On August 28th, Jackson Financial was added to a major Index, causing the stock to rise.
On August 28th, Jackson Financial was added to the S&P 600 Small Cap Index. Two weeks later, the stock was up 18 percent. Why?
The S&P 600 Small Cap Index is a basket of 600 smaller companies that are traded as one unit via an ETF. The addition to this index is a bullish event. Companies are added because they have grown to a certain size where they now meet the criteria of the index. This requires market cap and revenue growth, both positives for stocks.
In some cases, companies may have a shrinking market cap (the number of shares times the share price) and may fall from an index with a higher market cap, like the S&P 500, which is composed of large cap companies.
In this case, the addition to the index was welcomed by investors and the event often garners media and analyst attention for the stock. The attention often causes buying and the shares rise. Likewise, ETFs are forced to buy shares of the stock if they are modeling the ETF around the S&P index. This also drives the price up.
When a company is added to this index, LevelFields AI locates the announcement by the company that operates the index and alerts users, enabling recipients of the alert to profit by buying into the company before the majority of the market hears about it.
The user is also shown analytics of how stocks like Jackson typically react to events like being added to the S&P Index short term and long term. The data enables the user to forecast where the stock price may be headed, enabling traders to determine better entry and exit points for the stocks.
Longer term stock investors can use this scenario as a means of identifying emerging growth stocks that they would not ordinarily hear about until years later, when the company is large enough for its stock to warrant attention from media outlets.
The addition of Jackson Financial stock to the S&P index is one of many different bullish event-driven strategies tracked by LevelFields. These event-driven strategies can be used by themselves or in tandem with each other, to quickly identify catalysts impacting stocks. In many cases, these are the catalysts that drive technical analysis traders to react to changes in price.
LevelFields AI provides the precise context or reason for these technical analysis reactions by providing the reason for the price movements in the first place.