Supply and Demand Analysis
Just like any other market, which actually happened in the capital market is a bidding process between buyers and sellers, while the goods securities are traded in the form of stocks, bonds, etc.
Because the number of buyers and sellers are so many variations and high expectations among investors with each other, then the regulated capital market mechanism using queuing models. Queuing model is based on the logic of the seller and buyer. Seller as the owner of the goods would be trying to get the greatest benefit, while the buyers want to get the goods with the most expensive property.
As mentioned earlier, the number of buyers and sellers are so many expectations that varied with a lot of good offers on the sale price or purchase price that is formed of one share at the same time.
To set the transaction on the offer, then made a model queue with a way to bring the best bid price between the seller and buyer.
Fundamental analysis can basically say that an analysis carried out to obtain the value of a stock by using it as follows:
1. Analysis of the international economy
2. Analysis of the national economy
3. Industry analysis
4. Analysis of company
While Technical Analysis can be considered as an analysis of stock price movements based on stock price movement itself in the past.
Basic assumptions of technical analysis is that the price is determined by the balance between supply and demand. If there is excess supply, then prices will fall and vice versa if there is excess demand, then prices will rise. Fundamental and technical analysis has its own advantages and disadvantages, so ideally we are not only dependent on one type of analysis.
Advantage of fundamentals analysis including:
- Can predict exactly the price (the market is very efficient or semi-efficient).
- Able to provide a reasonable basis in the investment decision.
- Able to give a very clear picture of the company’s operations.
Excellence in technical analysis, among others:
- Time required brief.
- Can accommodate the needs analysis in accordance with the time horizon of each investor.
- Ability to provide psychological picture of the market.
- Having a flexibility power with the time period desired.
By: Rizal Suryo Putro
