PSE Website part 9: Basic Charts

source: http://www.greekshares.com/ 

Now that you know how valuable a chart is lets check out the PSE website for some charts. You can go to the Chart tab in the information link of stock you are looking at, for illustration purposes lets use FGEN:

 The basic charts are the Price chart of the high, low, open and last traded price of the stock. Each is represented by a color. Usually the PSE opens the charts at a annual chart range.

In the left side you can see the Chart options. You can change the date range which are 6 month, one year and two year. Chart type could be Line, Bar, Candle Stick, and OHLC(Open-High-Low-Close)

 You can also chose what indicator would you like to view. Below the Price chart is the  Volume chart which represents the number of traded stocks for that period or time frame.

Two famous indicators charts are also shown: MACD and Stochastic. I am not an expert in Technical analysis but got this info from www.ehow.com regarding these two well known indicator charts:

MACD analysis
Observe the interaction between the fast and slow lines. When the fast signal line(blue line) rises above and crosses the slow MACD line(red line), it means buyers are starting to dominate and a trader might consider buying that particular stock. When the fast line falls below and crosses the slow MACD line, it means sellers are starting to dominate and a trader might consider selling that particular stock.

Stochastic Analysis
Look at the instances where the %K line crosses and rises above the %D line. This indicates point when you should buy the stock. And if you look at the instances where the %K line dips under the %D line, then this is a signal to sell.

What is the rationale for this method of stochastic interpretation? The %K line is above the %D line when the price is on the rise, and it lies below the %D line when the price is falling. And because stock traders aim to buy low and sell high, these crossings signal the appropriate time to buy or sell.

For another way to interpret the stochastic oscillations, observe when the %K and %D lines rise above .8 = 80% and dip below .2 = 20%.

When the %K and %D lines rise above 80%, many stock analysts recommend selling as soon as the lines dip back down below 80%. And when the %K and %D lines dip below 20%, analysts advise stock traders to buy once the lines rise above 20%.

PSE Website part 9: Basic Charts

source: http://www.greekshares.com/ 

Now that you know how valuable a chart is lets check out the PSE website for some charts. You can go to the Chart tab in the information link of stock you are looking at, for illustration purposes lets use FGEN:

 The basic charts are the Price chart of the high, low, open and last traded price of the stock. Each is represented by a color. Usually the PSE opens the charts at a annual chart range.

In the left side you can see the Chart options. You can change the date range which are 6 month, one year and two year. Chart type could be Line, Bar, Candle Stick, and OHLC(Open-High-Low-Close)

 You can also chose what indicator would you like to view. Below the Price chart is the  Volume chart which represents the number of traded stocks for that period or time frame.

Two famous indicators charts are also shown: MACD and Stochastic. I am not an expert in Technical analysis but got this info from www.ehow.com regarding these two well known indicator charts:

MACD analysis
Observe the interaction between the fast and slow lines. When the fast signal line(blue line) rises above and crosses the slow MACD line(red line), it means buyers are starting to dominate and a trader might consider buying that particular stock. When the fast line falls below and crosses the slow MACD line, it means sellers are starting to dominate and a trader might consider selling that particular stock.

Stochastic Analysis
Look at the instances where the %K line crosses and rises above the %D line. This indicates point when you should buy the stock. And if you look at the instances where the %K line dips under the %D line, then this is a signal to sell.

What is the rationale for this method of stochastic interpretation? The %K line is above the %D line when the price is on the rise, and it lies below the %D line when the price is falling. And because stock traders aim to buy low and sell high, these crossings signal the appropriate time to buy or sell.

For another way to interpret the stochastic oscillations, observe when the %K and %D lines rise above .8 = 80% and dip below .2 = 20%.

When the %K and %D lines rise above 80%, many stock analysts recommend selling as soon as the lines dip back down below 80%. And when the %K and %D lines dip below 20%, analysts advise stock traders to buy once the lines rise above 20%.

PSE Website part 9: Basic Charts

source: http://www.greekshares.com/ 

Now that you know how valuable a chart is lets check out the PSE website for some charts. You can go to the Chart tab in the information link of stock you are looking at, for illustration purposes lets use FGEN:

 The basic charts are the Price chart of the high, low, open and last traded price of the stock. Each is represented by a color. Usually the PSE opens the charts at a annual chart range.

In the left side you can see the Chart options. You can change the date range which are 6 month, one year and two year. Chart type could be Line, Bar, Candle Stick, and OHLC(Open-High-Low-Close)

 You can also chose what indicator would you like to view. Below the Price chart is the  Volume chart which represents the number of traded stocks for that period or time frame.

Two famous indicators charts are also shown: MACD and Stochastic. I am not an expert in Technical analysis but got this info from www.ehow.com regarding these two well known indicator charts:

MACD analysis
Observe the interaction between the fast and slow lines. When the fast signal line(blue line) rises above and crosses the slow MACD line(red line), it means buyers are starting to dominate and a trader might consider buying that particular stock. When the fast line falls below and crosses the slow MACD line, it means sellers are starting to dominate and a trader might consider selling that particular stock.

Stochastic Analysis
Look at the instances where the %K line crosses and rises above the %D line. This indicates point when you should buy the stock. And if you look at the instances where the %K line dips under the %D line, then this is a signal to sell.

What is the rationale for this method of stochastic interpretation? The %K line is above the %D line when the price is on the rise, and it lies below the %D line when the price is falling. And because stock traders aim to buy low and sell high, these crossings signal the appropriate time to buy or sell.

For another way to interpret the stochastic oscillations, observe when the %K and %D lines rise above .8 = 80% and dip below .2 = 20%.

When the %K and %D lines rise above 80%, many stock analysts recommend selling as soon as the lines dip back down below 80%. And when the %K and %D lines dip below 20%, analysts advise stock traders to buy once the lines rise above 20%.

What is P/E ratio?

 source: http://www.tradingcritic.com/

Here is another important Fundamental analysis that one can use in gauging a stock.

Price earnings ratio or commonly known as P/E ratio is a valuation ratio. A simple computation is dividing the market price per share by EPS per share or dividing market capitalization by net income. P/E ratio is an indicative of how the market or investors value the stock. A higher P/E ratio means the investing market is willing to pay for such stock that number of times for its earnings. It indicates that the perceived expectation of the market is that the company will perform well thus they are willing to pay more for it.

Knowing the P/E ratio gives you two information when you use it to compare stock buys. Stocks with higher P/E ratio are stocks that are probably believed by the market as profitable in the long run and the second is if comparing stocks with the same level it indicates which stock is overpriced.

For example Company A has a P/E ratio of 18 while Company B has 6, this indicates that Company A is perceived by the market as having more profit generating capability than Company B. But upon looking closely when such two companies have the same EPS it only means that Company A is over priced as compared to company B.

What is P/E ratio?

 source: http://www.tradingcritic.com/

Here is another important Fundamental analysis that one can use in gauging a stock.

Price earnings ratio or commonly known as P/E ratio is a valuation ratio. A simple computation is dividing the market price per share by EPS per share or dividing market capitalization by net income. P/E ratio is an indicative of how the market or investors value the stock. A higher P/E ratio means the investing market is willing to pay for such stock that number of times for its earnings. It indicates that the perceived expectation of the market is that the company will perform well thus they are willing to pay more for it.

Knowing the P/E ratio gives you two information when you use it to compare stock buys. Stocks with higher P/E ratio are stocks that are probably believed by the market as profitable in the long run and the second is if comparing stocks with the same level it indicates which stock is overpriced.

For example Company A has a P/E ratio of 18 while Company B has 6, this indicates that Company A is perceived by the market as having more profit generating capability than Company B. But upon looking closely when such two companies have the same EPS it only means that Company A is over priced as compared to company B.

What is P/E ratio?

 source: http://www.tradingcritic.com/

Here is another important Fundamental analysis that one can use in gauging a stock.

Price earnings ratio or commonly known as P/E ratio is a valuation ratio. A simple computation is dividing the market price per share by EPS per share or dividing market capitalization by net income. P/E ratio is an indicative of how the market or investors value the stock. A higher P/E ratio means the investing market is willing to pay for such stock that number of times for its earnings. It indicates that the perceived expectation of the market is that the company will perform well thus they are willing to pay more for it.

Knowing the P/E ratio gives you two information when you use it to compare stock buys. Stocks with higher P/E ratio are stocks that are probably believed by the market as profitable in the long run and the second is if comparing stocks with the same level it indicates which stock is overpriced.

For example Company A has a P/E ratio of 18 while Company B has 6, this indicates that Company A is perceived by the market as having more profit generating capability than Company B. But upon looking closely when such two companies have the same EPS it only means that Company A is over priced as compared to company B.

Investing terminologies 101: Fundamental and Technical Analysis

 source: http://www.babypips.com

 

I know you don't want to hear this gibberish words because as we Pinoys say it "dudugo ang ilong" (my nose will bleed) and you end up in the mental hospital because you will loose your sanity once you read and try to understand this words. But if you are really serious in investing this is a must and I insist that you start reading the business column of the newspaper instead of the horoscope section.

One thing more lest get the definitions of this two words from Wikipedia.org:

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis.Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts.

Technical analysis is a security analysis discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume.

I think the description from Wikipedia is enough to explain these two words but let me further explain.

When buying how do you determine the price of a product? Isn't it that you either refer to the old price you know or you might do what we call canvassing right? It is the same with the stock market. You need information to determine the right price for the stock you are buying. With these information of course one should analyze so that a final prize could be pegged to such stock you are buying. In the Philippine Stock Exchange the rule is to not to be 3 level higher or lower from the last traded price based on the Board lot and fluctuation schedule. 

Fundamental analysis primarily gives you the idea what the stock's value based on the historical record which we call Financial Statement. You get to see the Assets(properties) and Liabilities(debts) of the company by looking at there Balance sheets or Statement of Position. It also shows distribution of ownership of the company in its Stockholders Equity. With these information one can analyze the valuations such as Liquidity(capacity to pay current debts), Working Capital(capacity to operate the business) and some other else.( I told you you might say "dumudugo na ang ilong ko Louis").

Another report usually called Profit & Loss report or Statement of Performance shows the companies results of operation on a particular period. This report will give you a picture of where does the company sell or earn, what expenses are spend to operate, and how much earnings did the company make. 

These information help you determine if it is wise to invest in the stock because it shows the viability of the company to earn in the near future and thus reward you with dividends(that's what we get when the board of directors are generous enough to share some profit of the company in other words its ka-ching!)

Now technical analysis on the other hand is more of a forecasting analysis. Let say its as if you are reading the horoscope of your chosen stock to invest into. These is where the word TREND comes. Data use in these analysis are the prices and trade volume of the stock. These analysis indicate the likelihood of the stock going up or going down. Usually it makes use of charts to visualize the possible outcome of the stock price. It shows when did investors and speculators bought a lot and at what price. An uptrend does not usually indicate that the stock's value is going up. It might be a result of speculators hoping to make a short gain due to some news or other market forces that is happening in the world(observe the current Greece debt crisis and debt releif and the recent Philippine election in which Noynoy was the leading presidential candidate)

Technical analysis gives you an idea when the stock price may rise or fall. With that knowledge you will be able to plan when to buy good stocks(buy stocks with good fundamental analysis when prices are down) and sell(when the price of the stock is near or above your target price or if the price surpass your breakeven price per stock). You only gain when you have sold your stock above your total acquisition cost(that is the price you bought that stock plus cost to by it like brokers commission, SCCP charges, Stock transaction tax, etc.)

Now tell me are these two words not worth knowing? If you do or you don't leave a comment and let us talk about it.

Investing terminologies 101: Fundamental and Technical Analysis

 source: http://www.babypips.com

 

I know you don't want to hear this gibberish words because as we Pinoys say it "dudugo ang ilong" (my nose will bleed) and you end up in the mental hospital because you will loose your sanity once you read and try to understand this words. But if you are really serious in investing this is a must and I insist that you start reading the business column of the newspaper instead of the horoscope section.

One thing more lest get the definitions of this two words from Wikipedia.org:

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis.Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts.

Technical analysis is a security analysis discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume.

I think the description from Wikipedia is enough to explain these two words but let me further explain.

When buying how do you determine the price of a product? Isn't it that you either refer to the old price you know or you might do what we call canvassing right? It is the same with the stock market. You need information to determine the right price for the stock you are buying. With these information of course one should analyze so that a final prize could be pegged to such stock you are buying. In the Philippine Stock Exchange the rule is to not to be 3 level higher or lower from the last traded price based on the Board lot and fluctuation schedule. 

Fundamental analysis primarily gives you the idea what the stock's value based on the historical record which we call Financial Statement. You get to see the Assets(properties) and Liabilities(debts) of the company by looking at there Balance sheets or Statement of Position. It also shows distribution of ownership of the company in its Stockholders Equity. With these information one can analyze the valuations such as Liquidity(capacity to pay current debts), Working Capital(capacity to operate the business) and some other else.( I told you you might say "dumudugo na ang ilong ko Louis").

Another report usually called Profit & Loss report or Statement of Performance shows the companies results of operation on a particular period. This report will give you a picture of where does the company sell or earn, what expenses are spend to operate, and how much earnings did the company make. 

These information help you determine if it is wise to invest in the stock because it shows the viability of the company to earn in the near future and thus reward you with dividends(that's what we get when the board of directors are generous enough to share some profit of the company in other words its ka-ching!)

Now technical analysis on the other hand is more of a forecasting analysis. Let say its as if you are reading the horoscope of your chosen stock to invest into. These is where the word TREND comes. Data use in these analysis are the prices and trade volume of the stock. These analysis indicate the likelihood of the stock going up or going down. Usually it makes use of charts to visualize the possible outcome of the stock price. It shows when did investors and speculators bought a lot and at what price. An uptrend does not usually indicate that the stock's value is going up. It might be a result of speculators hoping to make a short gain due to some news or other market forces that is happening in the world(observe the current Greece debt crisis and debt releif and the recent Philippine election in which Noynoy was the leading presidential candidate)

Technical analysis gives you an idea when the stock price may rise or fall. With that knowledge you will be able to plan when to buy good stocks(buy stocks with good fundamental analysis when prices are down) and sell(when the price of the stock is near or above your target price or if the price surpass your breakeven price per stock). You only gain when you have sold your stock above your total acquisition cost(that is the price you bought that stock plus cost to by it like brokers commission, SCCP charges, Stock transaction tax, etc.)

Now tell me are these two words not worth knowing? If you do or you don't leave a comment and let us talk about it.

Investing terminologies 101: Fundamental and Technical Analysis

I know you don't want to hear this gibberish words because as we Pinoys say it "dudugo ang ilong" (my nose will bleed) and you end up in the mental hospital because you will loose your sanity once you read and try to understand this words. But if you are really serious in investing this is a must and I insist that you start reading the business column of the newspaper instead of the horoscope section.

One thing more lest get the definitions of this two words from Wikipedia.org:

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis.Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts.

Technical analysis is a security analysis discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume.

I think the description from Wikipedia is enough to explain these two words but let me further explain.

When buying how do you determine the price of a product? Isn't it that you either refer to the old price you know or you might do what we call canvassing right? It is the same with the stock market. You need information to determine the right price for the stock you are buying. With these information of course one should analyze so that a final prize could be pegged to such stock you are buying. In the Philippine Stock Exchange the rule is to not to be 3 level higher or lower from the last traded price based on the Board lot and fluctuation schedule. 

Fundamental analysis primarily gives you the idea what the stock's value based on the historical record which we call Financial Statement. You get to see the Assets(properties) and Liabilities(debts) of the company by looking at there Balance sheets or Statement of Position. It also shows distribution of ownership of the company in its Stockholders Equity. With these information one can analyze the valuations such as Liquidity(capacity to pay current debts), Working Capital(capacity to operate the business) and some other else.( I told you you might say "dumudugo na ang ilong ko Louis").

Another report usually called Profit & Loss report or Statement of Performance shows the companies results of operation on a particular period. This report will give you a picture of where does the company sell or earn, what expenses are spend to operate, and how much earnings did the company make. 

These information help you determine if it is wise to invest in the stock because it shows the viability of the company to earn in the near future and thus reward you with dividends(that's what we get when the board of directors are generous enough to share some profit of the company in other words its ka-ching!)

Now technical analysis on the other hand is more of a forecasting analysis. Let say its as if you are reading the horoscope of your chosen stock to invest into. These is where the word TREND comes. Data use in these analysis are the prices and trade volume of the stock. These analysis indicate the likelihood of the stock going up or going down. Usually it makes use of charts to visualize the possible outcome of the stock price. It shows when did investors and speculators bought a lot and at what price. An uptrend does not usually indicate that the stock's value is going up. It might be a result of speculators hoping to make a short gain due to some news or other market forces that is happening in the world(observe the current Greece debt crisis and debt releif and the recent Philippine election in which Noynoy was the leading presidential candidate)

Technical analysis gives you an idea when the stock price may rise or fall. With that knowledge you will be able to plan when to buy good stocks(buy stocks with good fundamental analysis when prices are down) and sell(when the price of the stock is near or above your target price or if the price surpass your breakeven price per stock). You only gain when you have sold your stock above your total acquisition cost(that is the price you bought that stock plus cost to by it like brokers commission, SCCP charges, Stock transaction tax, etc.)

Now tell me are these two words not worth knowing? If you do or you don't leave a comment and let us talk about it.