Equity Clock

Adobe Systems Incorporated (Public, NASDAQ:ADBE) – Clock That Stock

Clock_That_Stock

The Stock

Adobe Systems Incorporated (Public, NASDAQ:ADBE) was upgraded today by an analyst at Brigantine Advisors from a rating of Hold to Buy, placing a target on the stock of $42. As a result the stock has rallied over 2% by midday, currently sitting close to $36 a share. This stock was highlighted as a potential “buy” in a report published by EquityClock.com back on February 11 when the price was $32.77. Since then the stock has rallied to the tune of 9% over the month. The stock continues to have favorable analyst ratings and institutions have been seen accumulating the stock on net. Fundamental valuation is in the range of $42 to $45, good for another 17% plus return, and the seasonal prospects confirm this range.

Market sentiment looking at current month options volumes is an overly bullish 0.07 puts compared to calls (put/call ratio). Technically the stock may be close to topping out in the short-term with technical indicators showing signs of rolling over following the one month rally. The stock has broken out of its expected trading range today of 32.10 to 35.22 on the upgrade news.

Chart Courtesy of StockCharts.com

The Clock

Seasonal prospects between now and the beginning of May are very strong for this stock, seeing gains of over 17% over this time range. This expected appreciation exactly corresponds to the price target suggested by the analyst at Brigantine of $42, or 17% above current levels. The seasonal rally of this stock over the next couple of months corresponds to the time following the release of first quarter earnings, this year on on March 22nd, in which improved earnings and guidance are expected.

Adobe Systems Inc (ADBE) 35.02

-0.47 (-1.32%)

Seasonality Analysis

Analysis has revealed that with a buy date of August 5 and a sell date of June 4, investors have benefited from a total return of 870.86% over the last 10 years. This scenario has shown positive results in 7 of those periods.

Conversely, the best return over the maximum number of positive periods reveals a buy date of February 1 and a sell date of April 29, producing a total return over the same 10-year range of 482.19% with positive results in 9 of those periods.

The buy and hold return for the past 10 years was 120.37%.

Technical Analysis

Support 2

Support 1

Pivot Point

Resistance1

Resistance2

The Numbers

34.46

34.74

35.21

35.49

35.96

Most Recent Close:

35.02

Support/Resistance Analys

Broke Upr Support (1)

52-Week High:

38.20

MACD Analysis:

Positive/Decreasing

52-Week Low:

18.16

MACD vs. Signal:

Above/Thinning

Fib. Retracement:

~ 78.6%

RSI Analysis:

Above 50

50-Day MA:

34.47

Stochastic (Fast) Analysis:

Bearish Crossover

200-Day MA:

33.31

50 vs 200-Day MA Analysis:

50-day Above 200-Day MA

High Critical Level:

35.22

Year over Year Trend:

Strongly Gaining

Low Critical Value:

32.10

Critical Level Analysis:

Within Critical Levels

Average Monthly Gain:

6.8%

MFI Analysis

Above 50 Declining

Technical Rating:

Candlestick Analysis

Neutral/Indecision

On a scale of 1 to 10, the higher the rating, the more appealing the investment is to buy at current levels.

Situational Analysis

Past Year

Advancing Sessions %

Return %

10-Year Average

Advancing Sessions %

Return %

Mar 16 thru Apr 15

52.4

28.1

Mar 16 thru Apr 15

52.1

11.7

Best Return: 34.8% – Sell Apr 9

Best Return: 18.4% – Sell Apr 3

Mar 16 thru Jun 14

58.1

63.4

Mar 16 thru Jun 14

51.6

16.4

Best Return: 64.8% – Sell Jun 11

Best Return: 30.6% – Sell May 13

Mar 16 thru Sep 12

58.4

87.8

Mar 16 thru Sep 12

16.3

Best Return: 87.8% – Sell Sep 11

Best Return: 35.7% – Sell Jun 28

Following Earnings Releases – Last 12 Periods

During Equivalent Periods of Economic Recovery where Unemployment has Peaked

12-Period Average

Advancing Sessions %

Return %

2-Period Average

Advancing Sessions %

Return %

30 Days After

48.9

0.6

90 Days After

46.4

2.4

Best Return: 7.7% – After 14 Days on Average

Best Return: 14.6% – After 65 Days on Average

60 Days After

50.1

1.1

180 Days After

46.6

12.9

Best Return: 12.2% – After 33 Days on Average

Best Return: 25.2% – After 110 Days on Average

90 Days After

51.4

1.9

360 Days After

47.5

20.4

Best Return: 15% – After 51 Days on Average

Best Return: 67.1% – After 282 Days on Average

Further Analysis

Sector:

Technology

Industry:

Application Software

According to Thackray’s 2010 Investors Guide, the period of seasonal strength for the Technology Sector ranges from October 9th through to January 17th. The seasonality ends around the time of the Consumer Electronics Show at the beginning of January and before earnings are finished being reported for the previous quarter in which holiday sales contributes significantly to the bottom line.

Current Consensus Recommend:

Outperform

Recommendation 1-Month Ago:

Outperform

Recommendation 3-Months Ago:

Outperform

Disclaimer

Analysis, comments, calculations, and opinions offered in this report, available via EquityClock.com, are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.