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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified

Qlik Technologies

(

QLIK

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Qlik Technologies as such a stock due to the following factors:

  • QLIK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.9 million.
  • QLIK has traded 1.0 million shares today.
  • QLIK traded in a range 223.6% of the normal price range with a price range of $1.64.
  • QLIK traded below its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on QLIK:

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TheStreet Recommends

Qlik Technologies Inc. provides user-driven business intelligence solutions that enable customers to make business decisions. The company develops, commercializes, and implements software products and related services. Currently there are 12 analysts that rate Qlik Technologies a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for Qlik Technologies has been 1.4 million shares per day over the past 30 days. Qlik has a market cap of $3.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.42 and a short float of 10.6% with 8.40 days to cover. Shares are up 8.7% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Qlik Technologies as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:

  • QLIK's revenue growth has slightly outpaced the industry average of 10.0%. Since the same quarter one year prior, revenues rose by 13.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • QLIK has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, QLIK has a quick ratio of 1.94, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for QLIK TECHNOLOGIES INC is currently very high, coming in at 90.59%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.12% trails the industry average.
  • QLIK TECHNOLOGIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, QLIK TECHNOLOGIES INC reported poor results of -$0.28 versus -$0.12 in the prior year. This year, the market expects an improvement in earnings ($0.34 versus -$0.28).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, QLIK TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.

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