Articles by Julia Lee on ArticleSnatch.com

The next test for the sharemarket

Sun, 15 Nov 2009 13:50:00 -0500

Did you know that we're approaching a significant test for the Australian sharemarket? Support and resistance When you view the sharemarket from a technical perspective, there are significant levels that are like tests. If the market passes certain tests, then there's a certain gateway that opens for the sharemarket to approach the next level. And if the market fails the test, then it's a step back to the last level. These tests are called support and resistance. 4800 Facing the Australian sharemarket now is the test of 4800 points for the S&P ASX 200 index. If the sharemarket passes this mark, it will be free to move up to the next level. That would be good news for investors because it would mean that, from a technical perspective, the sharemarket would be free to move higher. On the other hand, if the market fails the test and bounces down off 4800 points, it will go back to the next level. This of course would be bad news for investors because it would mean losses. This test is a short-term test and is likely to determine the market's direction over the next few months. **End Summary** Topics: online trading]]> share trading]]> online share trading]]>]]> About the Author: ]]> Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and online trading for frequent traders and investors

Diamonds in the rough

Sun, 15 Nov 2009 13:39:04 -0500

Often small capitalization stocks are overlooked by the market. This means there are significant opportunities for investors and traders, but also significant risks. Here I'll run through some tips for investing in small cap stocks. Finding diamonds So, you want to find the next Microsoft or the next Cochlear. Sounds great, but it's not as easy as it seems. There are over 1,000 small cap companies listed on the ASX. How do you find the potential diamonds in the dirt when there is not always a lot of information around these companies and certainly not a lot of research available? Research Brokerage houses and analysts tend to report on the top 200 stocks on the Australian market. Beyond that, it's a case of finding a research group that specialises in small caps or to do it yourself. ASX Small Cap Index If you want to invest in a basket of small caps, there is the ASX small cap index. This invests in the top 300 companies which are not also in the top 100 index. What is a small cap? Small cap companies are those with a market capitalisation of less than $300 million on the Australian sharemarket. **End Summary** Topics: online trading]]> share trading]]> online share trading]]>]]> About the Author: ]]> Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and online trading for frequent traders and investors.

Cash is king

Sun, 15 Nov 2009 13:23:29 -0500

When you choose stocks, it's important to know about the business's cash flow. You need to know how to measure it which will help you figure out whether the business is viable. Here's what you should think about in terms of cash being king when it comes to choosing to invest. Heart beat, lifeblood Little attention is usually paid to cash flow by the sharemarket but nevertheless it is one of the most important numbers to keep an eye on. Generally, earnings or net income is the way that the sharemarket keeps score on success and failure. So you can look at it this way: if the earnings of a company is the heart beat of the company, then cash would be the lifeblood of the business. Cash in, cash out Cash flow is about the cash moving in and out of a business. It's about the cash receipts and cash payments. Any business owner would know that if you don't manage cash flow, you can find your business struggling to survive day-to-day. So when it comes to the sharemarket: 1. How do you measure cash? 2. What ratios can help you? and 3. **End Summary** Topics: online trading]]> share trading]]> online share trading]]>]]> About the Author: ]]> Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and online trading for frequent traders and investors.

The September Effect

Sun, 15 Nov 2009 13:07:49 -0500

We've entered the month of September and markets look a little nervous. The September/October period is usually one marked by frequent turbulence. Here I'll run through what to expect. Holidays are over In the Northern hemisphere, September means that traders have come back from holidays and are revaluating the market which sometimes means there can be frequent turbulence: • It was in September last year that Lehman brothers fell apart • September 11 2001 was a huge tragedy in the US and also another negative for the markets • September/October 2002 saw the market at a low due to the recession of that year. So given the frequency of markets having a negative performance in September/October, can you blame traders for getting a little nervous now that September has started? Talked into a correction We've now seen the US market measured by the S&P 500 rise over 50% from the lows in March. For the Australian market, the S&P/ASX 200 has risen more than 40% from the March lows. Traders seem content to talk their way into a correction. **End Summary** Topics: online trading]]> share trading]]> online share trading]]>]]> About the Author: ]]> Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and online trading for frequent traders and investors.

Turn up the volume

Sun, 15 Nov 2009 12:55:25 -0500

When I see high levels of volume for a stock, to me it indicates a possible new era for the stock price. It says that something is happening to that stock. An abnormally high level of volume is like a siren that tells us that something is happening with the stock. We don't know WHAT is happening but we know that SOMETHING is happening. Unusual volume Unusual volume gives us reason to dig a little deeper to find out if the activity is positive – and therefore likely to result in the share price rising – or negative – and likely to result in the share price falling. An indicator Volume is one of the simplest and most undervalued indicators around. Like indicators in general, volume alone does not give the whole picture. It doesn't tell us which direction a market is trading in, but it can act as a warning siren that something is happening with the stock which allows us to investigate further. You will need to use more indicators than just the volume, but it can be a useful sign to let us know that something is happening to the stock price. **End Summary** Topics: online trading]]> share trading]]> online share trading]]>]]> About the Author: ]]> Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and online trading for frequent traders and investors.

Profit in any market

Sun, 15 Nov 2009 12:30:32 -0500

You can make money when markets are going up. You can also make money when markets are falling. And believe it or not, there are ways of making money when the market is moving sideways or doing nothing at all. The catch? You need to have a view on where the market is headed. How can you determine market direction? Here I'll show you my top three trading tools to help give you some ideas. Trading tools I use Now, the way I chose to trade isn't for everyone. I prefer to trade quality companies which are trading at cheap multiples, showing signs on the charts that there is strong demand. I like to look at economic conditions, fundamentals of the stock as well as using technical analysis or charting. So what should you look for? Economic conditions I'm going to start by looking at economic conditions because it is the one thing that many traders overlook. Low interest rates are one of the most beneficial conditions for the sharemarket. It encourages movement from cash to more risky investments. If the cost of borrowing is lower it encourages growth. This impacts valuations because the risk-free rate is lower. **End Summary** Topics: online trading]]> share trading]]> online share trading]]>]]> About the Author: ]]> Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and online trading for frequent traders and investors.

Mythbusters: Busting lies about the sharemarket

Sun, 15 Nov 2009 12:19:15 -0500

Myth 1: If you hold shares for long enough, they will go up 145 out of the top 200 shares have seen losses in the last 52 weeks but just because you hold on to these shares, does not mean that they will recover those losses. In fact, one thing that the last couple of years has magnified is the fact that some of these companies may not be around at all. All good traders understand that it's best to let your profits run and to cut your losses. From 2003 to 2007, investors were spoilt. All you had to do to make money was take a dart, throw it at a dartboard with stock names, buy the stocks and the chances were that you would make money. But talk to someone who bought the market at the top of the 1987 stockmarket boom, then waited through the crash and the next ten years before the sharemarket managed to recover back to the previous highs. Indeed, talk to anyone who invested in ABC Learning Centres, Babcock and Brown or Allco and you'll see that when businesses fail, holding onto the shares hoping for recovery is a futile game. **End Summary** Topics: online trading]]> share trading]]> online share trading]]>]]> About the Author: ]]> Julia Lee is an Equities Analyst for online share trading platform Bell Direct. Julia provides information on share trading and online trading for frequent traders and investors.