Lending Club Stock Performance
My name is Roco, I am a RoboTrader; I am a trained technical trader. I make decisions base on charts, not emotions. I follow a set of rules when it comes to trading, I believe that market has trends, and it is not random.
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In reaction to the resignation of the CEO of Lending Club, according to Wall Street Journal, "two Wall Street investment banks (Goldman and Jefferies) handling bond sales for LendingClub Corp. have stopped buying the company’s loans after the ouster of CEO Renaud Laplanche, people familiar with the matter said."
In the next few months or so, the company, as well as the P2P industry in the US will face more skeptics and headwinds.
By studying the price chart of Lending Club, which traded as low as $3.98, the volume indicated that it can be near its long term bottom.
Why?
It is possible that the stock price already reflected most of the bad news and negative sentiments that casted over the last year or so ever since its IPO debut. The stock traded as high as near $27, it has fallen 85%.
If you believe in its business model like I do, it might worth watching. The company's revenue grew over 200% year over year consistently, it has over $583 mil in cash (according to Lending Club's 10Q report for 3/31/2016, http://ir.lendingclub.com/doc.aspx?IID=4213397&DID=36518398
Before the stock can recover, it will go through a period of bottom forming, in which we will see a lots of buying and selling within a trading range, perhaps between $3.5 -6.5.
If and when these negative sentiment reverses, we can see the stock goes back up to $10 per share. In helping to monitor these possible outcomes, we are going to monitor the stock with our proprietary indicator, BBI - the Bull Bear Index.
When the Index is below zero, stock is bearish, when it is above zero, it is bullish. The moving averages (read and black line) cross over can be use as change of sentiment. When cross upward, it becomes less bearish (or turned bullish), and vice versa.
Overall, stock is in a consistent downtrend. At the current stage, the stock is bearish, we can monitor how the averages will cross upward in the near future to detect possible change of sentiment.
Stay tuned!
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