Lucky Sort’s Topic Watch Data Analysis on Priceline Anticipates Price

Last Friday, Lucky Sort posted an analysis of StockTwits data on their blog.

They’ve recently begun crunching StockTwits data and as you can see, they are doing some compelling work.

Here’s the full post:

TopicWatch Analysis of StockTwits Data Foreshadows Crash in Priceline ($PCLN)

On August 7, 2012, Priceline (NASDAQ:PCLN) announced during their Q2 earnings call that they had overestimated revenue growth for the quarter and that third quarter growth estimates would additionally be lowered. Priceline stock plummeted the following day, resulting in a one-day loss of $117/share, 17% of the share value.

Many investors were caught off guard (see below) by this rapid decline in PCLN. However, there was also a segment of the financial community that had been voicing concerns leading up earnings call. Using TopicWatch, it was possible to detect a sentiment change in the discussion on StockTwits during the weeks leading up to the Q2 earnings. StockTwits is a social network where traders and investors discuss financial markets.

The trend of investor sentiment can be measured in TopicWatch. In this screenshot, we are looking at the “Danger (Stock)” index filtered to show messages related to PCLN, compared with the stock price. An index in TopicWatch is a collection of weighted terms, designed to measure sentiment and frequency of discussions related to real-world events. A filter restricts the results of a query so all messages analyzed must include the filtered term. By combining the danger index with the Priceline filter we can see investor concern peak immediately prior the q2 earnings call.

The rise in investor concern surrounding priceline can also be seen using TopicWatch’s default bullish and bearish indices. Lucky Sort has created public indices for monitoring different sentiments, events, and other topics of interest. By subtracting the bearish index from the bullish index we produce a sentiment spread. For a comparable analysis, we have also restricted these messages to only those mentions of Priceline using the same filtering technique as before. A bullish/bearish sentiment spread for priceline shows a dramatic shift toward bearishness prior to the Q2 earnings release.

The indices used in this analysis, as well as a variety of other indices, are available for all TopicWatch users. Indices can be quickly used to perform analysis across a wider range of including StockTwits. Lucky Sort is a licensed provider of StockTwits analytics providing users full access to entire StockTwits dataset both historically and ongoing in realtime.

Look for upcoming blog posts on alerts, templates, and other Lucky Sort tools.

Sign up for a test account of TopicWatch here.

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