This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.
“Eric, did you get any travel insurance?” my wife asked at the airport.
I’m not a fan of travel insurance, but as all the peace-loving husbands know, listen to your wife.
During our trip, one of our flights got canceled and our travel insurance came in handy.
The stock in focus, Allstate, is in the insurance industry.
A common belief about insurance companies – they are almost guaranteed to enjoy a bright future.
Let’s find out if this is true for Allstate and what action you can take for its stock.
Brief History of Allstate
Allstate started in 1931, offering auto insurance.
In just 10 years, revenue skyrocketed to $6.8m! The company continued to look for avenues for growth, and began offering personal liability, commercial fire, personal theft, and other types of insurance across US and Canada.
Through constant innovations and a couple of acquisitions, Allstate has transformed into a $27b behemoth.
Is its financially healthy?
Let’s discover this in the next section.
Business Model and Financials
What can you tell about the financial health of Allstate from the bar chart above?
Did you notice that its total revenue (depicted by the blue bars) has been growing overall, over the years? That’s a healthy sign.
Let’s also take a look at its net income (depicted by the orange bars).
Allstate’s net income has been inconsistent over the years. This is a worrying sign.
Insurance companies, including Allstate, make money through premiums, and they are usually recurring on an annual basis.
Because of this, I think that Allstate’s financial health isn’t as rosy as it should be.
What does the market think of Allstate?
Is there an action you can take with its shares?
Technical Analysis on Allstate (NYSE: ALL)
The market doesn’t think highly of Allstate’s future. This can be inferred from its sliding share price.
If reading the trend proves to be challenging, you can simply read it by comparing the red and blue (solid and outlined) candlesticks.
When the dominant candlesticks (solid and outlined) are red in color like in this case, the stock is in a downtrend.
You’ll want to pay attention to 2 of the indicators on the chart as they provide you with the potential direction the stock is likely to head to.
The 1st indicator is the arrow.
Do you see a red arrow at the top of the last candle?
That red arrow signals a new downtrend is here, and as trend followers, you should be looking for opportunities to short this stock.
However, is it time to short the shares of Allstate?
That brings us to the 2nd indicator that you must look at – the Trend Impulse Factor indicator.
A dark green bar of its Trend Impulse indicator suggests that this bearish momentum is highly likely to persist in the near future.
When coupled with the presence of the red arrow, your odds of success are high if you short the shares of Allstate.
These 2 indicators eliminate the need to plot any technical tools such as support and resistance, and form the TradersGPS (TGPS) system.
Allstate looks strong and healthy based on its growing total revenue.
A look into its net income reveals cracks that the market is wary of.
Hence, its share price hasn’t been performing lately.
A look at the 2 main indicators on the chart tells you that a position trade is ripe.
Both the arrow and Trend Impulse Factor indicator have been tested and proven. They form the TradersGPS (TGPS) system to help you decipher if a stock is ripe for a position trade. You won’t have to feel in the dark and make wild guesses.
If you’re struggling to make money from the market, just do this ONE thing in 2023:
If you’re like most people, you probably think that building a profitable side income stream from the stock market is something that is extremely difficult to achieve, and time-consuming as well.
And you probably know that one friend or relative who has lost a lot of hard-earned money to the market despite being ‘experienced’.
And especially since 2022 was a time when we saw many people in the red, bag-holding 20-80% losses…
It’s understandable to see why most people have such a grudge towards the idea of profiting from the market.
But what if I told you that amongst the many skills required to be profitable in trading…
There is one simple skill that will never make you feel that making money in the stock market is difficult ever again?
A skill that, if mastered, can dramatically increase your chances of success in the stock market.
I’m talking about the skill of identifying the right strong stocks.
If you have heard of this before but still do not have it figured out yet, let today be the day you get it right.
You see, the #1 problem with most ‘experienced’ traders who just can’t seem to make money consistently from the market despite having consumed tons of learning resources & materials is not because there is a problem with their strategies.
It’s because unbeknownst to them, they are constantly buying the WRONG stocks.
Stocks that have very bad set-ups, price movement, andin general just a low probability of moving in the direction you wish for.
In fact, this process of picking the right stocks is a crucial step that most people don’t even think about.
Ask yourself this, what is your current process for knowing what stocks to buy?
Companies that you like such as TSLA, META, AAPL etc..?
Stocks that your friends tell you to buy?
Stocks that you read about in financial news, blogs or Youtube videos?
Or even stocks that you spend hours reading up their financial reports and doing fundamental analysis?
If you have done any one of the above, you are making a dangerous mistake and that has to change.
Knowing how to pick strong stocks with the highest profit potential using a proper proven strategy is half the battle won.
It instantly eliminates any potential ‘bad characteristics’ of the stock and significantly increases your chances of being right in the trade.
Once you know how to pick strong, potential stocks, whatever comes after (knowing when to buy or sell) becomes a breeze and you can start expecting to see real, consistent results.
That’s how exactly I was able to still execute 20-40% and higher trades last year when the entire market was down.
So if you think profitable trading is difficult, think again.
I’ve trained thousands of students who started off with complete 0 experience and whose portfolio results are now lightyears ahead of their peers who started learning years before them.
That’s the power of mastering this very simple skill of identifying the right strong stocks.
It literally gives you the weapon to be able to profit in all sorts of market conditions, because opportunities are ALWAYS in the market. It’s all about knowing how to find them!
I hope you’ve learnt this very important lesson today, but more importantly, take action in pursuing the mastery of this skill.
I have an upcoming free LIVE training demonstrating my exact process on how I find strong stocks in less than 15 minutes using a very simple strategy.
What I will be revealing is a tested and proven counter-intuitive approach that you’ve probably never seen before, and it’s something you can apply almost immediately.
So if you’re excited to cut through the B.S and master the intricate skill of profitable trading…
P.S You can also get to ask me any stocks you are currently thinking of buying and I’ll show you if it’s a strong stock and whether the odds are stacked in your favour or not!