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.
What do most Asian parents obsess on for their children?
Not play. Not food.
It’s education. Why?
Not too long ago, many in Asia were in the self-sufficient as they lived in towns and villages. Additionally, they weren’t able to pursue education due to deep poverty. As parents realized the importance of education in equipping the young with hard and soft skills, education has rocketed to the top of their priority.
Today, tuition and enrichment centers are prevalent; you can find one at almost every corner, and in almost every neighborhood shopping mall.
As education remains a top priority, is there a position trading opportunity that can be captured?
Brief History of New Oriental Education
Source: neworiental.org
Founded in 1993, New Oriental Education provides private educational services.
Initially, the company focused on preparing students for overseas university application exams. Its motivational teaching style broke away from the usual Asian teaching style, made New Oriental Education highly popular.
The company survived sweeping change of regulations by the Chinese government when for-profit tuition was banned in mid-2021.
What happened? New Oriental Education pivoted to live steaming and the provision of adult learning courses.
With its resilience, has its financials been growing?
Business Model and Financials
Let’s look at 2 key metrics from the image above – total revenue (in blue) and net income (in yellow).
Did you notice that the total revenue of New Oriental Education grew every year except in 2021? The sharp fall in 2021 was due to a ban of tuition services by the Chinese government.
However, this ban didn’t keep New Oriental Education down for long. Business picked up from 2022 and its total revenue has been climbing since.
Here’s another important fundamental metric to look at – net income.
Post 2021, New Oriental Education’s net income has been growing every year, from $176.6m to $372.4m. That’s more than a 2x growth in just a couple of years!
Are these strong enough reasons to consider buying the shares of New Oriental Education for a position trade?
Let’s have a look at its stock chart to provide more clarity.
Technical Analysis on New Oriental Education (NYSE: EDU)
Here’s the chart of New Oriental Education’s shares.
Can you tell that its shares are in a steady uptrend?
There’s no need to add a moving average or trendline. You can tell that this is an uptrend by comparing the number of blue (outline and solid) candles against those in red (outline and solid).
The share price is in an uptrend when there are more blue candles.
What would I want to do when a stock is in an uptrend?
I’ll want to look out for buying opportunities. And that’s what I’ll be doing here.
Without the need to plot support and resistance, I can tell whether the time to buy the shares of New Oriental Education is ripe for a position trade.
How?
By looking at the 2 main proprietary indicators – the arrow and Trend Impulse Factor indicator.
Do you see a green arrow under the latest candle of New Oriental Education’s shares?
This tells me that this is a fresh bullish move. But is this bullish move likely to be sustained?
Enter the Trend Impulse Factor indicator.
When the bar of the Trend Impulse Factor indicator is dark green in color, it suggests that this bullish move is likely to be sustained. Now, let’s have a look at the color of the Trend Impulse Factor indicator’s bar.
The shares of New Oriental Education look ripe for a position trade!
Conclusion
Source: unsplash.com
As education remains a top priority for parents, the education sector should continue to flourish.
With the changing landscape of the economy, many adults are also keeping themselves up-to-date by attending courses, particularly on technology, to stay employable.
Using the scanner that comes with the TradersGPS (TGPS) system, this gem, New Oriental Education, was uncovered.
New Oriental Education is positioned at the sweet spot, providing tuition and adult learning services. It is growing financially and the market is optimistic on its stock.
Both the arrow and Trend Impulse Factor indicators 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.
Relying on the green arrow and the color of its Trend Impulse Factor indicator, I can tell that its shares are ripe for a position trade.
What are your thoughts?
Share your thoughts with me below!
