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Technical and Fundamental Analysis

Anybody here knows how to interpret charts? and financial statements? I want to learn technical and fundamental analysis of companies in the stock market.
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  • ang lagay e ... :glee:
    sina masterhulk, richdude et al ang mga masters sa ta/fa :)
  • peyupsdotcom_erning.gif

    Hulk and richyuppie can help you with these... isama mo na rin 'yang si Spyfrat... silang tatlo ang hari dito pagdating sa mga ganyang usapan... and these people are friendly and approachable naman

    by the way... dreamer002244... i'll be joining your Cashflow game sessions... i can likewise teach you a thing or two about ta/fa's
  • Yeah right, spyfrat! You have your own technical analysis webpage. Check out http://www.geocities.com/spyfrat

    Indeed!
  • HulkHulk PEx Veteran ⭐⭐
    Contrary to popular belief, konti lang ang alam ko sa technical analysis. :lol:

    I can however help you in fundamental and financial statement analysis. So where do you want to start? :)


    :frank:
  • I'm just new to the trading market kaya medyo konti pa lang ang alam ko sa fundamental & technical analysis, pero I hope that in the future makatulong ako sa mga gusto matuto. Pero ngayon gusto ko rin matuto ng maigi. :D
  • Originally posted by ready2go
    peyupsdotcom_erning.gif

    Hulk and richyuppie can help you with these... isama mo na rin 'yang si Spyfrat... silang tatlo ang hari dito pagdating sa mga ganyang usapan... and these people are friendly and approachable naman

    by the way... dreamer002244... i'll be joining your Cashflow game sessions... i can likewise teach you a thing or two about ta/fa's

    cge, we have another session this coming thurs. 1 Aug. Pls. reserve now. coz we can only accomodate 2 players. my icq is 34768358 :) Have u played the game b4?
  • konti lang alam ko sa ta e. saka exploring lang ako palagi. pero cge naks baka may ma e share ako :)
  • Originally posted by Hulk
    Contrary to popular belief, konti lang ang alam ko sa technical analysis. :lol:

    I can however help you in fundamental and financial statement analysis. So where do you want to start? :)


    :frank:

    Hulk, is it true that by analysing fundamental and financial statements, we can predict whether a company is healthy or not?

    btw, how much do u charge kung magpapaturo ako sayo?
  • Originally posted by dreamer002244


    cge, we have another session this coming thurs. 1 Aug. Pls. reserve now. coz we can only accomodate 2 players. my icq is 34768358 :) Have u played the game b4?

    no i haven't played the game before... but i will be there on aug 1... and i will be late (around 5pm ako dadating)... i'm planning to watch you guys first then maybe play in the next week
  • humble mashado itong si Spyfrat

    hehe...

    anyway, psst Hulk... sige nga... post ka rito ng mga fundamental analysis techniques mo dito

    salamat :D

    r2g :coolhat:
  • style ko lang yan para kung palpak analysis ko, sasabihin ko "o kitam sabi nang wala akong alam e" :glee:
  • HulkHulk PEx Veteran ⭐⭐
    Originally posted by dreamer002244


    Hulk, is it true that by analysing fundamental and financial statements, we can predict whether a company is healthy or not?

    btw, how much do u charge kung magpapaturo ako sayo?

    Nice place to start.

    Well supposedly you can, but you have to understand that the preparation of financial statements are the responsibility of the management of the company. An analyst should always have an attitude of professional skepticism in analyzing them.

    Fortunately for analysts, independent external auditors are there to give their opinions with regards the reliability of the financial statements. That's assuming of course they did their job properly (Enron anyone?)

    So let's start with understanding of what the auditors opinion is all about. In every financial statement that you see, there's a page at the start that gives the auditor's report. It's kinda funny because I've met some analysts who don't read this page, much less understand it.

    Auditors merely give opinions on financial statements, whether the F/S presents fairly in material respect the financial status of the company. They are not saying that it's 100% accurate or that the company's financially sound. They're merely saying that given their tests, that the preparation was fair.

    There are four types of opinions. They are:

    Clean opinion - the F/S are presented fairly in all material respects
    Significant deficiencies - the F/S as a whole are presented fairly except for certain accounts or subject to certain adjustments. You can clearly see the words in italics in those reports. However, the deficiencies are not major enough to warrant the next type
    Adverse - the auditor doesn't believe that the F/S are presented fairly
    Disclaimer - the auditor can't form an opinion based on a limted amount of facts

    Now you understand what that page is for. :)

    Now going back to your question, aside from the financial statements itself, the analyst should also gather other information about the company to get a clearer picture of the company. Information on areas like management, products, market share, competition, litigation status and bank credit lines.

    O tama na muna iyan. Antayin ko muna yung check ko. :lol:

    :frank:
  • Technical Analysis vs. Fundamental Analysis

    The study of the stock market has become divided into two schools of thought: fundamental analysis and technical analysis.

    Fundamental Analysis
    - Is the study the company's current management and position in the market
    - Economic, social, and political factors
    - Accounting-related factors
    - The potential to generate earnings to determine whether stock prices are valued correctly, undervalued, or overvalued

    Technical Analysis
    - The study of price and volume based mostly on graph and chart patterns to identify trends

    Fundamental analysis focuses on the economic forces of supply and demand that cause prices to move higher, lower or stay the same. The fundamental approach examines all the relevant factors affecting the price of a market in order to determine the intrinsic value of that market. The intrinsic value is what fundamentalists indicate something is actually worth based on the law of supply and demand. If this intrinsic value is under the current market price, then the market is overpriced and should be sold. If market price is below the intrinsic value, then the market is undervalued and should be bought.

    On the other hand, Technical Analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future price trends. The term "market action" includes the two principal sources of information available to the technician - price and volume.

    There are three premises on which the technical approach is based:

    1. Market action discounts everything - The technician believes that anything that can possibly affect the price - fundamentally, politically, psychologically, or otherwise - is already reflected in the price of that market. It follows, therefore, that a study of price action is all that is required.

    2. Prices move in trends - The whole purpose of charting the price action of a market is to identify trends in early stages of their development for the purpose of trading in the direction of those trends.

    3. History repeats itself - The key to understanding the future lies in a study of the past, or that the future is just a repetition of the past. Patterns in the market are based on human psychology, which tends not to change.

    Both of these approaches to market forecasting attempt to solve the same problem, that is, to determine the direction prices are likely to move. They just approach the problem from different directions. The fundamentalist studies the cause of market movement, while the technician studies the effect. The problem is that the charts and fundamentalists are often in conflict with each other. Usually at the beginning of important market moves, the fundamentals do not explain or support what the market seems to be doing. It is at these critical times in the trend that these two approaches seem to differ the most. Usually they come back in sync at some point, but often too late for the trader to act. One explanation for these seeming discrepancies is that market price tends to lead the known fundamentals. While the know fundamentals have already been discounted and are already "in the market", prices are now reacting to the unknown fundamentals. Some of the most dramatic bull and bear markets in history have begun with little or no perceived change in the fundamentals. By the time those changes became known, the new trend was well underway.

    In accepting the premises of technical analysis, one can see why technicians believe their approach is superior to the fundamentalists. If a trader had to choose only one of the two approaches to use, the choice would logically have to be the technical. Because, by definition, the technical approach includes the fundamental. If the fundamentals are reflected in market price, then the study of fundamentals becomes unnecessary. Chart reading becomes a shortcut form of fundamental analysis. The reverse, however, is not true. Fundamental analysis does not include a study of price action. It is possible to trade financial market using just the technical approach. It is doubtful that anyone could trade off the fundamentals alone with no consideration of the technical side of the market.



    More to follow!!! (Hey Hulk, mine's free of charge, hehehe:lol: )



    Indeed!
  • In my humble opinion... when it comes to the stock market... it is better to use the fundamentals to choose which issue to focus on... but you should always use technical analysis when the matter of investing on these chosen stocks becomes the subject matter.

    That's my two cents coming from an I.T. person.

    r2g :coolhat:
  • I don't if it's me lang or what, but I just can't appreciate technical analysis. I'd rather go for fundamental analysis and Milton Friedman's Random Walk Theory.
  • Thanks to all of you guys. pero sa totoo lang nakalito :)

    Can u recommend a book that discuss fa in greater details? and is it true na to be a successful investor dapat fa/ta ang titingnan?

    Do we have a call and put options here in PSE?

    ready2go, deal tayo. I'll teach the details of cashflow. turuan mo ko ng ta/fa etc.

    Salamat
  • Originally posted by richyuppie
    Technical Analysis vs. Fundamental Analysis

    The study of the stock market has become divided into two schools of thought: fundamental analysis and technical analysis.

    Fundamental Analysis
    - Is the study the company's current management and position in the market
    - Economic, social, and political factors
    - Accounting-related factors
    - The potential to generate earnings to determine whether stock prices are valued correctly, undervalued, or overvalued

    Technical Analysis
    - The study of price and volume based mostly on graph and chart patterns to identify trends

    Fundamental analysis focuses on the economic forces of supply and demand that cause prices to move higher, lower or stay the same. The fundamental approach examines all the relevant factors affecting the price of a market in order to determine the intrinsic value of that market. The intrinsic value is what fundamentalists indicate something is actually worth based on the law of supply and demand. If this intrinsic value is under the current market price, then the market is overpriced and should be sold. If market price is below the intrinsic value, then the market is undervalued and should be bought.

    On the other hand, Technical Analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future price trends. The term "market action" includes the two principal sources of information available to the technician - price and volume.

    There are three premises on which the technical approach is based:

    1. Market action discounts everything - The technician believes that anything that can possibly affect the price - fundamentally, politically, psychologically, or otherwise - is already reflected in the price of that market. It follows, therefore, that a study of price action is all that is required.

    2. Prices move in trends - The whole purpose of charting the price action of a market is to identify trends in early stages of their development for the purpose of trading in the direction of those trends.

    3. History repeats itself - The key to understanding the future lies in a study of the past, or that the future is just a repetition of the past. Patterns in the market are based on human psychology, which tends not to change.

    Both of these approaches to market forecasting attempt to solve the same problem, that is, to determine the direction prices are likely to move. They just approach the problem from different directions. The fundamentalist studies the cause of market movement, while the technician studies the effect. The problem is that the charts and fundamentalists are often in conflict with each other. Usually at the beginning of important market moves, the fundamentals do not explain or support what the market seems to be doing. It is at these critical times in the trend that these two approaches seem to differ the most. Usually they come back in sync at some point, but often too late for the trader to act. One explanation for these seeming discrepancies is that market price tends to lead the known fundamentals. While the know fundamentals have already been discounted and are already "in the market", prices are now reacting to the unknown fundamentals. Some of the most dramatic bull and bear markets in history have begun with little or no perceived change in the fundamentals. By the time those changes became known, the new trend was well underway.

    In accepting the premises of technical analysis, one can see why technicians believe their approach is superior to the fundamentalists. If a trader had to choose only one of the two approaches to use, the choice would logically have to be the technical. Because, by definition, the technical approach includes the fundamental. If the fundamentals are reflected in market price, then the study of fundamentals becomes unnecessary. Chart reading becomes a shortcut form of fundamental analysis. The reverse, however, is not true. Fundamental analysis does not include a study of price action. It is possible to trade financial market using just the technical approach. It is doubtful that anyone could trade off the fundamentals alone with no consideration of the technical side of the market.



    More to follow!!! (Hey Hulk, mine's free of charge, hehehe:lol: )



    Indeed!



    Richyuppie, thanks very much for this info. have u reach the point where when u see fa/ta, u know its a sell or buy? Can u guys teach me the details?
    :)

    Btw, richyuppie and hulk, u guys work in stock exchange or bank?
  • HulkHulk PEx Veteran ⭐⭐
    I work in a laundromat! :lol:


    :frank:
  • Is interpreting charts/F & T the same lang ke sa stock market ka pa o sa money market?

    FYI, I'm in the money market whilst this thread is devoted in analyzing in the stock market.
  • HulkHulk PEx Veteran ⭐⭐
    Originally posted by bullish
    Is interpreting charts/F & T the same lang ke sa stock market ka pa o sa money market?

    FYI, I'm in the money market whilst this thread is devoted in analyzing in the stock market.

    Nope. In the money market all you need is good old-fasioned Economics. Well knowledge of the Bureau of Treasury's cashflow will also pay great dividends.


    :frank:
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