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Return
on Capital (ROC), Return on Invested Capital (ROIC)
and Return on Equity (ROE):
Measurement and Implications
If there has been a shift in corporate finance and
valuation in recent years, it has been towards giving "excess returns" a
more central role in determining the value of a business.
While early valuation models emphasized the relationship
between growth and value - higher growth firms were
assigned higher values - more recent iterations of
these models have noted that growth unaccompanied by
excess returns creates no value.
 Read
full article |
The
Elliott Wave Principle
In the 1930s, Ralph Nelson Elliott, a corporate accountant by profession, studied
price movements in the financial markets and observed that certain patterns repeat
themselves. He offered proof of his discovery by making astonishingly accurate
stock market forecasts. What appears random and unrelated, Elliott said, will
actually trace out a recognizable pattern once you learn what to look for. Elliott
called his discovery "The Elliott Wave Principle," and its implications were
huge. He had identified the common link that drives the trends in human affairs,
from financial markets to fashion, from politics to popular culture. Read full article |
Stock
Trading: Using Bollinger Bands to Spot Potentially
Big Moves
Bollinger Bands are one of the more widely known and used technical indicators
around. Most charting packages, even the most basic, have them built in. The
Bands are a volatility-based indicator which apply the statistical measure Standard
Deviation to provide a guide as to how a given market or instrument is trading.
There are a great many ways Bollinger Bands can be employed in market analysis,
but this article focuses on how one can apply them to the identification of markets
ready to make a significant directional move. Read
full article |
A
technical charting interpretation of the Donchian's
Four Week Rule/Price Channel
The Four-week Rule is a basic method that may not seem glamorous in the company of Fibonacci Numbers and Japanese Candlesticks - but it is a profitable method that is still used today.
Despite its obvious shortcomings, as a trend-following system, - it works well in up or down trends, but not sideways trends - the Four-week Rule is a tool that should be in every technical analyst's repertoire. It was developed by Richard Donchian in the early 1970s for commodities and futures, and has been successfully applied to stock analysis. Read
full article |
Technical
analysis provides an important tool
Charts aren't the final solution to making smart investment decisions. They don't provide all the answers but they are an important investment tool. If you are a serious investor you need charts as much as a plumber needs a pipe wrench. Sure, he could do his job without the proper tools but could he do it nearly as efficiently and effectively? And, if the tools are readily available, isn't it foolhardy to continue working without them? Read
full article |
Using
Buy & Sell signals & screening stocks
Many investors make investment decisions - or would like to - based on signals
from their favourite technical indicators.The biggest challenge, however, is
finding stocks that are giving the signals that we're looking for.Suppose you
like to trade stocks that have recently exhibited a "bullish MACD crossover" or
a "bullish Price Channel breakout," or some other trading signal. Finding such
stocks has traditionally been a matter of checking a large number of charts based
on analyst reports, broker's recommendations, hot tips, newspaper articles, unusual
volume, etc, etc. Finding stocks has been a matter of luck and persistence, in
most cases. Read full article |
How
to use P/E as a valuation tool
P/E is one of the more important fundamental valuation tools. P/E is a ratio of the stocks price and the stocks earnings per share. To calculate a P/E, take the price of the stock and divide it by it's earning per share. Read
full article |
Four
percent Model
The four percent model is a trend following model which was developed by Ned Davis. The four percent model uses the Value Line Composite Index (KCBT) however, other traders have applied this model to other indexes. The Value Line Composite Index is calculated by Arnold and Bernhard & Co. and is an un-weighted price index of approximately 1700 stocks. Read
full article |
The
Guppy Multiple Moving Average
The Guppy Multiple Moving Average (GMMA) indicator tool is based on the relationships between groups of moving averages. Each group of averages in the GMMA provides insight into the behavior of the two dominant groups in the market - traders and investors. The indicator allows the trader to understand the market relationships shown in the chart and so select the most appropriate trading methodology and the best tools. The GMMA is designed to understand the nature of trend activity on an end of day, or intraday basis. Read
full article |
Point
& Figure charts
Point & Figure (P&F) charts are one of the simplest and clearest ways to determining the best time to buy and sell shares. The P&F system represents one of the oldest approaches to share market trading. This method takes the technical analysts approach while monitoring supply and demand for each share. And the charts are designed for long-term trading so that the time and cost of trading shares is minimal. Read
full article |
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