Shares of Jack in the Box Inc., (NASDAQ: JACK) exhibits a change of -1.21% to $101.33 on Wednesday. Trading volume, or volume, is the number of shares or contracts that point towards the overall activity of a security or market for a given period. The company exchanged hands with 1,392,959 shares compared to its average daily volume of 518.70K shares. Trading volume is a key technical indicator an investor uses to identify momentum in a stock and confirm a trend or trend reversal. The volume gives an investor an idea of the price action of a security and whether he should buy or sell the security.
Trading volume can also indicate when an investor should take profits and sell a security because of low activity. If there is no relationship between the trading volume and the price of a security, this may be the warning sign of weakness in the current trend and a possible reversal.
Historical Performances under Review:
Over the last 5 days, Jack in the Box Inc.’s shares returned -2.56% and in the past one month the figure appeared at -0.12%. Furthermore, over the last three months, the stock was able to yield 5.33%. However, -2.69% is noted as its sixth month or half-yearly performance.
Traders seeking a better understanding of the stock can look at the underlying technical data. The stock is trading at a price to book ratio of N/A for the most recent quarter. The company has 29.26M shares outstanding with 1.00% insider ownership. The stock has weekly volatility of 2.24% and monthly volatility of 2.37% with ATR of 2.56 and beta of 0.53. The stock is trading away to its 50-day and 200-day moving averages by 0.65% and 1.27%, respectively. The price target set for the stock is $111.27 and this sets up an interesting set of potential movement for the stock.
Moreover RSI for the stock is currently standing at 48.23. Developed J. Welles Wilder, the Relative Strength Index (RSI) is a momentum oscillator that gauges the speed and change of price movements. RSI oscillates between zero and 100. Traditionally, and according to Wilder, RSI is considered overbought when above 70 and oversold when below 30. Signals can also be generated by looking for divergences, failure swings and centerline crossovers. RSI can also be used to identify the general trend. Finally, analysts have given a mean recommendation of 2.10 on this stock (A rating of less than 2 means buy, “hold” within the 3 range, “sell” within the 4 range, and “strong sell” within the 5 range).
Price to Earnings Ratio (P/E):
PE ratio is one of the most widely used tools for stock selection. It is calculated by dividing the current market price of the stock by its earnings per share (EPS). The current market price is already described above i.e., $101.33. The current EPS for the company has been recorded at $4.46. By applying the formula, the price-earnings (P/E) ratio comes out to be 22.72. Understanding PE gives the shareholders an idea if the stock has sufficient growth potential. Stocks with low PE can be considered good bargains as their growth potential is still unknown to the market.
If the PE is high, it warns of an over-priced stock. It means the stock’s price is much higher than its actual growth potential. So these stocks are more likely to crash drastically. This was evident in the recent market crash when the stocks of all Reliance companies fell sharply. This will allow savvy shareholders to sell their holdings before the stock price crashes.