Know the Language of Investment in PSE Part 2

The first part of this series is available in this link: "Know the Language of Investment in PSE Part 1"

13. Blue Chip - is a stock of a mature and well-established company with remarkable earnings. Example of the Philippine Blue Chips are SM, AC and JFC. Majority of the stocks in the PSE index are considered blue chips though there are some blue chips that is not included like LPZ and SMC.

14. Overbought - it means a stock(s) price is pushes up at level above its fundamental or intrinsic value due to irrational exuberance or too much optimism of the market participants.

15. Oversold - the opposite of Overbought, it is a stock which is trading at a dirt-cheap price due to irrationality and short-sightedness of the market like what happen during a stock market crash. This is the best time to buy the stocks.

16. Red, Green, Yellow - this is not the color of our flag but a coding system used in the stock market to indicate movement of stocks compared to its previous trading day closing price. Red means the stock price decreases, Green means it goes up, and Yellow mean sideways or same as previous price.

17. Bullish - a bull is used to represent an optimistic market (prices going up). This is derived from the upward movement of the bull's horn when it attacks.

18. Bearish - a bear is a representation of a panic or negative market. The downward action of the bear's paw when attacking is same with the movement of the bearish market

19. Index - used to track the overall performance of the stock market. It is like an imaginary portfolio with selected stocks and calculated based on its own methodology (each index has different calculation parameters). In the Philippines, the PSEi is the main index.

20. Trading Time -  is the time when market is open and active. PSE's trading time is daily from 9:30 AM to 12:10 PM except Saturdays, Sundays and holidays.

21. Profit Taking - selling stocks which already appreciated in value to lock or ensure profit.

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