower and other industries saw only modest gains on the day. Among the biggest decliners were consumer staples, which fell 0.9%, and energy, which lost 0.6%.

The Federal Reserve began a two-day meeting Tuesday. When it wraps, the central bank is predictable to leave interest rates on hold and signal no change to a tightening path of two more rate increases in 2018. Changes to Fed policy—in addition to interest rates, the U.S. central bank is shrinking the size of its balance sheet—are widely seen as one of the biggest headwinds facing markets.

The U.S. tariffs on aluminum and steel imports were in focus again. President Donald Trump late Monday gave top allies—the European Union, Canada and Mexico—an extension to the tariff exemption to allow more time negotiate a new pact to avoid the levies. The tariffs of 25% on steel and 10% aluminum—already in effect against China, Russia, Japan and others—were slated to come into effect on May 1, but have now been pushed back to June 1. (Source: MarketWatch)

Hot Stock Analysis: Tenneco Inc (NYSE: TEN)

Investors rushed to trade on Tenneco Inc (NYSE: TEN) Tuesday, soon after a drastic change of 2.98% in the share price was observed and the stock become able to close its trade at $46.02. The stock becomes active when traders or investors changed hands with 1,194,964 shares contrast to the three-month volume average of 654.46K shares. The ratio between current volume and 3-month average value, also known as Relative volume was observed at 1.86, validating the stock’s In Play state.

Stock Technical’s & Performances to Explore:

Based on a recent bid, this stock (TEN) was trading at a distance of -29.84% from 52-week high and 3.58% away from its 52-week low price. We observed -7.07% rate of return for a stock for the last 5-trading days, which was maintained for the month at -13.30%. Likewise, the performance for the quarter was recorded as -22.94% and for the year was -23.64%. The comparison of these above mentioned historical values gives an idea to investor whether the stock is ready to shift trend (up to down or down to up) or how the stock has recovered the losses or shed gains during its historical phase. For example, if stock’s weekly and monthly performances are positive as compared to year and YTD performance percentage also seems to decrease in comparison to the previous year performance, then one can say that the stock is bouncing back and may able to gain more and more in near future and vice versa. Although stock’s historical performances are key to consider, don’t invest (or not invest) based solely on it. It’s just one measure of value. As a serious shareholder, you need to look at plentiful factors that can assist you determine whether any given stock is a good investment.

Simple Moving Averages (SMAs) in Focus:

Moving averages is one of the key indicator and the most powerful tool used by traders. A simple moving average is easy to calculate, which allows it to be employed fairly quickly and easily. A textbook definition of a moving average is an average price for a security using a specified time period. The simplest form of a moving average, appropriately known as a simple moving average (SMA), is calculated by taking the arithmetic mean of a given set of values. For example, to calculate a basic 10-day moving average you would add up the closing prices from the past 10 days and then divide the result by 10. If a trader wishes to see a 50-day average instead, the same type of calculation would be made, but it would include the prices over the past 50 days and the same process goes on for 200 days.

Do SMAs Signal a Trend Reversal?

Based on a recent bid, this stock (TEN) was trading at a distance of -12.08% from 20 days simple moving average, and its distance from 50 days simple moving average is -14.31% while it has a distance of -19.06% from the 200 days simple moving average. A moving average’s greatest strength is its ability to assist a trader identifies a current trend or spots a possible trend reversal. Moving averages can also identify a level of support or resistance for the security, or act as a simple entry or exit signal.

Stock’s Volatility Analysis:

Volatility is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns. It generally deals with the amount of uncertainty or risk about the size of changes in a security’s value. It can either be calculated by means of the standard deviation or variance between returns from that same security or market index. The Rule of thumb is higher the volatility, the riskier the security. A higher volatility means that a security’s value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security’s value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.

What about TEN Stock’s Volatility?

According to finviz data, TEN stock’s volatility for the week is measured at 3.75%, while for the month it is maintained at 3.49%.

An Eye on Beta Factor:

One gauge of the relative volatility of a specific stock to the market is its beta. A beta approximates the overall volatility of a security’s returns against the returns of a relevant benchmark (usually the S&P 500 is used). Presently, Beta factor for TEN stock stands at 1.81. A beta of 1 indicates that the security’s price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. For example, if a stock’s beta is 1.2, it’s theoretically 20% more volatile than the market. Conversely, if an ETF’s beta is 0.65, it is theoretically 35% less volatile than the market. Therefore, the fund’s excess return is predictable to underperform the benchmark by 35% in up markets and outperform by 35% during down markets.

What Do Analysts’ Recommend?

Analysts mean recommendation for the stock is 2.70, (where 1 is Strong Buy and 5 is Strong Sell).

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Eric Clapton

Eric Clapton

I am Eric Clapton and has over 14 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.