DIY Investor Magazine
/
2015 Issue
29
As we can see from the chart in the first instance
(Correlation 1) between 23rd and 27th February the
sentiment score moved lower from +13 to -50 and the
share price drifted lower from $132 to $128. On 25th
February, news broke that Apple will have to pay $530
million for patent infringements.
News that Apple may face more lawsuits for patent
infringement hit the mainstream media on 27th
February dragging the stock lower.
In Correlation 2, between 9th and 11th March the
sentiment score moved down from +88 to -19 and the
share price dropped from $127 to $122. On 11th March,
news broke on mainstream media of the Apple Store
and iTunes experiencing outages of more than 8 hours.
However, it was a temporary phenomenon and the
price rebounded back to $127 on 17th March after
positive news on the Apple Watch, Apple TV and new
investments.
As seen from the above correlations, the sentiment
score can move ahead of the price, guiding an investor
or trader to predict the future share price movement.
This sentiment graph allows a layman to understand
how the share price can be affected by forming a
cluster of news of similar topics, analysing the overall
positive or negative sentiment for each cluster, thereby
allowing investors to keep an eye on all the relevant
news that could impact a share.
With so much news being generated every minute of
every day, investors require an automated system to
help them keep track of and understand the potential
impact on their investments.
This is where sentiment can help investors and become
a key indicator alongside technical, charting and
fundamental analysis.
Find out more at
However with there now being over
277,000 tweets, 571 websites created,
347 new blog posts and 72 hours of new
video being added to YouTube every
minute of every day, the volume of data
to read and filter is growing exponentially.
A value investor invests in a stock after
looking at a number of factors such as
the financials of the company, analysing
annual reports, news on the stock and
sector, reading the management outlook
and tracking the price movement.
