SENTIMENT ANALYZER EXPLAINED

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WHAT IS A SENTIMENT ANALYZER?

Stock Market are often sentiment driven, which
leads an individual to make an effort to understand
the market sentiment or sentiment of a particular
equity or commodity. “Market sentiment refers to
the overall attitude of investors toward a particular
security or financial market. It is the feeling or tone
of a market, or its crowd psychology, as revealed
through the activity and price movement of the
securities traded in that market. In broad terms,
rising prices indicate bullish market sentiment,
while falling prices indicate bearish market
sentiment, while a neutral sentiment would
indicate that the market is moving in a sidways
trend. Hence the price action could be categorized
as following:
i) Bullish
ii) Bearish
iii) Neutral

Sentiment analysis is the process of determining
whether a piece of writing is positive, negative or
neutral. A sentiment analyzer combines price
actions and machine learning techniques to
assign weighted sentiment scores to the scripts.
We have divided our stock’s sentiment into two
major sub categorizes comprising of short-term
horizon and long-term horizon.

BASIC

Our Sentiment Analysis follows a straight forward methodology

i) Calculate the short term moving average price
ii) Calculate the long term moving average price
iii) Determine whether the current price is operating above or below the moving
averages.

In order to understand our methods, one needs to first be familiar with the following terms.
LONG TERM can be defined as a phenomenon that is occuring over a lengthy period of time. Long Term expression cannot be bounded by certain length as it is advisable to use long-term on a comparative basis. Our current scale readings can be interpreted as 19% of the stocks have a bullish long sentiment whereas 81% of the stocks have a bearish long term sentiment.

SHORT TERM can be defined as an event that is occuring over a time on a shorter frame. Our reader should keep in mind that short term expression can not be restricted by a time frame but be used on comparative terms. In a shorter horizon our current scale reading can be interpreted as 24% of the stocks are in as short-term bullish sentiment whereas 76% of the stocks are in a short-term bearish sentiment. The overall score indicates the market sentiment as the current score depicts that 21.5% stocks are in their bull momentum. 

Moving Averages are used by an investor to gauge market sentiments. Moving Average is a simple mathematic too that uses a succession of averages derived from successive segments (typically of constant size and overlapping) of a series of values. A moving average helps to cut down the amount of
“noise” on a pirce chart. Many Analysts believe that the moving average direction can help them comprehend the current price movement or trend. If the moving average line has a positive angle, it’s believed that the market sentiment is positive. 

The overall score is obtained by computing arithmetic mean of both short and long term sentiment as we can observe that the score depicted on the indicator is 43.5, showcasing that 43.5% of the stocks are under a bullish sentiment

Moving Average are used by an investor to gauge market sentiments. Moving Average is a simple mathematic tool that uses a succession of averages derived from successive segments (typically of constant size and overlapping) of a series of values. A moving average helps to cut down the amount of “noise” on a price chart. Many Analysts believe that the moving average direction can help them comprehend the current price movement or trend. If the moving average line has a positive angle, it’s
believed that the market sentiment is positive; On the other hand, if the moving average angle is negative than the price suggest suggest that the market consensus is negative. A moving average can be calculated in different ways. A five-day simple moving average (SMA) adds up the five most recent daily closing prices and divides it by five to create a new average each day. Each average is connected to the next, creating the singular flowing line. Another popular type of moving average is the exponential
moving average (EMA). The calculation is more complex, as it applies more weighting to the most recent prices. If you plot a 50-day SMA and a 50-day EMA on the same chart, you’ll notice that the EMA reacts more quickly to price changes than the SMA does, due to the additional weighting on recent price data. It is suggested that, 200 days moving average lines can be used as key dividing line between long term bearish and bullish sentiment, and hence EKGC Research applying this parameter to filter out stock, out of EKGC universe, which are trading above 200 DMA which depicts. A moving average simplifies price
data by smoothing it out and creating one flowing line. This makes seeing the trend easier. Exponential moving averages react quicker to price changes than simple moving averages. In some cases, this may be good, and in others, it may cause false signals. signals. Moving averages with a shorter look back period (20 days, for example) will also respond quicker to price changes than an average with a longer look back period (200 days). Moving average lengths can take on any number. However, Common
moving average lengths vary from 10, 20, 50, 100 and 200. The time frame or length of the moving average is commonly called “look back period”. A crossover is one of the key strategies used by analyst all over the globe to analyze market sentiment. When a shorter term moving average crosses above a longer-term moving average a buy opportunity is created. Meanwhile Meanwhile when a shorter term moving average crosses below the longer-term MA, it’s a sell signal. It is suggested that, 200 days moving average lines can be used as key dividing line between long term bearish and bullish sentiment, and hence EKGC Research applying this parameter to filter out stock, out of EKGC universe, which are trading above 200 DMA which depicts. A moving average simplifies price data by smoothing it out and creating one flowing line. This makes seeing the trend easier. Exponential moving averages react quicker to price changes than simple moving averages. In some cases, this may be good, and in others, it may cause false signals. Moving averages with a shorter look back period (20 days, for example) will also respond quicker to price changes than an average with a longer look back period (200 days).

EKGC is an advisory firm that strives for excellence, and in our pursuit for excellence we try our best to keep our clients ahead in the financial sphere. In order to do so we have come up with a sentiment analyzer that allows our customers to assess the current market condition. This allows our clients to take well informed discission and understand the market situation. Our veteran research team has come-up with an indicator that assists an individual to comprehend the current market dynamics and implement trading ideas with due diligence.
Sentiment Analyzer is a simple parameter that helps one to gauge public opinion through means of price action. Stock sentiment alone cannot always predict changes in share prices, but when combined with tools such as technical analysis, Fundamental analysis and economic analysis a better understanding can be gained to determine possible scenarios.

GENERAL DISCLAIMER

General: The information in our report is assembled from sources believed to be reliable. While all reasonable care has been taken to ensure that the facts contained are accurate and the conjecture, sentiments, and assumptions contained thus are reasonable and sensible. EK Global or its affiliates make no representations or warranties whatsoever to the completeness or accuracy of the material provided, except with respect to any disclosures relative to EK Global and the Research Analyst’s involvement with the issuer that is the subject of the material. Historical trends and performances don’t guarantee future results. Any venture implies a level of risk, including the possibility of all-out misfortune. There can be no assurance that any speculation procedure examined in the above report will accomplish its venture targets. EK Global nor any of its respective directors, officers or employees, shall be in any way responsible for the contents hereof, apart from the liabilities and responsibilities that may be imposed on them by the relevant regulatory authority in the jurisdiction in question, or the regulatory regime thereunder. Opinions, forecasts, or projections contained in this material represent EK Global’s current opinions or judgment as of the date of the material only and are therefore subject to change without prior notice. Periodic updates might be given on organizations/businesses dependent on organization explicit turns of events or declarations, economic situations, or some other publicly accessible data. There can be no confirmation that future outcomes or occasions will be predictable with any such suppositions, conjectures, or projections, which address just a single conceivable result. . Furthermore, such opinions, forecasts, or projections are subject to certain risks, uncertainties, and assumptions that have not been verified, and future actual results or events could differ materially. The value of, or income from, any investments referred to in this material may fluctuate and/or be affected by changes in exchange rates. This publication is only for informational purposes and is not intended to be a recommendation, offer, or solicitation for the purchase or sale of any financial instrument.
EK Global is based in Karachi and is a registered security advisery(SA) with the Security and Exchange Commission of Pakistan(SECP). Our expertise lies in high growth stock selection, active portfolio allocations, continuous monitoring, and rebalancing within defined risk thresholds, with the help of technologies, algorithms, and expert human professionals

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