As our readers may be aware, we're big fans of a market indicator known as the Coppock Indicator or the Coppock Curve. Though the indicator was meant to be applied to the Dow Jones Industrial Average, we believe there is utility in applying this indicator to select individual companies. Our hope is that we can leverage the knowledge we garner from this tool and apply it to other stocks and indexes.
The Coppock Curve is intended to aid long-term investors when investment risk is considered to be lowest. What we've done is apply the same concept to individual companies when we believe they are most likely to be undervalued. This approach is the merging of fundamental values with a robust technical indicator. One key distinction that we've added is that we've set a 12-month target after the Coppock signal to determine performance and investment opportunities.
Below we have run the Coppock Curve of five companies, that are found on our recent watch lists, with the percentage change after the Coppock "buy" signal has be indicated. The results are shown below and the risk-reward for these 5 companies appear outstanding for the next 12 months.