Algorithmic Analysis

I Know First supplies financial services, mainly through stock forecasts via their predictive algorithm. The algorithm incorporates a 15-year database, and utilizes it to predict the flow of money across 2000 markets. The self-learning algorithm uses artificial intelligence, predictive models based on artificial neural networks, and genetic algorithms to predict money movements within various markets.

The algorithm produces a forecast with a signal and a predictability indicator. The signal is the number in the middle of the box. The predictability is the number at the bottom of the box. At the top, a specific asset is identified. This format is consistent across all predictions. The middle number is indicative of strength and direction, not a price target. The bottom number, the predictability, signifies a confidence level.

I Know First has had success in predicting LinkedIn stock prices in the past. Back in May, I Know First released a bullish article concerning LNKD stock. Since then, LinkedIn share prices has increased by 3.5%.

More recently, I Know First published a bullish article on LinkedIn, the world’s biggest social network for professionals, on Seeking Alpha. Noting I Know First’s success in the past, it is worthwhile to see if the algorithm agrees with the bullish fundamental analysis of the company. The three month and one year forecast is included below.

(Figure 1: LNKD Forecast June 30th ’15)

The above forecast is the most-recent forecast from June 30^th 2015 and is for  both the 3 month period and the more long-term period of one year. Both forecasts demonstrate that LNKD is amongst our most bullish tech stocks, with strong signal strengths of 76.88 and 112.78 respectively and predictability ratings of 0.27 and 0.34 respectively. The algorithm correlates with the fundamental analysis where the general consensus is that via their rapidly expanding market base and continuously increasing revenue LNKD stocks are bound to rise in the long term. Linked In’s current low stock price presents investors with a fantastic opportunity – an opportunity which has tremendous upside potential and very little scope for any downside stock movement

Positive signal strength does not mean investors should automatically buy the stock. Dr. Roitman, who created the algorithm, created rules for entry for a stock such as Gilead Sciences. Using this trading strategy, an investor should buy a stock if the last 5 signal strength’s average is positive and if the last closing price is above the 5-day moving average price. When both of these conditions are met, it is a good time to initiate a position in the stock.