Macroeconomic Variables Investment in Capital Market
Jurnal Administrasi Bisnis JAB|Vol. 13 No. 1 Agustus 2014| administrasibisnis.studentjournal.ub.ac.id
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The second stage is industry analysis. The importance of industry analysis is
that industry analysis determines which industry will prosper and which industry
will suffer on a global basis within countries Reilly and Brown, 2006:362.
It is difficult for an industry to perform well when the macroeconomic is ailing,
and it is unusual for a firm in a troubled industry to perform well. Also industry
analysis is an important step for the investors, because that analysis is able to
help investors to identify the investment chances in industry Bodie, et al,
2009:566; and Tandelilin, 2010:352.
The last stage is firm analysis. Firm analysis concerns about how to choose a
company in a chosen industry in order to obtain good return or how to find the best
stock of company in a chosen industry that can give good return to investors.
Firm analysis is used to know which one of the stocks who has undervalued
market value is lesser than intrinsic value or overvalued market value is
greater than intrinsic value. If the stock is undervalued then the stock is good to
be bought, and if the stock is overvalued then the stock is good to be sold
Tandelilin, 2010:363
2. Technical Analysis
Technical analysis is a technique to predict the direction of stock price
movement, another
stock market
indicator based on the historical market data such as price information and
volume Tandelilin, 2010:392. Technical analysis involves the examination of past
market
data Reilly
and Brown,
2006:583. Another
definition of
technical analysis is technical analysis attempts
to exploit
recurring and
predictable patterns in stock prices to generate
superior investment
performance Bodie, et al 2009:395.