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Putting National Presto Through Benzinga's Securities Lending Volatility Indicator, Powered By Tidal Markets

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Putting National Presto Through Benzinga's Securities Lending Volatility Indicator, Powered By Tidal Markets

Benzinga’s Securities Lending Volatility Index (SLVX), powered by Tidal Markets, is an indicator that forecasts stock market activity for broader indices and individual securities.

To demonstrate the use of the SLVX as a stock market indicator, we show how changes in the SLVX predicted a -15.19 percent decline in National Presto Industries, Inc. towards the end of February 2019.

National Presto Industries, Inc. (NYSE: NPK) provides housewares, small appliances, and defense products, primarily to North America.

At the beginning of February, NPK experienced a strong price rally by gaining 8.99 percent over the span of two weeks of trading.

After the stock peaked on February 15th at $130.50, the stock began to pull back sharply, losing -8.17 percent on the following trading day and closing at $119.84 per share.

Throughout this time, the SLVX showed a muted response to the sharp market decline, maintaining the stock’s average volatility rate of 3.3, as seen throughout all of 2018 and 2019 up to this point.

Over the next 3 trading days, NPK rose back in share price, regaining 3.73 percent to close at $124.31 on February 22nd.

At the start of our analysis, 2/21/2019, the SLVX reflected a volatility rate of 2.71. As NPK began to fall in price again on February 25th, the SLVX denoted a strong uptick in volatility with the SLVX jumping to 29.19 – indicating strong evidence that the stock’s decline was far from over.  

Date

NPK

SLVX

2/21/2019

$       121.00

2.719

2/22/2019

$       124.31

3.137

2/25/2019

$       122.02

29.198

2/26/2019

$       118.80

29.025

2/27/2019

$       119.52

28.765

2/28/2019

$       112.14

82.529

3/1/2019

$       111.97

2.962

3/4/2019

$       102.77

3.129

3/5/2019

$       102.62

3.334

Between February 21st and March 5th, 2019, National Presto Industries lost -15.19 percent, or $18.19 per share over a nine-day stretch. Meanwhile, the SLVX saw the volatility of NPK inversely rally to over 80, portraying strong signs of the stock’s continued decline.

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As the stock began to level off during the first few trading days of March, the SLVX quickly reversed its direction, signifying the stock had reached support and could likely rebound in the following days, representing a buying opportunity.

Posted-In: Securities Lending Volatility Indicator SLVX Tidal MarketsLong Ideas Markets Trading Ideas General

 

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