Stock question?

Question

1. Wht do you think may have caused the stock price to deviate?

2. Do you think using trendlne is good for predicting stock performance?

Answer 1

You can find the answers to question #1 in these articles:
Why Stock Prices Fluctuate Daily - 3 Main Reasons Affecting Share Prices
http://ezinearticles.com/?Why-Stock-Prices-Fluctuate-Daily---3-Main-Reasons-Affecting-Share-Prices&id=882958
3 Factors Affecting Share Prices That Most Stock Investors Do Not Know
http://ezinearticles.com/?3-Factors-Affecting-Share-Prices-That-Most-Stock-Investors-Do-Not-Know&id=874287

For question #2, you can predict market behaviour towards the stocks, but not the stock performance. to predict the stock performance, you have to study its business. for that reason, i think these articles might help:
How to Find Good Stocks That Will Survive 2008 Market Crash
http://ezinearticles.com/?How-to-Find-Good-Stocks-That-Will-Survive-2008-Market-Crash&id=880879
How to Pick Good Stocks That Can Make You Rich in The Long Run
http://ezinearticles.com/?How-to-Pick-Good-Stocks-That-Can-Make-You-Rich-in-The-Long-Run&id=864890

Answer 2

1. The three key things to keep in mind about factors that cause stock prices to change are: (1) issues that affect the broad market, (2) issues that affect the industry that the company competes in, and (3) issues that only affect the company, i.e. company-specific issues.

2. Numerous academics studies have shown that over time, a stock price will track it's earnings and free cash flow generating abilities. That is to say, there is a tight relationship over time between valuation and earnings / free cash flow. In the short term, this relationship may not be as tight as the in the long term, respectively.

Answer 3

The previous answer is a great way to predict the past.

Without knowing what future earnings and free cash will be, the method is worthless as a way to make money trading.