Van Ecker Couder & Associates- HOW TO PREDICT FUTURE PRICE OF STOCKS?

Predict Future Price of Stocks

Stock prices are highly violated and can be affected by the company's performance as well as many other factors. To make a lot of money in the stock market, you should learn how to predict future stock prices. Stock predictions can be based on the following methods:

How to Predict Future Price of Stocks?

Use price earnings (P/E) ratio and predicted earnings per share to predict the future price of stocks. If you have the predicted future earnings per share than you can use the P/E ratio to predict future prices because a stock will tend to trade within a certain P/E range.

FOR EXAMPLE:

Assume that the share price of Company XYZ is $20. The earnings per share (EPS) of the stock for the last 12 months is $2. Based on the formula (Price Earnings Ratio= Market price per share/ Earnings per share), the P/E ratio of the stocks XYZ will be 2o/2=10.

Now, we assume that the EPS in the future will be $3.00. Also assume that P/E ratio will remain the same at 10. Then, the prices of the share will be: 3*10=$30. This will give you an indication whether the stock of Company XYZ is a good buy or not. However, investors should be aware that this is not the sole criteria for prices going up and down.

Find reliable market related news: Following the latest news. You will be able to predict whether it will have a positive or negative impact on the share prices. Most of the times, stock price will go up when good news is announced.

Study the stock chart patterns of a company to analyze and forecast future price movements.

Observe the volume growth: Increasing volume is a sign of positive growth in the stock due to some positive news, and this implies a rise in its value in the future.

You should be able to predict the earnings of a company. The growth of a company's earnings is the most important factor to consider when analyzing a company. Good financial results will increase investor confidence and this implies an increase in trading volume and price.