To make smarter buy and sell decisions, you can use various fundamental, technical, sentiment and macro-economic tools and factors.
Fundamental research requires you to examine balance sheets, income statements, and cash flow statements.
But digging through financial statements to find out a company’s value is a tedious task.
To begin, you need to create a spreadsheet and build out a discounted cash flow value analysis forecast, which requires you to project revenues, operating costs, and profits.
You then need to calculate a weighted average cost of capital, or WACC, so you can discount back.
If that complicated, it is. So much so, that some Wall Street analysis will spend a week just building out a valuation analysis.
A simpler way is to look at Valuation tab on Financhill. For example this is the AAPL valuation.
Technical analysis is simpler than fundamental analysis but you are still left with a dizzying selection of indicators from which to choose.
Some of the many chart studies and overlays below can be used to make better investing decisions.
You can use a range of chart types, including:
Japanese candlesticks charts
Three Line Break
Elder Impulse System
The most popular chart types are Japanese candlesticks and OHLC.
Once you have selected a chart type, you can overlay technical indicators and chart studies on top of the chart type you prefer.
A list of most popular technical indicators includes:
Chaikin Money Flow
Negative Volume Index
Ease of Movement
Force Of Index
Average True Range
True Strength Index (TSI)
Ulcer Index (UI)
Chande Trend Meter
Slope (Linear Regression)
Price Momentum Oscillator
Pring’s Know Sure Thing
RRG Relative Strength
Pct Price Oscillator
Simple Moving Average
Exponential Moving Average
Detrended Price Oscillator
Commodity Channel Index
Perhaps the most popular technical indicator is the simple moving average.
When share prices rises above the 50-day moving average, a buy signal is triggered. A sell signal is triggered when the 50-day moving average is breached and the share price falls below it.
Some analysis use two moving averages. For example, you figure out what stocks to buy now by scanning for stocks that have a short-term moving average, such as the 20-day simple moving average, crossing below a longer term moving average, such as the 50-day simple moving average.
The selection of sentiment analysis indicators is not as extensive as the extensive selection of technical indicators.
The volatility index, or VIX, is a popular indicator because extremes often signal market turnarounds are on the horizon.
For example, when the volatility index rises above 50 historically, the market has been close to a bottom or at the very least bouncing.
These are times when fear has gripped the markets and most traders find it very hard to buck the trend, be contrarian, and buy top stocks because waves of selling have already taken place.
So, even though it’s a good rule of thumb historically to buy when the VIX rises above 50, it’s still hard to hit the Buy Order in your brokerage account at the time when volatility skyrockets.
Other popular sentiment indicators include the put/call ratio, SKEW and TRIN.
The put/call ratio measures the ratio of put options to call options. The general trend of the market is to rise higher over the long-term, so high put volumes are indicative of fear in the market.
Super high put volumes signal panic and may be contrarian indicators that markets are due to reverse back higher.
The SKEW is an index derived from S&P 500 tail risk. When the SKEW rises above 140, tail risk is especially high and the risk of a stock market crash tends to rise.
The TRIN is another sentiment indicator. The TRIN measures advancing and declining issues and you can view the TRIN here.
Macroeconomic indicators include an old Warren Buffett favorite, the Total Market Capitalization-to-GDP ratio.
A simpler way to get stock ratings is to simply type in a stock symbol in the Financhill search engine.
Whether you are trading one of the FANG stocks, like Apple, Alphabet, or Netflix. Or any other company on your stock watchlist, you can find over 5,000 stocks listed at Financhill.
Once you enter a stock symbol into the search engine, a stock rating will be displayed in the form of a stock score.
When scores are above 50, the stocks are on Buy signals. When scores fall below 50, they are considered on Sell signals.
At the time this article was written, you can see stock rating for Apple, which was listed as a Buy.
The current Apple stock rating is shown here.
Beyond free stock ratings, you can easily view seasonal stocks to buy now.
Seasonality stock charts will display where stocks have historically traded at the same time over recent years.
Some companies that cater to tax filings for example have a history of rising at a certain time of year while others related to swimming pool installations have a history of rising at other times.
Still other stocks in the semiconductor industry have a history of falling at certain times of the year. AMD is a classic example of a company that has a history of dipping at certain times of the year.
Fundamental, technical, sentiment, and economic analysis won’t give you insight that a stock market seasonality chart will give you.
Most technical charts are historic and look backward while seasonal stock charts provide glimpses into where future prices may trade if history repeats.
This futuristic view of where share prices may trend make seasonal stock charts among the best stock charts to view to provide an alternate perspective.
No guarantee of future price action repeating past price history exists but while history doesn’t always repeat, it regularly rhymes.
At Financhill, you can view free stock ratings and seasonal stock trends on almost every stock imaginable.
The 30 Dow Jones Industrial Average stocks are all featured, including:
American Express (AXP)
General Electric (GE)
Goldman Sachs (GS)
United Health (UNH)
Johnson & Johnson (JNJ)
JP Morgan Chase (JPM)
Home Depot (HD)
Coca Cola (KO)
United Technologies (UTX)
Traveler’s Companies (TRV)
Stocks in the S&P 500, NASDAQ, and Russell 2000 are all featured too, so no matter what stock you are looking for, you will almost certainly find stock ratings, seasonal stock charts, valuation analysis, and much more.
>> How To Buy and Sell Options
>> How Are Options Values Calculated?
>> Puts And Calls: Covered And Naked
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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.