Compiled by Alexander Crawford: It's often suggested that “volume precedes price”, and for that reason it's always helpful to look at the Money Flow Index (MFI), which is essentially a volume-weighted version of the popular Relative Strength indicator (RSI).
Here we present four stocks that have seen bullish MFI convergence over the last five days. These stocks have also seen an average of insider buying over the last two years.
MFI is a more rigid indicator because it is volume-weighted, and is therefore a good measure of the strength of money flowing in and out of a stock. It compares "positive money flow" to "negative money flow" to create an indicator that can be compared to price in order to identify the strength or weakness of a trend.
It can be very useful to compare changes in the MFI indicator to the changes in a stock's price, since diverging patterns are often interpreted as trend reversals.
That said, no indicator should be used in isolation--use this list as a starting point for your own analysis.
All of the stocks mentioned below have seen prices decline over the last week, but the MFI(14) indicator has shown strong improvement--suggesting that these stocks are being accumulated at current levels. Full details below.
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List sorted by change in MFI(14) index over the last five days.
1. AEP Industries Inc. (AEPI): Rubber & Plastics Industry. Market cap of $167.81M. Insiders bought an average of 19,856 shares over the last two years (0.32% of 6.14M shares outstanding). Latest close at $27.50 vs. a close at $29.15 five days ago (-5.66% change). MFI(14) index at 26.57 vs. MFI(14) index at 18.80 five days ago (41.33% change). It's been a rough couple of days for the stock, losing 6.47% over the last week.
2. Quidel Corp. (QDEL): Diagnostic Substances Industry. Market cap of $393.37M. Insiders bought an average of 96,974 shares over the last two years (0.29% of 33.14M shares outstanding). Latest close at $12.03 vs. a close at $12.39 five days ago (-2.91% change). MFI(14) index at 18.98 vs. MFI(14) index at 16.58 five days ago (14.48% change). The stock is a short squeeze candidate, with a short float at 17.98% (equivalent to 22.52 days of average volume). QDEL has lost 6.39% over the last week.
3. Pep Boys - Manny, Moe & Jack (PBY): Auto Parts Stores Industry. Market cap of $618.16M. Insiders bought an average of 31,392 shares over the last two years (0.06% of 52.52M shares outstanding). Latest close at $11.65 vs. a close at $12.55 five days ago (-7.17% change). MFI(14) index at 13.73 vs. MFI(14) index at 12.63 five days ago (8.71% change). It's been a rough couple of days for PBY, losing 6.59% over the last week.
4. Great Lakes Dredge & Dock Corporation (GLDD): Heavy Construction Industry. Market cap of $449.80M. Insiders bought an average of 14,148 shares over the last two years (0.02% of 58.72M shares outstanding). Latest close at $7.58 vs. a close at $8.15 five days ago (-6.99% change). MFI(14) index at 33.90 vs. MFI(14) index at 31.37 five days ago (8.07% change). After a solid performance over the last year, GLDD has pulled back during recent sessions. The stock is 5.26% below its SMA20 and 6.11% below its SMA50, but remains 15.58% above its SMA200. The stock has performed poorly over the last month, losing 12.95%.
MFI(14) values sourced from StrategyDesk, insider buying data sourced from Fidelity, all other data sourced from Finviz.