Stock Tips By Equity Research Lab

Stock Tips :

What causes of stock prices to changes ?
 Stock prices change every day as a result of market forces. By this we mean that  share prices change because of  supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if  more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.

The most important factor that affects the value of a company is its Earnings are the profit a company makes, and in the long run no company can survive without them. It makes sense when you think about it. If a company that is never makes money, So it isn't going to stay in business. Public companies are required to report their earnings four times a year (once each quarter). Wall Street watches with rabid attention at these times, which are referred to as earnings seasons. The reason behind this is that analysts base their future value of a company on their earnings projection. If a company's results surprise (are better than expected), the price jumps up. If a company's results disappoint (are worse than expected), then the price will fall. 

     

Of course, it's not just earnings that can change the sentiment towards a stock (which, in turn, changes its price). It would be a rather simple world if this were case! During the dotcom bubble, for example, dozens of internet companies rose to have market capitalization in the billions of dollars without ever making the smallest profit. As we all know, these valuations did not hold, and most internet companies saw their values shrink to a fraction of their highs. Still, the fact that prices did move that much demonstrates that there are factors other than current earnings that influence stocks. Investors have developed literally hundreds of these variables, ratios and indicators. Some you may have already heard of, such as the price/earnings ratio, while others are extremely complicated and obscure with names like Chaitin oscillator or moving average convergence divergence.

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