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Flashcards in Supply/demand Price Action Deck (12):

You'll hear about the influence of earnings on stock prices or the economy or the credit market. While all these factors do indeed figure into price changes, the reality is that they have a little direct impact on prices. But these and other factors do change the balance of ________ and ____________, which is integral.

supply and demand


Stock prices are primarily a function of supply and demand. although other influences, such as____________ and _____________, might affect the desirability of owning or selling a particular stock it is primarily supply and demand which determines price action.

earnings and the economy


If a company reports surprisingly low earnings, demand for its stock might ____________.



as a Stock price drops, the balance between buyers and sellers is changed. Buyers will begin ____________________________and many motivated sellers will ________________.

demanding discounts off the existing price accommodate them


When there are more sellers than there are buyers,......

this creates more supply than demand so the price falls.


At some point, a stock's price might drop to a level where buyers find it attractive, or some other factor will change the dynamic. As more buyers move into the market. What is the effect on supply, demand, and price.

demand grows faster than supply and the price correspondingly goes up.


Sometimes supply and demand find a balance—a price that buyers accept and that sellers accommodate. Prices will bounce up and down when supply and demand are roughly equal, but they'll _____________

do it in a narrow price range.


If demand for a stock exceeds the supply, its price will_________, but only to a point where buyers suspect that demand is waning. At that point, __________________.



holders of the stock will begin selling. Some might have ridden the price up and they believe a reversal is coming so they take their profits and sell.


For whatever reason, the price begins to fall as more owners sell. What’s the effect on supply and demand? What do holders of the stock do?

There's now more supply than there is demand. The holder of the stock lowers the price to entice buyers.


As the price of a Stock falls, it will reach a level that _____________. As buyers acquire shares, the stock’s price will rise because sellers must ____________.

buyers find attractive. be enticed to let go of their shares.


The dynamic between supply and demand is the most important truth investors should learn about stock prices before they jump in. Although investors might want to assign a value to a stock, it's ultimately________________________ that sets the price.

the market and the give and takes between supply and demand that sets the price


to help lower the potential risk of the trade when using a hammer signal, one could wait for a correction to within the hammer’s lower shadow By _______________.

using the hammer’s lows as a potential purchase area, we have bought closer to the stop out area.