PICKING STOCKS IN THE MARKETThe analysis of securities

Made by: Imran Almaleh

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INTRODUCTION

About the course

WHY INVEST?

Why the stock market? The stock market & The economy HOW CAN WE USE IT?

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PART 1 agenda:

The 2 types of TRADERS The fundamental analysis The technical analysis The trading cycle The Market moves Trading psychology Basics of Analysis:

The Time-frame The 3 green lights Volume Support & Resistance Trend-lines 4

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THE TYPES OF TRADERS

The sleeping man Not a risk taker Stocks are not his primary concern

The active trader Always alerted Deep analyzer Risk taker

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THE SLEEPING MAN

BUY

SELL

80 SP

profit

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THE ACTIVE TRADER

BUY

SELL

BUY

SELL

110 spPROFIT

65 spPROFIT

175sp overall profit

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THE IMPORTANCE OF FUNDAMENTALS

Get to know YOUR company Filtering stocks using fundamentals

ROA ROE E/P – D/P ratios Market value : Book value

Review report

Why not to use it in DSE? Market efficiency Market depth 8

رمزالشركة AROP UIC NAMA AHT UG ARBS

المبيعات 779.00 840.00 88.00 535.00 941.00 1,366.00األرقام بالملايين

الدخل صافي 137.00 151.00 9.00 48.00 121.00 402.00الملكية حقوق 1,186.00 1,060.00 208.00 334.00 626.00 3,635.00

اجمالي الموجودات 2,734.00 2,443.00 344.00 397.00 1,333.00 41,177.00

التوزيعات النقدية 60.00 111.00 7.00 42.00 131.00 90.00

األسهم عدد 2,000,000.00 1,700,000.00 560,000.00 400,000.00 3,000,000.00 6,360,000.00في السهم سعر

السوق 1,025.00 1,029.00 822.00 1,261.00 372.00 1,041.00

الدفترية القيمةللسهم 593.00 623.53 371.43 835.00 208.67 571.54

SPS 389.50 494.12 157.14 1,337.50 313.67 214.78E/P 68.50 88.82 16.07 120.00 40.33 63.21D/P 30.00 65.29 12.50 105.00 43.67 14.15الربح هامش 17.59% 17.98% 10.23% 8.97% 12.86% 29.43%

ROA 5.01% 6.18% 2.62% 12.09% 9.08% 0.98%ROE 11.55% 14.25% 4.33% 14.37% 19.33% 11.06%

P/E ratio 14.96 11.58 51.15 10.51 9.22 16.47 9

TECHNICAL ANALYSIS

Supply & Demand The main concepts:

The Trend Bull market Side-way market Bear market

The trading cycle

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PRICE MOVES IN TRENDS!

THE TRADING CYCLE

Strong, Smart, and Dumb MONEY The marketing Model

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THE MARKET MOVES

All Actions have Reactions

3 types of movements:1. Main move

Uptrend Downtrend

2. Correction 33% of last move 66% of last move

3. Small moves14

THE PSYCHOLOGY OF TRADING

Selling the Win fast Holding the Lose

GREAD AND FEAR Fear is stronger than Greed

THE EMOTIONAL CYCLE OF THE MARKET

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THE EMOTIONS CYCLE

HOPE

GREED

FEER

PANIC

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THE BASICS OF ANALYSIS

The time frame The 3 Green lights to start The importance of VOLUME The support & resistance Trend lines

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TIME FRAME

Short-term Trading (Daily Trading) Between 5 minutes – 1 day

Mid-term Trading Between 1 Week – 2 Months

Long-term Trading (Investment) Between 6 Months – 2 Years or more

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3 GREEN LIGHTS

The stock market index The industry index The stock index

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TRADING VOLUME

Why observe it? Selling pressure Divergence

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SUPPORT & RESISTANCE

Concept Drawing the lines Converting the Support to Resistance & v.v. The strength of a Line

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THE TREND LINE

Upward trend Downward trend Time frame & the trend lines How to draw a trend-line? Trend break-out

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