The stock market fluctuations are based on the difference between the intrinsic value of a stock and its price at a particular point in time; The real value of the share can change depending on various events and news about the company or its affiliated industry, and with the change in the company’s profitability, the share price also fluctuates. Charpy move or « spike » series of ascending or descending price movements in the market that a relatively large scale and in a short period of time takes place.
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If we want to give you a good example of a negative or declining Sharpe move in the financial markets , we are referring to the Dowjones index , abbreviated as DJIA , which on October 19, 1987, was just 22% in just one day. Decreased. The Dow Jones Industrial Average is a stock market index that shows the value of 30 major US-based companies and how they trade in different stock market cycles. Dow value does not represent the market capitalization of its member companies, but the sum of the price of a share of shares for each component company. This index is given by Charles dow) And its business partner, Edward Jones, in 1896. Spikes – or Sharpe moves – represent a set of stock price information in the stock market. Using the information provided by Sharpe moves, we can understand how the price trend and the stock goes up or down.
Key points of Sharpy movement
Sharp movement is a relatively large and sudden movement – descending or ascending – that occurs in a short period of time.
The occurrence of Sharpe move can help technical analysts in many stock buying decisions. For example, if the trading volume or “volume” decreases or increases, Sharp movement occurs.
Sharp moves can only be made when new market news changes. For example, when a company makes a lot of money and acts above analysts’ expectations.
There are some speculators and speculators in the stock market who, by spreading rumors and false news, try to deceive some shareholders to buy a certain share, and at first pretend to start a Sharpe move, and after a short time, suddenly give up Support for the stock is heavily withdrawn, withdrawing the money they had invested in the stock at the beginning and at low prices and before the advertisement, and the shareholders who entered the stock with the intention of making huge profits and dreaming of Sharp moving upwards. They are faced with long and heavy sales queues because the share does not have a proper intrinsic value and the major shareholders are not willing to increase the false share price and as a result until the share reaches real price levels. They allow it to come down.
How do stock market analysts use Sharpe move?
The concept of spike or sharp movement is very effective in stock market analysis. In fact, the task of technical analysts is to find the price range of a stock in the stock market . Suppose the price of a share in the last 12 months has been between $ 35 and $ 45. In addition to determining the price range, technical analysts are looking for future changes in the price of this stock in the long run.
In the example above, if the price range falls too quickly below $ 30 or above $ 45, this event could be a signal for the technical analyst to buy or sell the stock. Suppose we have a downward move for $ 27. If Sharpe’s move continues to decline, it could be seen as a sign of new news about the company that has changed investors’ perceptions of its stock market. A technical analyst may use this process to sell stocks.
How to detect the sharpness of a stock
There are three factors to consider when diagnosing a Sharpe motion:
- Company News
- Fundamental analysis
- technical analysis
By observing the news of the company in a period of time, you can be well informed about the future of that company and be aware of the profitability of the mentioned symbol in the near future, because the more profitable the symbol you want, the higher its intrinsic value and price. Its shares will also increase, but this does not mean that immediately after hearing a positive news from a company, the Sharp movement of shares will begin.
The second thing that shareholders should pay attention to is the industrial situation in which the company is located; By examining all the risks in the market as well as the general conditions of the country’s economy as well as the company’s activities and reviewing the financial statements of the said symbol in 3-month intervals, it is possible to be well informed of the company’s profitability. You are sure that the mentioned share is doomed to climb, wait for the signals of the share actor.
Each stock usually has its own actor who controls the price according to the real value of the stock, and usually the stock actors control the stock according to technical patterns, and if in your previous studies you have been convinced that the stock in Your support level will follow a certain pattern, then you can hope to make a dream profit from that share.
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