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Long-Term Price Movement
Once you have looked at the short-term price movement of the stock, you will also want to look at the long-term price movement.
Importance of long-term price movement
Many investors worry that positive short-term price movement is just an unsustainable flash in the pan if the long-term price movement isn’t also rising. Seeing an increasing long-term price movement is extremely encouraging because it shows continued buying interest in a stock, and that the stock has been able to support the buying pressure. Investors like investing in the tried and true.
Scoring long-term price movement
- Pass—Give this factor a passing score if the stock price is higher today than it was one year ago.
- Fail—Give this factor a failing score if the stock price is lower today than it was one year ago.
Looking at the long-term price movement for GOOG in Figure 5, you would give it a passing score because the price is higher today ($495.90) than it was one year ago ($403.45).
Long-Term Price Movement: PASS
Figure 5—Long-Term Price Movement
Now that you have scored the second and third factors, you can move on to score the next two factors of the NASDAQ Dozen by going to the drop-down menu in the upper-left corner and selecting Revenue/EPS Summary (see Figure 6).
Figure 6—Revenue/EPS Summary Link
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