Downward earnings revisions continue to be a dominant trend in the recently-concluded September results season. Ratio is also known as ‘Price to Equity Ratio’ or ‘Market to Book Ratio’ and calculated dividing closing stock price by the book value of the stock in the latest quarter. A ratio greater than unity is considered to suggest that stock is overvalued and lesser than unity as undervalued. A low P/B ratio means that the company has tangible assets to support stock whereas a high P/B ratio suggests that investors have high expectations for the company. Stock trading is a difficult thing and one has to follow several instructions as you have mentioned.
If stocks are held by mutual funds, insurance companies and diversified financial institutions it is a indicator of its being a good stock since institutions may have a great say in decision making. RSI measures directional price movements on a 0-100 scale as rate of fall or rise in the price of a stock and depicts the current and historical trends of strength or weakness of a stock based on closing prices for a particular trading period. Hence, buy and sell of a stock may be taken up when a stock rises to cross the overbought level and oversold levels, respectively.
As a general consideration it is suggested by the financial experts to buy a stock after RSI crosses above the oversold line (30) and sell when it crosses below the overbought line (70). Within the banking sector, asset quality of loan portfolios held up much better than market expectations, which should assuage investor worries over the fallout from the China slowdown and low commodity prices.
Bloomberg consensus earnings forecasts for 2016 were however trimmed as analysts scaled back on prospects for NIM expansion. It appears to us that these views were driven by the then declining odds for the Fed’s rate hike in 2015 (1st Oct: 43%; 15th Oct: 30%; now: 74%), which has since reversed course. Within the small-cap space, consumer stocks with China exposure (OSIM and Breadtalk) disappointed as enduser demand fell sharply.
Perhaps unsurprisingly, offshore marine stocks we cover continue to reel under operating-margin pressures, even as news of contract deferrals gathered steam. US interest rates expected to rise in December from a decline in commodity prices in the international market. For these reasons, gold and silver prices in the domestic market is constantly falling.