What’s Next For Terex Stock After An 11% Fall In 5 Days?
The stock price of Terex, an aerial work platforms and materials processing machinery manufacturer, has seen an 11% drop over the last five trading days. While there was no company-specific announcement, the industrial stocks at large saw a sell-off last week, with Caterpillar, AGCO, and Deere also down over 5% over the same period.
Now that Terex stock has fallen 11% in just five days, will it resume its downward trajectory over the coming weeks, or is a rise in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price data, returns for Terex stock average nearly 6% in the next one-month (21 trading days) period after experiencing a 11% drop over the previous week (5 trading days). Also, given high vaccination rates is several countries, the demand for industrial equipment is expected to see a sharp rebound, boding well for TEX stock.
Some Fun Scenarios, FAQs & Making Sense of Terex Stock Movements:
Question 1: Is the average return for Terex stock higher after a drop?
Answer: Consider two situations,
Case 1: Terex stock drops by -5% or more in a week
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Case 2: Terex stock rises by 5% or more in a week
Is the average return for Terex stock higher over the subsequent month after Case 1 or Case 2?
TEX stock fares better after Case 2, with an average return of 1.8% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2% for Case 2.
Try the Trefis machine learning engine above to see for yourself how Terex stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
Answer: If you buy and hold Terex stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!
For TEX stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:
You can try the engine to see what this table looks like for Terex after a larger loss over the last week, month, or quarter.
Question 3: What about the average return after a rise if you wait for a while?
Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.
It’s pretty powerful to test the trend for yourself for Terex stock by changing the inputs in the charts above.
While TEX stock may see higher levels, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is forTechne vs Generac HoldingsGNRC .