How to Analyze Stock Market Data

by Sam Ashe-Edmunds

Analyzing trends in the stock market, rather than focusing on individual stocks, can help you better manage your portfolio. While there is no sure way to guarantee short-term profits, looking at longer-term data, sector trends and analyst reports can help you take advantage of potential spikes or drops in individual securities or groups of stocks.

1. Divide your portfolio into sectors, such as technology, financial, manufacturing, housing, health care and other groupings, based on the stocks you currently hold, or those in which you’re interested. Include bonds and commodities if you are interested in those.

2. List the major companies in your sectors, whether you own them or not, to see how a particular sector is trending. For example, if you own Citi, put that under your Financials heading, and include Bank of America, JP Morgan, Goldman Sachs and others in which you’re interested.

3. Set up an online trading account that offers a variety of investing tools, including the ability to sort and group your investments and analyze them. Some companies offer personal help from online or phone consultants, as well as articles and white papers from industry analysts.

4. Review the performance of your targeted individual sectors on a regular basis to look for trends and expert analysis on why trends are happening. For example, if you see that all of the major bank stocks are down, look for news about legislation, regulation or other market factors that may be causing this. Use this information to determine if the slide may continue, or if the sector is at or near its low point and whether or not it’s a good time to buy.

5. Follow bond, precious metals and oil prices, which react to market conditions. For example, as markets face downturns, bonds and gold often rise. When the market rises in response to a belief that the economy is growing, oil prices rise in anticipation of increased future demand.

6. Look at pre-market trends, or futures, which can tell you what traders believe will happen during the day. If housing, unemployment, consumer sentiment, manufacturing, quarterly earnings or other reports are due that day, the futures may indicate whether those reports will be favorable or not.

7. Read annual, guidance and quarterly earnings reports to stay abreast of how a company in which you own stock is performing, what steps management is taking to improve the company and any guidance the company gives on future performance. Look for guidance from independent analysts, which can affect the market’s estimation of a stock’s performance.

8. Examining daily data on particular stocks, including opening and closing prices, volume of shares traded, recent average volume, annual low and high prices and the one-year target price.

9. Watch currency rates to see how they may affect companies in which you own stock. If a company you own or are watching relies heavily on exports, a strong dollar can hurt that company’s earnings, since it will cost foreign consumers more money to buy its goods. A company that produces and sells products in the U.S., on the other hand, will face more competition from foreign imports. Companies that import, such as electronic or grocery stores, will benefit from a strong dollar.

Items you will need

  • Annual reports
  • Analysts reports
  • Quarterly earnings reports
  • Online trading account

About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

Photo Credits

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