Stockal Data Shows Analyst Sentiment Can Predict Price Movement

An analysis of Stockal data shows that the Confidence Meter, a 1-100 scale measuring the combined perspectives of over 200 Wall Street analysts, can be an indicator for potential price action as far as several months in advance.

Stockal took a look at four major tech stocks to see how correlated the two are. Here are the results.

Apple Inc. AAPL

The Chart:

The Breakdown:

Looking at the chart above, you can see that right around March 2015 the Confidence Meter for Apple fell from around 80 to below 60. Around the same time, Apple’s stock began to trade down from around $130 to $123.

In late 2015, the Confidence Meter fell from near 90 to all the way below 60. Apple’s stock followed suit by trading down from nearly $120 to below $100 as it entered 2016. The Confidence Meter has been bullish on Apple as of late, and the stock has traded up over 11.5 percent over the past month.

Netflix, Inc. NFLX

The Chart:

The Breakdown:

From January until early July of 2015, heading into their second quarter earnings, the Confidence Meter trended upward from 50 to 96. During that same time the stock followed suit, going from around $350 to over $700. The sharp subsequent drop in price was preceded by a few days by a drop in the Confidence Meter.

Facebook Inc FB

The Chart:

The Breakdown:

The spring of 2014 saw the Confidence Meter shoot up from about 75 to 96. Near the end of the year, the stock traded up from about $65 to $80. When the Confidence Meter fell from about 90 to 75 in January of 2016, Facebook stock followed suit by simultaneously falling from about $104 to $94. The Stockal Confidence Meter is bullish on Facebook currently, and the stock is trading up over seven percent over the past month after a successful earnings report in July.

Alphabet Inc GOOG

The Chart:

The Breakdown:

In late 2014 the Confidence Meter on Google fell from around 90 to just under 80, and Google stock responded by falling from around $590 to $540. When the Confidence Meter rose from around 75 to just above 80 in late 2015, and the stock spiked from around $610 to $750. The Stockal Confidence Meter has been bullish on Google as of late, and the stock is up over 10 percent over the last three months.