InsiderScore.comTM BUY / SELL RATIO
APPLICABLE TIME FRAME(S):
INTERMEDIATE
UPDATE SCHEDULE:
Every Tuesday
EXPLANATION:
Analysis of corporate insider activities takes a special kind of knowledge, and a lot of hard work.
Insiders sell company stock for any number of reasons, though they typically buy only because they believe their stock will rise. Sorting the wheat from the chaff in terms of thousands of transactions takes a lot of legwork, and we at sentimenTrader prefer to look to those with a particular kind of expertise for this analysis.
For that, we turn to Insider Score, a service that has created a proprietary scoring system for analyzing insider trades. They apply this scoring system to individual stocks and sectors, and ultimately to the market as a whole.
That "entire market" score is what we present here, and is meant to give a big-picture view of how insiders in general are feeling towards their companies' prospects.
GUIDELINES:
The interpretation of this data is very straightforward. When insiders are selling much more stock than they're buying (i.e. the blue indicator line on the chart goes outside of the red trading band), then we can assume that insiders aren't feeling particularly optimistic and more often than not it precedes weakness in equities.
Conversely, when insiders are busy buying stock and the "insider score" turns positive (particularly if the indicator line dips below the lower, green trading band), then we should be on the lookout for a market rally.
ADDITIONAL RESOURCES:
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