Under Priced Stocks

433 views

Published on

http://www.CandlestickForums.com

Under Priced Stocks

The whole point of investing in stock is finding under priced stocks. Through fundamental and technical analysis investors and traders look for stocks that are worth less today than they will be a decade from now, next year, tomorrow, an hour for now or in five minutes. The time frame depends, obviously, on whether the game is long term investing or short term trading. There are two way to identify under priced stocks. For the longer term it is necessary to do fundamental analysis of a company’s prospects, its cash flow ratios, the efficiency of its operation, its product line, and what it is selling for now versus how much it is earning. This last, the price to earnings ratio is a time honored way to spot under priced stocks. The other way and for shorter time frames is to look at technical analysis of the stock price history. Going back centuries to rice trading in ancient Japan a technique called Candlestick analysis used past market data to predict future market performance. Candlestick basics work today to help find underpriced stocks just well as they did to predict the rice market centuries ago.

The same techniques that work to find under priced stocks work for buying stock and selling stock and for buying calls or puts and selling calls or puts in options trading. The point is to be able to accurately predict where a stock price is going. In general the longer out an investor wants to predict a stock price the more he or she will rely on fundamentals of the company, market sectors, and the economy. Knowledge of technology, governmental regulation, and the like all come into play when predicting long term stock prices. For predicting shorter term price moves smart traders rely on the fact that markets repeat themselves. Thus there are stock price patterns such as Candlestick pattern formations that will reliably predict the continuance of price trends as well as market reversal.

Published in: News & Politics
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
433
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
10
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Under Priced Stocks

  1. 1. www.CandlestickForums.com Under Priced Stocks
  2. 2. www.CandlestickForums.com The whole point of investing in stock is finding under priced stocks.
  3. 3. www.CandlestickForums.com Through fundamental and technical analysis investors and traders look for stocks that are worth less today than they will be a decade from now, next year, tomorrow, an hour for now or in five minutes.
  4. 4. Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! http://www.profitableinvestingtips.com/free-webinar Conspiracy Forex Report Read every word of this report! http://www.forexconspiracyreport.com
  5. 5. www.CandlestickForums.com The time frame depends, obviously, on whether the game is long term investing or short term trading.
  6. 6. www.CandlestickForums.com There are two way to identify under priced stocks.
  7. 7. www.CandlestickForums.com For the longer term it is necessary to do fundamental analysis of a company’s prospects, its cash flow ratios, the efficiency of its operation, its product line, and what it is selling for now versus how much it is earning.
  8. 8. www.CandlestickForums.com This last, the price to earnings ratio is a time honored way to spot under priced stocks.
  9. 9. www.CandlestickForums.com The other way and for shorter time frames is to look at technical analysis of the stock price history.
  10. 10. www.CandlestickForums.com Going back centuries to rice trading in ancient Japan a technique called Candlestick analysis used past market data to predict future market performance.
  11. 11. www.CandlestickForums.com Candlestick basics work today to help find underpriced stocks just well as they did to predict the rice market centuries ago.
  12. 12. www.CandlestickForums.com The same techniques that work to find under priced stocks work for buying stock and selling stock and for buying calls or puts and selling calls or puts in options trading.
  13. 13. www.CandlestickForums.com The point is to be able to accurately predict where a stock price is going.
  14. 14. www.CandlestickForums.com In general the longer out an investor wants to predict a stock price the more he or she will rely on fundamentals of the company, market sectors, and the economy.
  15. 15. www.CandlestickForums.com Knowledge of technology, governmental regulation, and the like all come into play when predicting long term stock prices.
  16. 16. www.CandlestickForums.com For predicting shorter term price moves smart traders rely on the fact that markets repeat themselves.
  17. 17. www.CandlestickForums.com Thus there are stock price patterns such as Candlestick pattern formations that will reliably predict the continuance of price trends as well as market reversal.
  18. 18. www.CandlestickForums.com What folks do with underpriced stocks after they buy them depends upon whether they are long term investors or traders.
  19. 19. www.CandlestickForums.com The long term investor buys cheap stocks and revels in the fact that he or she is now getting 4% dividends on stocks that are three times the price at which they were purchased.
  20. 20. www.CandlestickForums.com It makes the investor happy to be getting a 12% return on investment.
  21. 21. www.CandlestickForums.com The traders will buy low and sell when the price of the stock peaks.
  22. 22. www.CandlestickForums.com Then he or she will use the profits to buy other under priced stocks and repeat the process.
  23. 23. www.CandlestickForums.com When the next stock market crash comes the trader will more likely see it coming and will short sell and make money on the way down while the long term investor may just rationalize that even if the stock is only worth half as much as yesterday it is still worth a lot more than when he or she bought it.
  24. 24. www.CandlestickForums.com The savvy trader just counts his or her money and moves on to the next trade.

×