Monday, November 22, 2010

Trade Triangle: Frontier Communications (FTR)

A few months ago, I wrote a post about how Verizon Communications (NYSE: VZ) shareholders received shares in Frontier Communications (NYSE: FTR) as the result of a spinoff from Verizon. My post described how to calculate the cost basis of an investment after a spin-off for tax purposes. Having been "given" this stock from Verizon, I wanted to do an analysis of whether I should continue to hold onto the FTR stock that I now have. I use a website called (pronounced "I know") to do this analysis.

A portion of that website called MarketClub uses something called Trade Triangle analysis, which is a technical analysis tool. I used it to analyze the recent price movements of Frontier Communications (NYSE: FTR). The results of the trade triangle analysis are shown below.

This analysis shows that Frontier is now in a strong uptrend, and that this is an ideal time to buy or hold the stock. MarketClub's Smart Scan analysis calls this situation a "Trade Triangle" with a +100 being the highest possible score. This kind of technical analysis is great for trend traders who like the "red-light, green-light" simplicity of investing. So, based on this information I concluded that I should hold onto my shares of FTR for the time being. It is a fact that Frontier Communications has been in a general uptrend since I received the spinoff shares from Verizon (VZ).

Note that Trade Triangles are strictly a technical analysis tool. I don't use the MarketClub analysis to tell me what to buy. I rely more on fundamental characteristics like Earnings Per Share (EPS) and PE ratios to decide on which stock to buy. But, I use MarketClub to tell me when to buy.

Another comment that I have is that MarketClub does not require you to download and install any software. This is good because you can access your subscription from pretty much any computer. The downside is that your access speed will be limited by your Internet connection. In other words, MarketClub is not the fastest analysis tool that I've ever seen. But, it is pretty good considering that the software runs on their servers and not your computer.

You can subscribe to MarketClub for $150 per quarter or $449 for a year. You will have complete access to many of the investment tools available on There is a 30-day risk-free trial period in which you can try them out. They will ask for a credit card when you sign up, but you have the right to cancel within the first 30 days and get all of your money back. So, what do you have to lose?

Another free tool that I utilize to help me keep on top of my portfolio is called Trend Analysis. Trend Analysis is a daily email analysis tool that gives me insight into exactly what my portfolio is doing. For investors who are following many stock symbols, MarketClub sends a daily Email for every symbol in your portfolio.

The links above takes you to a screen where you can get your first stock (future or option) symbol analyzed at no cost to you. After you sign up, you can easily add more symbols to get a daily update, which I find very helpful.


Disclaimer: This material is for general information only. It is not intended as an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any security or fund.

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