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|Parameter||Stocks rated Sell and Str.Sell (SSS) at start of the period||Stocks rated Buy and Str.Buy (BSB) at start of the period||Difference
BSB - SSS
|Number of Stocks||136||26|
Stock prices do not always move towards stock intrinsic values. Though over a long period of time and for a large sample group they definitely do - the performance of stocks in our different rating categories attest to that (see the table in the top left corner of this page).
While analyzing this phenomenon, we noticed that instances of the divergence could be used to predict price movements of the stock market: market prices of stocks and their intrinsic values will converge.
We used this premise to built an absolutely unprecedented stock market indicator - we call it Validation index. If it moves in the same direction as the stock market, then the market price movement is validated. If the two move in the opposite directions, then the price movement of the stock market is not confirmed and, therefore, a movement in the opposite direction could be expected.