2 Types of Stock Analysis That Beginners Should Understand
Do you want to learn to invest by choosing stocks as the focus? If so, then stock analysis is very important. Yes, this becomes a basic thing that is commonly done by investors before buying certain stocks. Through analysis, both investors and traders will have a direction whenever they buy and sell stocks.
What is Stock Analysis
There are two types of analysis, fundamental and technical, each of which has its own benefits. That way, you have the knowledge and provision when you want to invest long-term or long-term. However, first you must know the understanding of stock analysis.
In general, we can define stock analysis as an effort to dissect and review the shares of certain companies that aim to see and assess their performance so far. So that potential investors can determine whether their preferred stock is worth buying or not. Eligibility here means whether the stock can provide profit or not.
Of course, you can do a daily stock analysis after knowing how to analyze correctly. So, make sure you don't learn it half-and-half.
Fundamental Stock Analysis
As mentioned earlier that there are two types of stock analysis and one of them is fundamental stock analysis. For information, public interest in the capital market increases in the pandemic period. One of the most widely chosen instruments is stocks.
However, you should not carelessly make the decision to invest. In other words, you must have enough foundation and knowledge so as not to get stuck in trading time. Do you know how to analyze the best stocks?
Fundamental stock analysis is an analysis that aims to study things related to the financial condition of a particular company. The goal is to be able to know the basic properties and operational characteristics of public companies.
Potential investors or traders will have a clue as to which stocks they will invest in. So, it is clear that playing stocks is not just about the amount of money you have to buy certain stocks.
Speaking of fundamental analysis, there are two types of approaches that are commonly used, namely:
Analyzes Fundamental Top-down
The top-down fundamental analysis approach allows investors to see a general picture of a company's performance. In short, if in general the company has a good performance then the company components can be considered good. In this approach, there are 4 points that are considered, namely:
Global macroeconomic conditions
Macroeconomic conditions in the country
Growth prospects per business sector
Company fundamentals
In order to get an overview of the company's performance in the future, then make sure the four points above have a positive picture. Interested in doing bbri stock analysis?
Bottom-up Fundamental Analysis Approach
The second approach is the bottom-up fundamental stock analysis approach which is the opposite of the first approach. Here, you should be able to see the detailed aspects of a company's performance. It doesn't matter if you have to take a peek at your financial statements. In fact, you should also know my business power of the company.
Because this approach requires investors to do a deeper review, they may have to be patient and spend more time, effort, and energy. The goal is for them to really know in detail what a company is performing for a stock investment.
Technical Stock Analysis
What is technical stock analysis like? This analysis is not only dynamic but also applicative and requires perseverance to learn it. In general, there are two methods used, namely classical and modern methods.
As the name implies, technical analysis involves a technical approach with the use of two methods. The classic method uses stock price charts whereas modern methods use indicators with algorithms or statistical formulas to be able to describe the chart.
Through technical analysis, investors can see current market conditions based on past price history. In addition, they can also get an overview of stock price movements in the future.
Yes, this analysis is very helpful for those who want to invest in the long term. Investors can determine the right time to buy shares. Traders can use technical analysis as a reference when determining stocks that have the potential to provide profit in the short term. This analysis is more often used by traders because it is technical with faster movements.
How to Analyze Fundamental Stocks
Fundamental stock analysis is usually used by investors who choose short-term investments. This analysis technique helps them in making stock buying and selling decisions. To be able to do this, there are several ways, such as:
1. Pay Attention to the Company's Performance and Condition
To carry out fundamental analysis, financial statements are needed as a basis for assessing stock valuations. It also helps to know the performance as well as the condition of the company. When deciding to buy shares of a particular company, you must pay attention to the performance and condition of the company.
In addition to ascertaining whether the performance is good or not, you should also be able to see if the performance will continue to last for years continuously.
Instead of buying stocks cheaply, choose a company that can give you a sense of comfort in 20-30 years or even a lifetime. However, every return to your goals and desires in stock investing.
2. Set a Reference for Fair Price of Shares
In addition to getting a good and potential company, another goal of buying shares of a company is to get a good price. Ideally, investors hunt for stocks at prices below the value of the company.
It takes a reference to the stock price in order to determine the price of the stock cheap or expensive and good or not. With this reference, investors will not buy. Do you already have a stock price?
Price references should be reasonable so that you are also not easily affected by market movements. To determine the price reference, you can use relative valuation and intrinsic valuation techniques.
As a beginner, you can choose the easiest technique that is relative valuation. This means that you will compare the shares of one company with other similar companies. The indicator used is the price to book or the ratio of price to company book value. The second indicator is the price to earning ratio or price-to-value ratio of net income per share.
3. Monitor and Evaluate Stocks Regularly
Investing in stocks is not done simply by buying at low prices and selling them when prices go up or expensive. You don't know when the stock price will go up and it's ideal to sell if you don't monitor, right?
Therefore, you should always monitor and evaluate stocks regularly. It sounds time-consuming, but you have the opportunity to get a return on the investment that is being run. If you can't do it directly or don't know how to properly monitor and evaluate, you can work with the expert. Unfortunately, there must be a number of funds prepared in order to use these services.
How to Analyze Technical Stocks
When talking about technical stock analysis, you may be interested in telkom stock analysis. But, be patient until you really understand all about stock analysis. The purpose of technical stock analysis is to determine when the right time to buy and sell shares.
Another goal is to determine the entry point and exit point and stock trend.
Relative Strength Index
Familiar with this term? Relative Strength Index is one of the indicators in technical stock analysis that is used to measure the magnitude of price volatility of an asset. Thus, we can evaluate whether the asset is in a overbought or oversold position.
If the line reads above the scale of 70 then it can be said that the market is in a overbought condition. Whereas if the line reads below the 30 scale, it can be interpreted that the market is in a state of oversold or oversold.
Rsi or Relative Strength Index is then displayed in a chart moving between two extreme points with values that are between 0 to 100. The developer of this indicator is J. Welles Wilder Jr. In his book New Concepts in Technical Trading System in 1978.
This indicator measures changes in an asset's price over a 14-day period (for daily charts) or 14 hours (for hourly charts). Those who often use indicator one ii are traders and technical analysis.
Moving Average Convergence/Divergence (MACD)
Another indicator of technical analysis of a stock is MACD or Moving Average Convergence/Divergence. This indicator provides an overview of the relationship between two moving averages or average prices in asset price trends.
Because it is flexible and easy to use, more and more traders are liking this one indicator. Traders in the stock, commodity, foreign exchange, or bond markets use this indicator not only to see trends but also momentum.
Crossover
We can say crossover as the art of looking at the trend of moving average convergence /divergence or MACD line when compared to the signal line. If the line crosses below the signal line, then the asset price is in the bearish zone. This means that the trader must immediately release his assets.
Whereas if the MACD line crosses above the signal line, then the asset price is in the bullish zone. This is a hint that the trader must immediately buy the asset.
Divergence
Divergence is another type of MACD in technical analysis. When the moving average convergence/divergence line conditions form the highs and lows opposite the highs and lows of an asset's price, this is divergence.
If two lows on the line on the Moving Average Convergence/Divergence or MACD line correspond to the bottom two lines in the asset price, then that is a bullish condition.
Oscillator
In general, technical analysis of stocks has two indicators, namely overlays and Oscillators. Examples of overlays are MA or Moving Average and BB or Bollinger Brands. An example of an oscillator is MACD or RSI.
Oscillators themselves appear separately from price movement charts. It is also the deciding bar or the end of a trend. So, what is an oscillator? Oscillator is a technical analysis tool that builds high and low bands between two extreme values. Not only that, oscillators also build trend indicators that fluctuate within boundaries. Traders use this indicator to be able to find short-term overbought or oversold conditions.
Bollinger Band
In trading, bollinger bands become quite popular indicators. Traders recognize that this indicator is the basic key for them to always make a profit.
This indicator shows the relative limits of price ups and downs in the form of lines drawn in and around the structure of the marketed stock price movement. Bollinger bands consist of 3 lines that will always move following price movements, namely:
Upper band
Middle band
Lower band
Best Stock Analysis App
Technological sophistication has a positive impact in various fields. When you start investing in stocks, you can use a stock analysis app. This app will help you analyze stocks anytime and anywhere even if you're sleeping. With the help of the application, you will still be able to monitor stock movements so that you can make various wise decisions.
None other than the end goal is the cuan of the investment. To facilitate the trading experience, there are several stock application options. Beginners need the best app.
1. Indonesian Stock Data
If you want to use an application with an ideal interface, then the choice is Indonesian Stock Data. The movement of the stock can be seen in detail. Although it is a free application but provides the opportunity and ease in transacting shares virtually. The features are as follows:
Accumulated data from leading brokers
List of stock prices in real-time
Technical indicators
Real-time stock fundamental data
Calculation of broker fees as well as profit and loss
2. Stockbit – Stock Investing for Millenials
This app is quite popular among traders. Shares listed on the IDX or Indonesia Stock Exchange can be observed online. So, you can monitor the movement of the stock that is your target or the stock you want to sell.
The stockbit app can be easily downloaded and installed on a smartphone. You can make a transaction to buy and sell shares with the terms and conditions imposed. In addition, there are also tutorials and online forums so that beginners can learn easily. Some of the features that complement this app are:
Stock transactions in collaboration with Sinarmas securities
Online discussions with active participants
Tutorials and how to learn to play stocks
Technical indicators
Real-time stock price list with a professional look
3. RTI Business
RTI business can be the next application option that will help you learn to invest and trade. As a beginner, you can test transactions with a virtual money scheme. With the various features provided, you will feel the user experience as expected. Features provided include:
Proportional to all indonesia stock exchange data
Practice buying and selling with virtual money
Data fundamental real-time
Technical indicators
Indonesian news with voice settings
4. OlympTrade
You may be familiar with this one application because it is often advertised on various social media platforms. This one application allows its users to transact shares globally.
One of the reasons why many choose olymptrade application is the ease of deposit and withdrawal. As for the features, you can enjoy various features, such as:
Stock movements around the world with real-time data
Ease of transaction of buying and selling shares
Local bank support for deposits and withdrawals
News and information about stocks
Virtual money for beginner's transaction exercises
5. MSN Money- Stock Quotes & News
This one application is made by Microsoft and can be obtained for free but the information and data provided is accurate. You can explore information related to stocks. The features provided are:
Accurate financial and business information around the world
Personalize news according to user needs
Real-time stock movement data
Financial tools with easy setup
6. Investing.com: Stocks, Finance, Markets & News
In trading, you need a lot of information. Fortunately, you can now use this one app that is part of investing.com. This application offers real-time movement of stock data so you can do telkom stock analysis.
The information provided applies globally and its users can adjust to a specific region. In addition to checking stock price movements on the IDX or Indonesia Stock Exchange, you can also check stock price movements around the world. Take advantage of some of the features offered by this app, such as:
Real-time global stock data
Economic calendar settings are equipped with important information
Notification of stock movements
News and analysis about global stocks
Information about virtual currency or cryptocurrency data
7. TradingView
Still need application recommendations for daily stock analysis? You can try TradingView. Although the features offered are not much different from other similar applications, it never hurts to try. To make an estimate of the stock price in the future, there is a technical data analysis feature. Here are the features of this app that will be very helpful.
Ease of syncing accounts
Real-time stock chart data
Data support for digital currencies or cryptocurrencies around the world
Technical data
After reading the article on stock analysis, at least you know what to do. You know what to and shouldn't do when you start buying and selling stocks. It can also help avoid the risks that beginners may and experience. Make sure you use the right apps, tools, and ways whenever you have to do a daily stock analysis.
If you want to add information about finance and investments including stocks, then Qoala Blog is the right place. Hopefully this article can help answer all the questions that have been on your mind. May your stock investments make a fantastic profit! Can't wait for tomorrow's stock analysis?