Fiserv Inc. - Very Big Decline   Friday, May 14, 2010
By Gibbons Burke
 Fiserv (FISV) shares took it on the chin on Thursday, dropping a 'very big' 5.0% to close right at trendline support just below the $50 level. History indicates this may be a good time to buy the stock cheap, and given the chart setup, if wrong, you'll know quickly.
The stock closed at $49.95, which sounds like a bargain price, but there was no earth-shattering news to bring about the two standard deviation decline, so the washout may not be over with. When the news which prompted this decline hits the nets, it might be the best time to take a position on this idea.
The stock made a new 20-day low, and as often happens at the same time, since the two indicators are closely correlated, it closed below the lower Bollinger band also. From a trend perspective, the longer term trend is still intact, with the share price closing above the 200 and 100-day averages, but yesterday it crossed below the 50-day average. Q: How has FISV performed before when it has seen a 'very big' one-day percentage drop that is more than two standard deviations stronger than the average one-day percentage move over the last 30 trading days, and the stock also closes below the lower Bollinger band? A: According to the 37 previous occurrences of this event, EventEdge indicates that FISV has shown a weak bullish edge that peaks 26 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, 13 May 2010) is Friday, 18 June 2010. FISV rallies in 81% of the cases (30 of 37) by an average of 10.6% relative to the close on the event date. The average of the 7 declines is -8.6%. The overall return of the 37 cases is 7.0%, which, based on the close of FISV on the event date ($49.95), provides a target price of $53.45.
Refining the study just a bit, I looked further at the performance of the stock after this event takes place on a Thursday and it generated an even stronger bullish edge in terms of both consistency and the overall return target: FISV has shown a very strong bullish edge that peaks 28 trading days after the event on Thursday. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, 13 May 2010) is Tuesday, 22 June 2010. FISV rallies in 100% of the cases (10 of 10) by an average of 10.8% relative to the close on the event date. The overall return of the 10 cases is 10.8%, which, based on the close of FISV on the event date ($49.95), provides a target price of $55.34. Click here for a technical chart showing the trendline support for FISV mentioned above. Gibbons Burke is editor of MarketHistory.com.
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| | * * * Table 1 - All Occurences * * *
Let variable values:
@ = GII.FISV.NASDAQ
theEvent = IF
1 value percent_move of @ is less than
(30 day average of 1 value percent_move of @ -
(2 * 30 day std_dev of 1 value percent_move of @
)
)
AND
@ crosses below bollinger_low ( @, 20 units, 2 )
THEN 1
ENDIF
Date Day t+25 t+26 t+30 t+31 t+33
08/10/1988 Wed -12.2 -9.8 -8.5 -7.3 -6.1
11/01/1988 Tue 4.1 5.5 5.5 2.7 3.4
06/29/1989 Thu 10.2 9.1 5.7 6.8 4.5
10/20/1989 Fri 1.2 1.2 4.7 4.7 8.1
01/26/1990 Fri -1.2 -1.2 4.7 4.1 3.5
06/26/1992 Fri 14.0 16.3 16.3 12.8 15.1
11/05/1992 Thu 11.5 11.5 8.0 8.0 10.3
02/17/1993 Wed 11.6 10.7 10.7 8.0 4.0
12/02/1993 Thu 2.6 1.3 3.8 1.3 1.3
01/21/1994 Fri 5.3 3.9 10.5 11.2 9.2
07/12/1994 Tue 6.5 9.7 9.1 14.9 15.6
10/25/1995 Wed 3.4 4.9 14.1 14.6 12.2
01/09/1996 Tue 12.3 12.3 9.6 10.1 7.9
03/07/1996 Thu 3.6 4.0 4.0 3.1 11.7
12/12/1996 Thu 6.6 4.8 2.6 1.5 0.7
08/29/1997 Fri 9.4 10.0 5.0 1.4 0.8
10/27/1997 Mon 21.1 21.2 20.4 18.9 13.8
12/18/1997 Thu 19.3 21.9 22.2 21.9 22.3
06/30/1999 Wed -4.6 -10.2 -9.8 -3.8 -5.4
10/05/1999 Tue 25.2 20.3 26.7 19.2 28.3
01/11/2000 Tue -6.2 -11.4 -17.9 -17.6 -20.1
10/24/2000 Tue 12.2 20.0 21.7 27.1 11.4
12/20/2000 Wed 24.9 21.4 20.1 23.6 22.4
09/04/2001 Tue 2.3 2.6 5.0 11.1 14.3
10/01/2001 Mon 25.8 28.1 23.8 25.9 25.7
04/09/2002 Tue 4.5 6.7 0.4 -0.1 -1.1
10/03/2002 Thu 32.2 28.2 27.0 35.5 32.5
04/24/2003 Thu 11.4 9.0 18.0 15.8 22.2
01/28/2004 Wed 4.6 4.0 -0.4 0.4 -0.8
07/13/2004 Tue -7.0 -5.4 -3.5 -1.9 -2.8
06/23/2005 Thu 5.3 4.3 7.4 8.2 7.8
10/21/2005 Fri 7.0 7.9 4.3 3.3 2.9
11/26/2007 Mon 12.0 11.2 8.5 8.8 3.4
01/11/2008 Fri -2.6 -0.4 3.7 4.2 1.1
09/29/2008 Mon -26.1 -22.3 -28.3 -30.3 -25.5
10/28/2009 Wed 0.5 2.0 1.2 2.0 2.5
01/21/2010 Thu 3.2 4.7 6.5 6.9 8.1
05/13/2010 Thu NaN NaN NaN NaN NaN
Avg 6.9 7.0 7.1 7.5 7.2
AvgPos 10.5 10.6 10.7 10.9 10.9
AvgNeg -8.5 -8.6 -11.4 -10.1 -8.9
PctPos 81.1 81.1 83.8 83.8 81.1
PctNeg 18.9 18.9 16.2 16.2 18.9
Maximum 32.2 28.2 27.0 35.5 32.5
Minimum -26.1 -22.3 -28.3 -30.3 -25.5
StdDev 11.2 10.9 11.6 12.1 11.9
ZStat 0.6 0.6 0.6 0.6 0.6
Variance 125.1 118.7 135.5 147.5 140.6
38 Occurrences
* * * Table 2 - Occurences on Thursday * * *
Let variable values:
@ = GII.FISV.NASDAQ
theEvent = IF
1 value percent_move of @ is less than
(30 day average of 1 value percent_move of @ -
(2 * 30 day std_dev of 1 value percent_move of @
)
)
AND
@ crosses below bollinger_low ( @, 20 units, 2 )
AND
Date is Thursday
THEN 1
ENDIF
Date Day t t+5 t+10 t+18 t+28
06/29/1989 Thu -3.3 1.1 3.4 11.4 9.1
11/05/1992 Thu -5.4 5.7 8.6 11.5 10.3
12/02/1993 Thu -8.2 3.8 1.3 3.2 5.1
03/07/1996 Thu -7.9 -4.0 -4.9 4.5 4.5
12/12/1996 Thu -5.6 5.1 5.1 6.4 5.9
12/18/1997 Thu -2.7 11.8 13.8 16.4 19.6
10/03/2002 Thu -13.4 10.9 32.6 24.8 25.4
04/24/2003 Thu -6.5 -0.1 -3.3 3.4 15.4
06/23/2005 Thu -2.1 1.8 5.4 6.8 7.4
01/21/2010 Thu -2.7 -2.7 -2.1 0.9 5.4
05/13/2010 Thu -5.0 NaN NaN NaN NaN
Avg -5.7 3.3 6.0 8.9 10.8
AvgPos NaN 5.8 10.0 8.9 10.8
AvgNeg -5.7 -2.3 -3.4 NaN NaN
PctPos 0.0 70.0 70.0 100.0 100.0
PctNeg 100.0 30.0 30.0 0.0 0.0
Maximum -2.1 11.8 32.6 24.8 25.4
Minimum -13.4 -4.0 -4.9 0.9 4.5
StdDev 3.3 5.3 10.9 7.3 7.1
ZStat -1.7 0.6 0.5 1.2 1.5
Variance 10.8 27.6 119.5 53.0 50.4
11 Occurrences | |
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