When an investor conducts stock market analysis, there are many variables to consider. Stock market analysis involves researching the health of the company, as well as the overall market trends. One method for stock market analysis is to look at the fundamentals of the company, which include the firm’s earnings and revenue, as well as other metrics, such as its price-to-earnings (P/E) ratio. Another form of stock market analysis is to study the charts. Stock market analysis through charts involves looking for patterns that tend to repeat over time.
October was ghoulish for stocks, with technology and small-cap companies facing the brunt of the market selling as investors sold and avoided higher-risk growth stocks, based on my stock market analysis.
The first quarter was excellent for stocks, but since it ended, the trading action has been mixed, with the S&P 500 moving lower in four months and higher in three months. The DOW, NASDAQ, and Russell 2000 have been negative since the end of March.
My stock market analysis shows me that we are currently at a standstill and waiting for a fresh catalyst to attract buyers. With Black Friday and the key holiday shopping season around the corner, things will likely pick up.
If you are into historical tendencies, we are entering the best six months of the year for investment gains, according to the Stock Trader’s Almanac. Based on historical records, investing during the six months from November to May has produced the best returns for stocks versus the June to October period. But things could be different this time around given the abundant risk, including the financial crisis in the eurozone, fears of more stalling in China, tension in the Middle East, the U.S. presidential election, and the upcoming fiscal cliff.
The near-term technical picture shows difficult chart resistance. The NASDAQ, S&P 500, and Dow Jones Industrials are stuck at below their respective 50-day moving averages (MAs) and looking for support at their 200-day MAs amid a lack of trading interest, according to my stock market analysis.
My stock market analysis of the S&P 500 shows a multi-year upward move. There’s some near-term topping action and … Read More