chapter 13 part 2 Flashcards
what is the dividend discount model?
relates company’s current stock price against all future dividends
What is the price/earnings ratio? P/E
it is a way of comparing companies value
what is the most common reversal pattern?
The head and shoulders pattern
what is a continuation pattern?
sideways movement o price. flag
what are the two main categories of quantitative analysis?
Moving averages and oscillators
what is a moving average?
it smooths out price fluctuations on the chart
what is an oscillator and when is it used?
they usually give a value of 1 to 100. MACD is a moving average oscillator. they are used when the stock has no definitive trend.
what is a sentiment indicator?
show investor expectations. used by contrarian investors.
What is cycle analysis?
Indicators used to peaks and troughs of market cycles.
Elliot wave theory compares cycles in nature with stock market cycles to predict changes
what are volume indicators used for?
to confirm other indicators. when theirs a bull market and prices rise. volume should rise also.
what is a breadth indicator?
Shows how many stocks are taking part in an overall market trend.
what is the most popular breadth indicator?
the advance/decline line
