FIGURE 2. Microsoft’s Nasdaq Listing 2018- Present


firming a strong company balance sheet can all help shift the dialogue with investors. Exposing negative trends is not a bug; it’s a feature of trend-following. Figure 2 reveals two significant periods of negative


trending activity (in red) during the past five years for Microsoft stock. Tese were warning signs to corporate stakeholders and entry opportunities for short-sellers. (Source: TradingView, Trend-Intelligence)


How IR Professionals Can Use Trend Intelligence’s Analytics IR professionals can use trend-following analytics and knowledge to their advantage in several ways: • Cultivating an equity story: Build a tighter equity storyline based on the quantitative analytics of price, in addition to company fundamental narratives.


Trend-following indicators can be substantial inputs into com-


plex investor algorithms. By understanding price trends, you can better understand what your quantitative and passive investors will likely do next with your company stock. Uniquely, trend-following does not incorporate any interpre-


tation of news or fundamental information. It’s well known that company and economic news do not reliably predict stock prices, and that stock prices frequently move counterintuitively to new information (Figure 1). Te advantage of using trend-following is that, as these well-established models rely only on statistics derived from price the price of a security, they cannot mislead the user. Instead, trend-following models create an unbiased predictability of price expectations that cannot be ignored. When used properly, trend-following can counter an IR professional’s intuition about how a story will be interpreted by the market. For IR professionals, access to trend-following analytics can be


a significant and differentiating advantage. Expectations about the future stock price of a company are made clearer. If a company’s price can be shown to be trending positively despite bad news, IR professionals can now communicate with existing and future stockholders with confidence and build new company storylines around this positive price trend. But what if a company is mired in a negative price trend?


Trend Intelligence encourages IR professionals to embrace the unfortunate statistical truth and work to reverse the ongoing trend by communicating more with investors that matter.


News and Trend-Following Signals New information, new storylines, new product releases, and reaf-


ni ri .org/ irupdate


• Quantitative investor analysis: Build an understanding of the general trend signals of quantitative investors and what they may do next with your stock.


• Peer analysis: Understand statistical trends in peer stock prices, and where they are trending compared to your company.


• Index and ETF analysis: Understand the statistical trends in major indices and exchange-traded funds (ETFs) that include your company. Build an understanding of where those prices are trending to, and how moves in those instruments will impact your company’s stock price.


• Commodities and FX trends: Stay ahead of statistical trends in commodities and currencies that impact your business.


• Mutual fund analysis: Understand the trends behind the net asset value of your largest investors.


• Stock buyback timing: Empower treasury teams to buy back stock when prices are attractive.


• Short-selling signals: Spot short-selling signals on your company stocks, anticipating new short interest and start working with your long-only investor base to turn the tide.


• Analyst targets: Understand if your stock price is trending toward or away from key sell-side analyst targets.


• Board reporting: Trend-following analysis can provide invaluable insight to corporate boards every quarter on statistical price behavior and can often contradict qualitative narratives from other investors.


Adrian Dacruz is CEO and Founder of London-based Trend Intelligence, the only dedicated trend-following analytics provider for IR professionals. adrian@trend-intelligence.com.


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