Know The Trend
Google Trends is excellent at identifying keywords that are gaining in popularity. Products or services that a particular corporation offers for sale can be searched in Google Trends to determine user interest. For instance, you may find that the number of keyword searches for the term “Pizza” has been steadily increasing over the past 12 months. You could then run a Google Trends scan against all take out/delivery pizzerias and identify which are increasing in line with the number of searches for pizza. Those that show an increase in search volume would suggest that there is a greater probability that sales, or rather online sales will increase as well. See below:
You can get very detailed in your Google Trend Analysis. Duration, geographic location and relative search volumes can be used to further refine your analysis.
Google Trends gives the normal everyday retail investor an edge against the much larger institutional investors. If used correctly, you could identify the next best stocks in an industry that is gaining popularity, all in the comfort of your own home. No need for a conference call to C-level executives to determine what their target market is looking like, as you would know this in advance of any executive/CEO by simply using Google Trends.
Interpret the Chart: The Search Volume Chart
Often enough you may observe a keyword that is seasonal in nature. For instance, the Luxxotica Group (NYSE:LUX) owns a brand by the name of “Ray-Ban” a brand of Sun Glasses. If you had a look at the number of searches for “Ray Ban” you would notice that spikes begin in the spring, peak during the summer months then normalize during the fall and reach a trough in the winter months, this makes trend analysis a bit difficult but by no means impossible. (See below)
You could look at the trend in two ways, but probably the best way to do this is compare the current year peak against peaks of years past. Thus if the 2013 peak in June was greater than the peak in June 2012, this would mean that the trend is up. Alternatively, you could compare the trough in 2013 against 2012 and if it were greater than the 2012 trough, you would have yourself an uptrend.
What we at Trendvesting aim to do is provide readers with trending keyword searches that have a relationship with the stock market. We’re constantly scanning the NASDAQ, AMEX and NYSE to determine which stocks are trending and give readers the advantage of knowing the trend before the herd comes rolling in.