P2 Quiz Flashcards
• involves examining the overall economic and market trends within specific industries
• identify opportunities and risks associated with investing sector
• analysis use various tools and techniques, such as Porter’s Five forces
INDUSTRY ANALYSIS
• evaluating securities based on historical price and volume data, Typically presented on charts.
• primary goal of technical analysis is to predict future price movements
• use various tools, including trendlines, support and resistance level
TECHNICAL ANALYSIS
The overall economic growth of a country or region has a direct impact on most industries.
Economic Conditions
•GDP Growth
• Changes in interest rates affect borrowing costs for businesses and consumers, influencing investment decisions, and consumer spending.
Economic Conditions
•Interest Rates
Inflation rates can impact the purchasing power of consumers and affect production costs.
Economic Conditions
Inflation
• Industries that embrace technological advancements tend to be more competitive and efficient.
Technological Advancement
Innovation
The adoption of automation and artificial intelligence can impact industries by changing the nature of work, reducing labor costs, and improving efficiency.
Automation
Changes in government policies and regulations can have a profound impact on industries.
Government Policies
Industries are often subject to various compliance standards and regulations.
Compliance Requirement
Shifting demographics, such as population growth, aging populations, and changing consumer preferences, can affect the demand for certain products and
Demographics
The confidence of consumers in the economy can influence their spending behavior.
Consumer Confidence
Events such as financial crises, global recessions, or geopolitical tensions can have far-reaching impacts on industries worldwide.
Global Economic Events
Changes in trade policies, tariffs, and international relations can affect industries that rely on global supply chains and markets.
Trade Relations
Increasing awareness of environmental issues can lead to changes in consumer preferences and regulatory requirements,
Sustainability and Environmental Regulations
Changing societal attitudes and values can influence consumer preferences and demand for certain products and services.
Social Trends
Price charts help traders identify trends in the market. Trends can be upward (bullish), downward (bearish), or sideways (neutral).
Identification of Trends
Price charts allow traders to identify key support and resistance levels. Support levels are where the price tends to stop falling, while resistance levels are where it tends to stop rising.
Support and Resistance Level
Price charts enable the identification of various patterns, such as head and shoulders, triangles, flags, and more.
Pattern Recognition
Different types of charts (e.g., line charts, bar charts, candlestick charts) can represent price movements over various timeframes (e.g., minutes, hours, days, months).
Timeframe Analysis
Price charts help traders gauge market volatility by observing the amplitude of price movements.
Volatility Assessment
Traders use price charts to make informed decisions about when to enter or exit a trade.
Decision-Making
By analyzing historical price movements, traders, can assess the potential risks associated with a trade.
Risk Management
Investors often use fundamental analysis to assess the intrinsic value of an asset.
Confirmation and Fundamental Analysis
