Fundamental and technical analysis.
Carry out fundamental analysis and technical analysis and reflect on finance lab simulation and trading.
Section A: Fundamental Analysis (indicative word count: 1500)
Investment analysts often do not agree on the intrinsic value of a company’s stock. Select a stock, do research online and answer the following questions based on fundamental analysis of the company, its sector, and the economy.
- What are the arguments in favour of higher share price for your chosen company’s stock?
- What are the arguments for a bearish outlook?
- Do you think your chosen company’s stock is currently overvalued, fairly valued, or undervalued?Explain.
- Please open a free seekingalpha user account (https://seekingalpha.com/). No need for subscription.
- Read recent articles about your chosen company and summarize arguments for both bullish (point a) and bearish (point b) predictions for the future performance of your chosen stock.
- For point c, carry out SWOT analysis that include the analysis of the company, its sector and the economy and make your own judgement on whether its stock is currently overpriced, underpriced or fairly priced. Please make good use of trailing P/E ratio and forward P/E ratio. (Teaching slides for session fourteen, fifteen, sixteen, and seventeen)
Section B: Technical Analysis (indicative word count: 500)
Please choose a financial security/asset and make your prediction of its future price movement using technical analysis tools/techniques that are available to you, including price actions, candlestick analysis, chart patterns, moving averages and indicators.
- Please carry out technical analysis on a chart (e.g. draw support/resistance lines, indicate breakout/signals/divergences etc on the chart) to make your price forecast.
- Please provide descriptions/explanations of trading signals identified and make price prediction based on your technical analysis result.
- You can choose your own stock for this task. Alternative, you can analyse the chart below.