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Discovery Communications - Uncovering a Trend 
Wednesday, April 7, 2010
By Gibbons Burke
Discovery Communications (DISCA3) shares have rallied three trading days in a row, with Tuesday gaining a 'big' 1.5% in a trend-day move to the upside which lofted the stock to a new all-time high price of $34.67 before settling to close at $34.62.
Q: How has DISCA performed in the past when it has seen a 'trend day' move higher, where it opens in the lower 20% of the high-low range, and closes within 20% of the upper end of the range?
A: According to the 19 previous occurrences of this event, EventEdge indicates that DISCA has shown a strong bullish edge that peaks 38 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, 6 April 2010) is Friday, 28 May 2010. DISCA rallies in 84% of the cases (16 of 19) by an average of 12.1% relative to the close on the event date. The average of the 3 declines is -2.8%. The overall return of the 19 cases is 9.8%, which, based on the close of DISCA on the event date ($34.62), provides a target price of $38.01.
Click here4 to see this trading idea in EventEdge®.
Note two recent occurrences of this event show gains of 18.3% after 38 trading days since the occurrence on February 9th, and 8.5% in the 19 trading days since it occurred on March 9th.
Gibbons Burke5 is editor of MarketHistory.com.
 |
Let variable values:
@ = GII.DISCA.NASDAQ
theEvent = IF {
(High of @ - @) is less than (0.2 * (High of @ - Low of @))
AND
(Open of @ - Low of @) is less than (0.2 * (High of @ - Low of @)) }
THEN 1
ENDIF
Date Day t+5 t+10 t+19 t+29 t+38
10/14/2008 Tue -2.9 -17.8 2.7 -0.5 9.2
10/29/2008 Wed 11.2 -2.7 7.4 11.3 10.3
11/26/2008 Wed -9.4 -8.4 -3.3 4.3 3.9
12/30/2008 Tue 5.3 6.7 8.2 -0.2 8.0
02/27/2009 Fri -2.5 9.1 6.5 15.7 14.9
03/23/2009 Mon -3.7 7.5 6.4 21.7 16.2
04/21/2009 Tue -0.4 16.1 9.6 22.6 18.7
05/19/2009 Tue 6.3 9.3 2.0 9.4 11.4
06/26/2009 Fri 0.9 2.9 10.3 18.3 15.6
07/14/2009 Tue 4.3 6.5 11.1 12.8 13.9
08/03/2009 Mon 0.3 -4.4 1.9 11.7 9.1
08/19/2009 Wed 7.7 2.5 18.1 15.9 20.5
09/10/2009 Thu 2.9 0.0 6.3 4.6 -1.4
09/28/2009 Mon 3.9 6.8 5.0 6.1 9.8
10/29/2009 Thu 3.2 4.9 10.9 10.4 7.6
11/13/2009 Fri 2.0 4.5 4.5 1.6 6.9
11/27/2009 Fri -0.6 1.1 -1.4 3.5 -2.3
01/05/2010 Tue -1.3 -0.2 -8.4 -2.6 -4.6
02/09/2010 Tue 7.2 9.3 9.0 13.9 18.3
03/09/2010 Tue 1.7 4.5 8.5 NaN NaN
04/06/2010 Tue NaN NaN NaN NaN NaN
Avg 1.8 2.9 5.8 9.5 9.8
AvgPos 4.4 6.1 7.6 11.5 12.1
AvgNeg -3.0 -6.7 -4.4 -1.1 -2.8
PctPos 65.0 75.0 85.0 84.2 84.2
PctNeg 35.0 25.0 15.0 15.8 15.8
Maximum 11.2 16.1 18.1 22.6 20.5
Minimum -9.4 -17.8 -8.4 -2.6 -4.6
StdDev 4.7 7.4 5.8 7.5 7.1
ZStat 0.4 0.4 1.0 1.3 1.4
Variance 22.0 54.2 34.0 56.6 51.1
21 Occurrences |
Comments:
Web Address of this trading idea:
Links:
2 http://www.markethistory.com/content/analog/analog.html?ticker=DISCA
3 http://quote.morningstar.com/stock/s.aspx?t=DISCA
4 http://www.markethistory.com/content/events/stocks/chart.html?ticker=DISCA&events=TrendDayUp0&date=2010-04-06
5 http://www.markethistory.com/staff/detail.html?s=gibbons