For the month ending January 29, 2010 Wynn (WYNN) saw its sentiment grow by 25 pts from 12.5 to 37.50 – representing a 3x growth rate. A sentiment rating of 37.5 indicates a buy and this kind of sentiment growth implies a lot of positive energy and momentum in the stock. There have also been some positive analyst upgrades including the one from UBS earlier this week.
Change in sentiment provides a timing mechanism to understand underlying changes in a security potentially ahead of a price move. For example, a large increase in sentiment should be seen as positive even if the underlying stock has a low absolute sentiment, while a large decrease in sentiment should be seen as negative even if the underlying security has a high absolute sentiment.
For this analysis, we will use sentiment generated by the web application, Piqqem. Piqqem captures, processes, and displays sentiment results by allowing its users to vote on the price direction of a stock and then applies its own propriety factors to calculate sentiment for a security. In their model, a scale of -100 to 100 is used with -100 representing the lowest level of sentiment and 100 representing the highest level of sentiment.
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