So far, in this how to buy the right stocks blog, I only wrote about how to do stocks analysis based on the Technical Analysis (TA) indicators which includes Chart Patterns, Candlestick Patterns, Stochastic, and Volume. It is mostly because I am a daily trader and sometimes, a swing trader. Yeah, it is natural the daily and swing traders only use the Technical Analysis on their analysis. In other words, it is the Technical Analysis (TA) which is the main weapon for daily trader and swing trader to do analysis on stocks.
However, as additional tools, the other stocks analysis method are also needed sometimes (which includes Macro Analysis, Sectoral Analysis, and Fundamental Analysis). So, in this article, I am sharing four of Analysis types that can help us to choose the right stocks to buy from stocks market.
First Stocks Analysis Type: Macro Analysis
Macro Analysis is mostly about economy related government policies and national economy conditions in general. As you may know, the government policies can affect the certain country until world economy. Therefore it is worthy to analyze what effects of government policies to economy generally and stocks market specially. The Macro Analysis includes national income stability, national income per capita, national economic growth, inflation level, interest rate, and political situation. Based on this macro analysis information we can do the stocks analysis — whether it is the right time to buy the stocks from certain country’s stocks market.
Second Stocks Analysis Type: Sectoral Analysis
Sectoral Analysis is mostly about industrial performance and condition in certain range time. The Sectoral Analysis is utilized to know whether the certain industrial type is in the early stage, growth stage, acceleration stage, and maturity stage. Beside these four, Sectoral Analysis can also tells performance degradation possibility and how it affects the company’s profit. This sectoral analysis utilizes two analysis model which are Industrial Life Cycle Model and Profit Life Cycle Model. Sectoral Analysis information is a big help on stocks analysis for sure. It is a big help to find which industrial sector will offer the best profit from stocks market.
Third Stocks Analysis Type: Fundamental Analysis (FA)
Fundamental Analysis (FA) is an analysis tool to know a company’s condition in complete. Fundamental Analysis includes the company’s product analysis, marketing analysis, management performance, and financial statements. The main tool to do this Fundamental Analysis is the company’s financial statements/reports. However it does not preclude to use the other sources. Fundamental Analysis information is a big help to do stocks analysis — to pick the best stocks form the best company.
Fourth Stocks Analysis Type:Technical Analysis (TA)
Technical Analysis (TA) is an analysis tool which mostly about the market price condition and how the price is created. Technical Analysis (TA) tells us how the market price is created by supply (sellers) and demand (buyers). In Technical Analysis (TA), we no need to know what the reasons in behind the supply and demand. We can use the Technical Analysis (TA) to know the current market price condition and predict what will the price in the next trading range. Technical Analysis information is a big help in stocks analysis since can tell us the right time to buy or to sell the stocks.
Having a profitable stocks trading everyone!