Published: June 20th, 2023
National Beverage Corp. (NASDAQ: FIZZ) has been in the news lately due to its volatile share price. The stock has traded as high as $53.52 and as low as $45.57 in the past few months. This volatility could allow investors to buy the stock at a lower price.
However, according to my valuation model, the stock is currently overvalued by about 38%. This means the opportunity to buy National Beverage at a good price has disappeared. Additionally, the stock's low beta suggests that it is not likely to reach its intrinsic value anytime soon.
While the future outlook is important when buying a stock, value investors argue that intrinsic value relative to price is the most important factor. However, National Beverage could be a good option if you are looking for growth in your portfolio. The company's earnings growth is expected to be in the teens in the upcoming years, which could lead to robust cash flows and a higher share value.
Overall, National Beverage is currently overvalued, and if you are looking for a growth stock, it could be a good option in the long term.
Let’s see the future price direction of this stock from the FIZZ technical analysis:
In the broader context, the current price of FIZZ is trading within a symmetrical triangle where lots of retail liquidity is waiting above the 54.00 key resistance level. As a result, the primary outlook of this stock is to grab buy orders from the 54.00 to 57.62 area before forming a stable direction.
In the higher timeframe price action, the price is extremely corrective and a strong impulsive buying pressure is needed before anticipating a long-term gain.
In the daily chart, the correctness is present from the 50 and 20-day SMA positions. Both lines are above the current price, while a strong descending channel breakout supports bulls. Based on the MA structure, a stable price above the 50 SMA level with a daily candle is needed before anticipating a long position.
In the tradable range, the upside limit is at 57.62; a strong bullish trend may appear above this level. On the downside, the bearish correction may extend towards the 42.00 level, from where bulls may regain momentum.
In the indicator window, the 14-period Relative Strength Index (RSI) shows buying pressure by a strong rebound and a stable momentum above the 50.00 neutral line. It signals that bulls may extend the pressure until the RSI reaches 70.00 overbought level.
Based on the current market outlook, the broader market direction for FIZZ is corrective, where a strong breakout is needed before forming a stable trend. As per the current reading, the bullish movement is highly potent, where the primary target is to test the 54.00 resistance level. Moreover, a daily candle above the 57.62 level could initiate an impulsive trend targeting the 70.00 level.
On the downside, a correction may happen towards the 42.00 level, but a break below the 38.39 low could be an alarming sign for bulls.
In the H4 chart, the current market context is corrective as the recent price moved below the Cloud resistance but failed to form a new swing low. Instead, bulls regained momentum, and multiple H4 candles came above the Kijun Sen level.
In the future cloud, the Senkou Span A is still below B, which is a signal that bulls should wait for the future cloud flip before aiming for strong buying pressure.
The indicator window shows an overbought structure where the current TDI level reached the upper boundary.
Based on the current outlook, a bullish H4 candle above the 50.53 level could signal a strong buying pressure, which may extend the momentum above the 60.00 line.
On the other hand, a bearish rejection from the Kijun Sen with a new swing low formation below the 47.00 level could signal a strong bearish pressure towards the 42.00 area.
In the hourly chart, the current market outlook is bullish as the recent price formed a bullish H1 candle above the visible range high volume level.
The dynamic 20 EMA and VWAP are below the current price, working as immediate support. Also, the gap between the price and 20 EMA extended after the breakout, increasing the possibility of a bearish correction.
In the price chart, the current demand zone is at the 48.29 to 47.15 area, from where a bullish rejection may appear, creating a long opportunity.
Based on the current multi-timeframe analysis, FIZZ stock is more likely to form strong buying pressure, but investors should wait for a stable price above the 54.00 level. Before that, short-term buying opportunities may come from lower timeframe price action.
