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’s going on in the stock market?
It has been dropping for 3 weeks with no end in sight. We haven’t seen such a continuous drop since April 2024.
Nimble traders are shorting the stock market and enjoying gains in this weak market.
If you’re looking for stocks to short, I have good news for you.
I’m looking at this stock for a shorting opportunity.
Let’s explore this shorting opportunity on Voya Financial.
Brief History of Voya Financial
Source: voya.com
Voya Financial was founded in 1999, just before the Dot Com crash.
As its name suggests, the company provides financial services for areas such as investment, insurance, and retirement.
After several restructuring, acquisitions, and joint partnerships, Voya Financial grew and expanded to offer more products and services, finally becoming the $6.5b company they are.
Business Model and Financials
Source: tradingview.com
Let’s look at 2 key metrics from the image above – total revenue (in blue) and net income (in purple).
Voya Financial’s total revenue was flat from 2018 to 2020. COVID-19 struck and its total revenue was reduced sharply.
Since the pandemic, its total revenue has been growing.
Has its net income grown alongside? Let’s find out.
Over the years, its net income has been inconsistent, rising for 1 year, and falling the next year. This suggests weakness in the company’s fundamentals.
But this is no reason to short its stock just yet. Its price chart will help us make a better-informed decision.
Technical Analysis on Voya Financial (NYSE: VOYA)
Voya Financial’s price chart is shown above.
Without the need for technical tools such as trendlines and support and resistance, you can tell whether the time to short its shares for a position trade is ripe.
How?
By focusing on the 2 main proprietary indicators which I’ll share more soon.
Let’s begin with identifying the trend of its share price.
You can do so by comparing the number of blue (solid and outlined) candles against the number of red (solid and outlined) candles. Here, the ratio is about 50-50, indicating that the shares of Voya Financial are ranging.
As the S&P 500 has been dropping lately, and this stock has been following suit, let’s look for a shorting opportunity.
It’s time to refer to the 2 main proprietary indicators to determine whether the time to short its shares is ripe.
The first indicator I’d like to bring up is the arrow.
Do you see a red arrow above the latest candle of Voya Financial’s shares?
When a red arrow appears, it suggests that the shares of Voya Financial are in a new bearish move.
Next, let’s look at the Trend Impulse Factor indicator. To be more exact, I’ll focus on the color of its bar.
When the bar of the Trend Impulse Factor indicator is dark green, it suggests that there’s momentum. This is important because you’ll want to the shares of Voya Financial to continue in its direction to make a profit.
Here, the color of the Trend Impulse Factor indicator’s bar is dark green.
What can you and I conclude?
The time to short its shares for a position trade is here!
Conclusion
Source: unsplash.com
As the S&P 500 continues to dump, many stocks will follow suit.
One such stock is Voya Financial.
However, shorting stocks without a deep analysis is highly risky.
I’ve performed an analysis of the company, discovering that its financials are pretty inconsistent. A glance at its price chart tells me that the bears are fully in charge.
This can be easily inferred from the red arrow and the color of its Trend Impulse Factor indicator.
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.
Therefore, you’ll want to consider shorting the shares of Voya Financial for a position trade.
What are your thoughts?
Share your thoughts with me below!
