Skip to main content

Posts

Showing posts from December, 2022

52-Week Range

The 52-week range is a data point commonly published by financial news media, that includes the stock's lowest and highest price throughout the last 52 weeks. Investors use this data to estimate the level of risk and variation they might encounter over the course of a year if they decide to purchase a particular stock. Investors can locate a stock's 52-week range in the quote summary that a broker or financial information website provides for the stock. This data can be seen on a pricing chart that displays one year's worth of price data.

2023 Stock Market Forecasts Challenges, But Smart Stock Pickers Could Thrive

The stock market suffered large losses in 2022. Uncertainty surrounds 2023. Due to Fed rate hikes, the Russia-Ukraine war, and recession fears, 2023 is expect to be somewhat a tumultuous trading year. Uncertainty offers opportunity. There's always a bull market on Wall Street. As the market struggles, smart investors can outperform. Most 2023 stock market estimates display a mix of optimism and concerns  and forecast the S&P 500 at 3900 by 2023.  With so much uncertainty, a cautious stance is wise. Long-term investing trends are changing. Investors must monitor sector changes and choose wisely. As tech stocks seek new footing, some analysts anticipate value stocks outperforming growth companies. Other experts foresee strong infrastructure stocks and M&A prospects in 2023. 2023: Market recovery? All major indexes fell the most since the 2008 financial crisis in 2022.  The Dow Jones Industrial Average fell 8.8% due to its underexposure to technology stocks. The Nasdaq composi

Book Value

When calculating book value, businesses offset the asset's depreciation against the cost of carrying the asset on their balance sheets. Therefore, book value can also be viewed as a company's net asset value (NAV), which is determined by subtracting liabilities and intangible assets (such as goodwill and patents) from its total assets. For an initial investment, book value may be gross or net of costs like trading fees, sales taxes, service fees, and so forth. The total common shareholders' equity less the preferred stock is divided by the total number of the company's common shares to arrive at book value per share. Book Valuation Book value is the accounting worth of a company's assets less its liabilities. Book value is the asset's original historical cost recorded in the books. Accounting measurements may keep an asset's book value the same over time, while asset utilization might increase a company's book value. Comparing a company's book value

Don't wait for 2023 to cut your taxes. Do it before 2022 ends

2022 has been a rough year for investors.  Year-to-Date the S&P 500 is down almost 20%, the Nasdaq 100 is down 34%; large caps such as Google (GOOG), Amazon (AMZN) and Tesla (TSLA) lost 41%, 54% and 65% respectively.  That's not a pretty picture. We can all agree on that. But there's a silver lining here.  The IRS permits individuals with red portfolio pages to reduce gains and income using their investment losses.   In fact, investors can take advantage of what is called tax-loss harvesting and lower their 2022 tax bill until the end of the year.  Tax-loss harvesting explained Tax-loss harvesting requires knowledge of capital gains taxation. So, how's capital gain taxed? A capital gain is realized when investors sell a taxable investment for more than they paid for. Profits from investments held for a year or less are taxed at the regular income rate of the individual. Long-term capital gains rates range from 0% to 23.8%, depending on the individual's income. Tax-

Volume

The amount of an asset or security traded during a specified period of time, usually over the course of one day. For example, stock trading volume refers to the total number of shares of a securities traded during the entirety of one trading session (from open to close). Trading volume, as well as fluctuations in volume over time, are key information for technical traders.

Bullish Engulfing

A bullish reversal pattern made of two candles. It can be recognized when a little red candlestick that represents a bearish trend is followed the next day by a large green candlestick. The large green candlestick opens lower than the previous day's finish and closes higher than the previous day's opening, with the body of the latter completely engulfing or overlapping the former. The bullish engulfing is a bullish reversal pattern, especially when there's presence of significant volume increase on the engulfing day.

Standard & Poor's 500 Index

The Standard & Poor's 500 index, also referred as the S&P 500 or S&P 500 index, is a widely used index that measures changes in the state of the stock market. The S&P 500 index measures the performance of 500 of the largest publicly traded corporations in the United States. Because the index also takes into account other factors, it is not a precise list of the top 500 U.S. corporations by market cap. Nonetheless, the S&P 500 index is recognized as one of the finest indicators of the performance of significant American equities, and thus of the stock market as a whole.

Ticker Symbol

A ticker symbol, also called stock symbol, is a particular set of letters assigned to a security for trading reasons. Stocks that are listed on the NYSE are limited to four letters or less. Securities that are listed on Nasdaq typically have four characters, but may have up to five letters. The fifth letter of a five-letter symbol contains company information. The fifth letter can sometimes be used to identify the type of stock or security: A or B stand for NASDAQ stocks' A and B class shares, respectively, while V or Y denote shares represented by American Depository Receipts (ADRs). There is no discernible difference between symbols with two letters, and those with three, four or even five letters because they are simply a shortcut for describing a company's stock.

Breadth Indicators

Technical indicator used to determine the level of participation in price fluctuations of a stock index. Breadth indicators use mathematical algorithms to count the volume of advancing and declining stocks. Breadth indicators can either validate stock index price trends or signal coming price reversals by looking at how many stocks are rising or falling in price and how much volume these stocks are trading. Overview Breadth indicators don't provide trade signals, but rather an index's health. When a breadth indicator and stock index both rise, it indicates high price participation. This suggests the price surge may last. The opposite is true. A decreasing breadth indicator and a falling stock index indicate lower price participation, suggesting a price decline. Divergence between breadth and an index may signal a reversal. Fewer stocks following the index means that the stock index could change direction. Understanding breadth indicator Breadth indicators give traders and inves

Covered Call

A financial transaction that occurs when a call option seller also holds an equivalent quantity of the underlying securities. An investor who has a long position in an asset can then carry out this strategy by writing (selling) call options on that same asset to create an income stream. Since the seller can deliver the shares if the call option buyer decides to exercise, the investor's long position in the asset serves as the cover.

Volatility

Volatility is a statistical measure of the spread of a security's or market index's returns. In most circumstances, a security is riskier the higher its volatility. Volatility is frequently calculated using the standard deviation or variance of returns from the same securities or market index. Volatility in the financial markets is frequently correlated with significant swings in either direction. For instance, a market is considered volatile when it fluctuates by more than 1% over an extended period of time. The volatility of an asset is an important consideration when pricing options contracts.

Acquisition

When a company acquires the majority or all of the shares of another company in order to take over that business, it makes an acquisition. If the acquirer purchases more than 50% of the target company's shares and other assets, the acquirer can make decisions on newly acquired assets and influence company's targets without needing the permission of the other shareholders. Acquisition Different motivations drive company acquisitions. They may pursue scale, diversity, market share, synergy, cost reductions, or specialty offers. Below are other acquisition reasons. Foreign market entry Buying a local company may be the easiest option for a company to join a foreign market. The purchased business will have its own people, brand name, and other intangible assets, helping the acquiring company start off in a new market with a solid platform. Growth Maybe a corporation ran out of physical or logistical resources. If a company is in this position, it's frequently better to purchase

Quote

A quote, also know as price quote, is the most recent price that a buyer and seller agreed upon and at which some portion of the asset was exchanged. It is the most recent price at which the asset is traded. The bid quote is the most recent price and quantity at which a share may be purchased. The bid quote displays the price and quantity at which a present buyer is prepared to buy the shares. The ask price indicates how much a current trader is willing to offer in exchange for their shares.

Two Explosive Day Trades: See How We Traded Them

Today we cover two day trades from our focus list: ACER and CCJD, +35% and +52% respectively. See how we day traded them. Watch this video to get the technicals. Good trading! Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. SharperTrades, LLC is not registered as an investment adviser with any federal or state regulatory agency. This is not an offer to buy or sell stocks, cryptos, forex, futures, options, commodity interests or any other trading securities.

On Balance Volume (OBV)

A technical trading momentum indicator that makes use of volume flow to forecast changes in price. Granville, the OBV creator, invented this indicator to help predict when significant changes in the markets would occur based on changes in volume, believing that volume was the driving force behind market performance. In his book "New Key to Stock Market Profits", he compared OBV's predictions to "a spring being wound tightly." He thought that when volume spikes significantly without a major change in the stock's price, the price will eventually follow, with either a rally to the upside (if the bulls were pressing), or rolling over (if the bears stepped in).

Dollar Cost Averaging (DCA)

A long-term strategy that involves investing the same sum of money over a long period of time, regardless of share price. By employing dollar cost averaging, investors can lower their average cost per share and lessen the effects of volatility on their portfolio. This tactic effectively eliminates the need to try to time the market to buy at the best pricing. By making a fixed investment, investors can buy more shares when the price is low and fewer shares when the price is high. This could lower the average cost of your investments overall.

Zone of Support

Also known as a support level, or simply support, is the level at which the price of an asset experiences stability as it drops, due to the appearance of an increasing number of buyers who are eager to buy at that price. Support levels may be long-lasting or short-lived depending on whether new information surfaces and alters the market's perception of the asset as a whole. Drawing an horizontal line (and at times diagonal lines, known as trend lines) to connect the lows for the time period being considered, allows technical analysts to chart the support levels, and make a more accurate price projection. The counterpart of support is resistance.

Securities and Exchange Commission (SEC)

An independent federal government regulatory body in charge of safeguarding investors, ensuring the fair and orderly operation of the securities markets, and promoting capital formation. The agency was established by the Securities and Exchange Act of 1934 that is in charge of enforcing the legislation regulating the securities market, including the registration and distribution of mutual fund shares. The SEC encourages complete public disclosure, defends investors from dishonest and market-manipulating techniques, and keeps an eye on corporate takeover activities in the country. Additionally, it approves registration documents among underwriting companies. To conduct business, financial services organizations like broker-dealers, advisory firms, and asset managers are required to register with the SEC.

Year To Date (YTD)

Year to date (YTD) refers to the time period from the first day of the current calendar year or fiscal year to the present day. YTD data can be used to compare performance to peers or competitors in the same industry or to analyze business trends over time. Often, the acronym YTD is used in reference to terms such earnings, net pay, and investment returns.

Bitcoin, the next move might be coming soon

Today we take a look at the technicals for Bitcoin.  2022 has been a disastrous year for cryptos.  Today we detected unusual dark pool activities (large block orders) in the Bitcoin Trust Fund GBTC. What can we expect next? Watch this  video  to find and to get the technical insights.  Good trading! Dark pool activities explained When smart money know something, they place large orders in the dark pool exchanges, away from the public eye. By doing so, they are positioning themselves ahead of the crowds, in order to benefit from move that will follow, once the news or report is made public. However, dark pool activities   do not   tell us the direction of the next move. They only tell us that a large order(s) has been placed. Only a breakout (bullish) about a resistance level, or a breakdown (bearish) below a support level can confirm the direction of the next move. Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon relia

Triangle

A triangle is a consolidation pattern that denotes a pause in the current trend. A triangle is represented by two converging trend lines within a narrow price range, resembling a triangular shape. After price moves out of the triangle (breakout/breakdown), and price resumes the previous trend prior to the pause, the triangle is then categorized as a continuation pattern. However, a breakout and hold above the triangle top (bullish), or a breakdown and hold below the triangle bottom (bearish), requires volume confirmation. Regardless of the consolidation pattern from which they emerge (triangles, rectangles, flags, pennants, etc.), increased volume activity is necessary to validate any breakout or breakdown.

Buying On Margin

When an investor purchases an asset using margin, they borrow the remaining funds from a bank or broker. The first payment made to the broker for the asset—for instance, 10% down and 90% financed—is referred to as buying on margin. The marginable securities in the investor's broker account serve as collateral. The entire dollar amount of purchases an investor is capable of making with any available margin capacity is reflected in their brokerage account's buying power. Margin is used by stock short sellers to trade shares. Understanding margin Buying on margin means to borrow money from your broker in order to increase capital investments, and ideally profits. Let's say you invest $10,000 and earn 10%. You will be making $1,000. What if you could have borrowed an additional $10,000 and double your profits? Investors borrow money or buy on margin to multiple their gains. However, while increasing the potential gains,  the technique is dangerous because it also increases your

Zone of Resistance

Also known as a resistance level, or simply resistance, is the level at which the price of an asset experiences pressure as it rises, due to the appearance of an increasing number of sellers who are eager to sell at that price. Resistance levels may be long-lasting or short-lived depending on whether new information surfaces and alters the market's perception of the asset as a whole. Drawing an horizontal line (and at times diagonal lines, known as trend lines) to connect the highs for the time period being considered, allows technical analysts to chart the resistance levels, and make a more accurate price projection. The counterpart of resistance is support.

Short (Short Position)

When an investor believes that the value of a stock will decline in the near future, perhaps over the course of a few days or weeks, they adopt a strategy called a short position or short selling. When engaging in short selling, more commonly than not, investors do not own the shares that they are selling. Instead, they borrows those stock shares from their brokerage house and sell to another investor in the open market. A short seller will benefit from their short position as long as the price of that security will continue to move lower. When they are ready to close their short position, they repurchase those shares. This action is called buy-to-cover. Basically they buy back the same number of shares they were originally selling, giving back to their broker the shares they borrowed and closing their short position. As complicated as it might sound, this is a simple and automated process that takes place as so soon as the trader presses the "buy-to-cover" button on their tr