Hot Stock in Focus – Medtronic plc (NYSE: MDT)

Stocks closed higher on Monday amid hopes of a potential breakthrough in trade tensions between the U.S. and China, the world’s two leading economies.

The Dow Jones industrial average rose 68.24 points to 24,899.41, with UnitedHealth and Walmart as the best-performing stocks in the index. The 30-stock index also extended its winning streak to eight straight days. The S&P 500 gained 0.09 percent to close at 2,730.13, with energy, health care and materials outperforming. The Nasdaq composite advanced 0.11 percent and finished at 7,411.32.

President Donald Trump pledged Sunday to assist Chinese technology firm ZTE Corp to “get back into business, fast” after a U.S. ban had significantly hampered the Asian company.

Trump’s tweet on Sunday came ahead of the second round of trade talks between the U.S. and China this week. Trade officials are seeking to find a way to resolve an ongoing trade dispute, although Beijing has already said it will not change its current position over the coming days.

Trump and Kim are planned to meet in Singapore on June 12. The encounter between the two leaders would mark the first-ever meeting between a U.S. president and a North Korean leader.

Optical component makers saw their stocks jump on Trump’s ZTE news, with Oclaro, Lumentum and Finisar rising 2 percent, 2 percent and 1 percent, respectively. Acacia Communications also surged 8 percent.

Chip stocks rose Monday after a report said Chinese regulators will restart a review of the projected acquisition of NXP Semiconductors by Qualcomm. NXP shares jumped 11 percent on the news, while Qualcomm’s stock gained 2 percent. The Vaneck Vectors Semiconductor ETF (SMH) 1.7 percent on the news.

Still, Commerce Secretary Wilbur Ross said the gap between the U.S. and China “remains wide.” He also said: “Before landing in China we sent them an extremely detailed list of our needs, and they responded with a similarly detailed but as you can imagine quite different list of their proposals.”

In corporate news Monday, Xerox fell more than 4 percent after the company abandoned a $6.1 billion deal with Japanese firm Fujifilm as part of a settlement between Carl Icahn and Darwin Deason. (Source: CNBC)

Hot Stock Analysis: Medtronic plc (NYSE: MDT)

Investors rushed to trade on Medtronic plc (NYSE: MDT) Monday, soon after a drastic change of 0.72% in the share price was observed and the stock become able to close its trade at $86.18. The stock becomes active when traders or investors changed hands with 4,244,491 shares contrast to the three-month volume average of 5.20M shares. The ratio between current volume and 3-month average value, also known as Relative volume was observed at 0.74, validating the stock’s In Play state.

Stock Technical’s & Performances to Explore:

Based on a recent bid, this stock (MDT) was trading at a distance of -3.95% from 52-week high and 12.79% away from its 52-week low price. We observed 1.60% rate of return for a stock for the last 5-trading days, which was maintained for the month at 8.31%. Likewise, the performance for the quarter was recorded as 7.40% and for the year was 3.31%. 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 (MDT) was trading at a distance of 5.93% from 20 days simple moving average, and its distance from 50 days simple moving average is 7.13% while it has a distance of 6.10% 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 MDT Stock’s Volatility?

According to finviz data, MDT stock’s volatility for the week is measured at 1.75%, while for the month it is maintained at 1.77%.

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 MDT stock stands at 0.95. 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 2.20, (where 1 is Strong Buy and 5 is Strong Sell).

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Adler Smith

Adler Smith

I am Adler Smith and I’m passionate about business and finance news with over 5 years in the industry starting as a writer working my way up into senior positions. I am the driving force behind “Stocks Pen” with a vision to broaden the company’s readership throughout 2016. I am an editor and reporter of news about “Healthcare” Sector Companies.