There are many analyses on the growth patterns of stocks, analyses which include examining the price highs and lows of a stock and certain ratios such as the P/E ratio (“Yates”). However, due to the numerous claims of stock predictions and the volatility of stocks in the market, there is always a degree of uncertainty in how the stock will move in the future. Investors’ confidence is what determines the stock price; however, determining and predicting this behaviour is difficult. The graph below attempts to analyze stock patterns and predict future movement.

It is logical to believe that an increase in the company’s profits will likely increase investor’s confidence and cause greater volume of purchases and drive up the stock price to some degree. A good indicator of such may then be the growth of earnings per share. A change in company’s profits may be due to new innovation or change in technology or consumer beliefs. For example, Blackberry’s constantly falling stock prices are linked to its lack of company growth and profits, attributed mainly to the innovation of its competitors, such as Apple (Alter). However, stock prices are still subject to human behaviour, which can be unpredictable.

 (“Technical Analysis.”)

Works Cited

Alter, Diane.  “Why BlackBerry (Nasdaq: BBRY) Stock Price Keeps Falling.”  Money Morning.  Money MapPress, 24. Sept. 2013.  Web.  1 Nov. 2014. http://moneymorning.com/2013/09/24/why-blackberry-nasdaq-bbry-stock-price-keeps-falling/>.

“Technical Analysis.”  StockCharts.com.  StockCharts.com, n.d.  Web.  1 Nov. 2014.  < http://stockcharts.com/school/doku.php?id=chart_school:overview:technical_analysis>.

Yates, Tristan.  “4 Ways To Predict Market Performance.”  Investopedia.  IAC, n.d.  Web.  1. Nov. 2014. <http://www.investopedia.com/articles/07/mean_reversion_martingale.asp>.