Technical Analysis

Investors and traders always are looking for an edge in forecasting stock prices to improve their trading results.When investment professionals as a group make their decisions,they often analyze fundamental information such as economics,politics and demographics.They look back to the past to forecast what may happen in future.Investors and speculators react the same way to the same types of events again and again.It means they are employing technical analysis of the markets.This discipline relies on generous amount of historical price data,readily available in computer applications.

   The biggest advantage of using a historical database in making trading decisions is that it gives the analyst perspective.A sharp price increase in one stock may be taken as a bullish sign until it is viewed as part of a longer chart that has been declining for the past six months.A chart is nothing but making patterns of price movements over time.

   By plotting the closing prices of stocks each day,you can get the basic chart of that stock and you will come to know in which direction the stock price is heading.
Below is the one year chart of Apple Inc by depicting a daily closing price.

Stock charts come in many flavors.Some prominent ones include point and figure chart,candlestick chart and the ever-popular bar chart.The bar chart is the main market analysis tool in the western world and a key component of technical analysis worldwide.Bar charts are easy to create,interpret and maintain.Each individual bar use daily open,high,low and close price.They are plotted together in a vertical line each day as shown below.Overtime,the bars rise and fall to form the chart patterns and we will see in detail.

Critical part of fundamental analysis-Company Earnings

   Fundamental analysis include the general economic and market conditions that impact a stock,as well as the financial information about a company's activities and its financial successes and failures.Taking the time to analyze the fundamentals of a stock puts you one step ahead of the trading crowd.

  The first step you take in conducting fundamental analysis is selecting an industry or business sector that interests you for possible stock selection.Regardless how you start,you need to narrow down your list of companies you want to compare in similar sectors,so you can find the best opportunity.Using fundamental analysis,you can determine how a stock's price compares with those of similar companies based on earnings growth and other key factors including business condition.Earnings and earnings growth are key factors that is to be considered as a part of fundamental analysis.Whether a company is meeting its own projections and analysts expectations is the most important clue about how a company is doing and how the stock market will react to its periodic reports.If the company fails to meet expectation,the market will likely to punish the stock by driving the price down and vice versa.

  So keeping an eye on earnings report is the most important step you take to get an idea of how the company is performing and so you will know when to enter and exit the stock

Check this site for scheduled earnings report calender
 http://biz.yahoo.com/research/earncal/today.html