Intercontinental Exchange, Inc. (NYSE:ICE) stock flux has recently been causing stir among the investment community. It is widely believed that a stock’s future performance can best be predicted by analyzing prior trends and patterns in price. In the case of ICE, the chart has some interesting things to say about where the stock might be headed in the future.
How has the stock performed recently?
Intercontinental Exchange, Inc. (NYSE:ICE) has been trading in a bullish manner, based on the relative positions of the stock’s 20 and 200 day moving averages. In the last month, the price of ICE has decreased -8.26%. Shares are now up over the past year, outperforming the broad market by -100% and underperformed a peer group of similar companies by -44%. After the latest session, which saw the stock close at a price of $68.60, ICE sits below its 52-week high.
Of course, these surface-level price movements don’t tell us much about the direction that ICE may be headed in the future. In order to predict this, technical analysts look at momentum indicators, which measure the speed and magnitude of these price movements. The idea is that as momentum slows, it may signal the approach of key support or resistance levels and a reversal of recent trends. Two such indicators are the RSI (Relative Strength Index) and the Stochastic %k Oscillator, which fluctuate on a scale of 0 to 100. A reading above 70 indicates that a stock is overvalued, and a reading below 30 implies that it is undervalued. The 20-day RSI for ICE is 39.12%, which suggests that the stock is not particularly expensive or cheap, and not predisposed to a reactive price movement based on this measure. The 20-day Stochastic %k measure, which sits at 11.71%, tells a different story, and suggests that ICE currently trades in oversold territory.
What do the trading volumes reveal?
In addition to price, analysts use volume trends to predict future performance. The level of trading activity in a stock is often a good proxy for the level of interest and enthusiasm for the name within the investment community. A sudden increase in activity can be a sign that investors are trading in anticipation of a catalyst. Intercontinental Exchange, Inc. (ICE) average trading volume of 3,059,410 during the past month is 15.14% above its average volume over the past year, indicating that investors have been more active than usual in the stock in recent times.
What do the analysts think?
ICE is currently undervalued by -15.16% relative to the average 1-year price target of $80.86 taken from a group of Wall Street Analysts. The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.00, which implies that analysts are generally neutral in their outlook for ICE over the next year.
How risky is the stock?
In order to put ICE’s recent price performance into context, we need to get a sense of how the stock moves in relation to the overall market. Beta, which measures a stock’s price volatility relative to the market, provides the cleanest measure of systematic risk for a stock.
Intercontinental Exchange, Inc. (NYSE:ICE) has a beta of 0.74, compared to a beta of 1 for the market, which implies that the stock’s price movements are less extreme than the market as a whole. ICE therefore has an below average level of market risk. During the past couple of weeks, ICE average daily volatility was 30.34%, which is -10.07 percentage points higher than the average volatility over the past 100 days.