Pivot Pricing
Project Aim
To build an investment strategy based purely based on investor sentiments. Our goal is to understand the investor sentiments at pivot points of a stock price. It is based on a hypothesis that investors get influenced by the stock price when the number of digits in price changes and hence leads to surging and fall in stock prices.
Members
- Priyesh V Gandhi
- Priyanka
- Jagdish
- Luv,
- Shivam
- Suraj
Work Done
We analyzed the different stocks based on when there is a change in the number of digits of the stock price. Stock prices show a continuous pattern at pivots points. Pivots points considered by our project is 100. We analyzed around 500 stocks and based on sectors, Market Cap, their pricing, and collect data when the stock hit the pivot point and followed by 3 months prior and after in steps of months.
Future Scope
The project can be extended further to other pivot points like 1000 and also working on finding more pivot points and use them to generate returns within a span of 3-4 Months and tracking based on the pivot points
Analysis
- Long(Buy)
- Short(Sell)
Long Position
A long position is the buying of a stock, commodity, or currency with the expectation that it will rise in value. Holding a long position is a bullish view.
Refer this link for more details
Soaring stock price
When a stock price surging and hits a pivot point it is more likely to continue the bull run for the next 3 months and also provides an opportunity for trading and using the gains to understand the investor motive.
In 1 Month Span
Out of every 100 companies we analyzed we observed a pattern 67 companies obeyed our theory of a run at pivot price and generated a return of 30.16%
Based on this we can put forward a trading strategy to look for stocks touching pivots points and put a stop loss of 10% which would limit your losses in case the theory isn’t obeyed.
1 month Span returns
Investment = 100*100 =10000
Return
67 companies 30.16%
33 companies -10%
Return 1690
ROI(%) 16.9% in a span of 1 month
In 3 Month Span
Out of every 100 companies we analyzed we observed a pattern 62 companies betrayed our theory of a run at pivot prices and generated a return of 59%
Based on this we can put forward a trading strategy to look for stocks touching pivots points and put a stop loss of 10% which would limit your losses in case the theory isn’t obeyed.
1 month Span returns
Investment = 100*100 =10000
Return
62 companies 59%
38 companies -10%
Return 3278
ROI(%) 32.78% in a span of 3 month
Hence Our analysis holds true and can be used as part of investment strategy for Short term 1-3 Months
Note: not a recommendation, before using this strategy do your analysis.
Short Selling
Short selling is an investment or trading strategy that speculates on the decline in a stock or other securities price. It is an advanced strategy that should only be undertaken by experienced traders and investors.
Refer this link for more details.
Falling stock prices
When a stock price falling and hits a pivot point it is more likely to continue the bear run for the next 3 months and also provides an opportunity for trading and using the gains to understand the investor motive.
In 1 Month Span
Out of every 100 companies we analyzed we observed a pattern 80 companies obeyed our theory of a run at pivot price and generated a return of 15.7% on shorting.
Based on this we can put forward a trading strategy to look for stocks touching pivots points and put a stop loss of 10% which would limit your losses in case the theory isn’t obeyed.
1 month Span returns
Investment = 100*100 =10000
Return
80 companies 15.7%
20 companies -10%
Return 1056
ROI(%) 10.56% in a span of 1 month
In 3 Month Span
Out of every 100 companies we analyzed we observed a pattern 62 companies betrayed our theory of a run at pivot prices and generated a return of 26.5% on shorting.
Based on this we can put forward a trading strategy to look for stocks touching pivots points and put a stop loss of 10% which would limit your losses in case the theory isn’t obeyed.
1 month Span returns
Investment = 100*100 =10000
Return
80 companies 26.5%
20 companies -10%
Return 1920
ROI(%) 19.2% in a span of 3 month
Hence Our analysis holds true and can be used as part of investment strategy for Short term 1-3 Months
Note: not a recommendation, before using this strategy do your analysis.
Results
The analysis holds true and share prices show a different behavior at pivot points and the assumed theory is true.
Websites for analysis
Use this to screen stocks based on the need for investment strategy.
Use this to study the events of the stock and there impacts.