Beyond meat, to infinity and beyond!

Beyond Meat has managed to bounce back very quickly after falling to a stock price below 100 due to the COVID 19 scare in early 2020, they are now exceeding their pre covid 19 Levels making back all the COVID 19 losses and now tracking higher this has been a favourite for investors over the last few years. We’ll be looking at some technical details to try and better understand any underlying trends and what this might result in for the stock.

Bolinger Bands

The Bollinger bands are an additional indicator used in technical analysis to detect volatility if the bands are close together then there is considered to be low volatility however if the bands widen then there is considered to be high levels of volatility. Also it is very uncommon for a stock to move outside the Bollinger bands if it does, it will more often than not shift back inside the Bollinger band. In the graphic above we can see that the Bollinger Bands have widened recently and for now that suggests that the price is less stable and more volatile, again indicating that the price is likely to change rapidly and unexpectedly. It would also be important to identify the fact that Beyond Meat is currently sitting at the bottom of the Bollinger band range and it is likely that price will rise to head back into the middle range of the Bollinger band.

Balance of Power

The Balance of power indicator is very simple when the line is above 0 it indicates that buyers have dominance over sellers and when it is below 0 it indicates that sellers have dominance over buyers. The indicator moves between 1 at the very highest and -1 at the very lowest the indicator tracks how strongly price trades to extreme high and low levels. The Reading Beyond Meat has is .20 which indicates buyers are dominating the sellers in the market pointing to the conclusion that Beyond Meat shares may move higher.

Stochastic Indicator

The Stochastic is a momentum indicator that is used to detect over bought and over sold signals the stochastic oscillator is predicated on the assumption that closing prices should close near the same direction as the current trend. This indicator was developed in the 1950s and it is still widely used in trading today. The Stochastic has a range of 0 to 100 if the two lines in the graph are above 80 it is considered overbought and if it is under 20 it is considered oversold. The two lines in the graph are the K% and D% which is 3 period moving average of K% this means D% would always react slower than the K% this is helpful for investors because a movement in the K% also known as the fast Stochastic that crosses the D% is a bullish trading signal. This is not occurring in the above graph, however both lines are heading into the oversold area which may mean prices may increase.

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