[INVX] P/E band (overlay)

InnovestX 經紀商 已更新   
What is it?
  • The P/E Bollinger Band indicator is a hybrid tool combining fundamental analysis (P/E ratio) with technical analysis (Bollinger Bands).
  • It uses Bollinger Bands around a company's P/E ratio to identify potentially overvalued or undervalued zones.
  • The P/E ratio itself measures a stock's price relative to its earnings per share.
  • The Bollinger Bands, based on standard deviations, create a dynamic upper and lower band around the average P/E ratio.

Why P/E Bollinger Band?
  • Provides a visual representation of a company's relative valuation compared to its historical P/E range.
  • Can help identify areas where the P/E ratio might be deviating significantly from its historical norm.

Who should use it
  • Investors who combine technical and fundamental analysis for a more comprehensive stock evaluation.
  • Value investors seeking to identify potentially undervalued companies.

How to use
  • A P/E value that breaches the upper Bollinger Band suggests potential overvaluation, indicating the stock might be due for a price correction.
  • Conversely, a P/E value that falls below the lower Bollinger Band might signal undervaluation, presenting a potential buying opportunity (considering the company's fundamentals remain sound).
  • Use earnings.standardized (fully diluted EPS) instead of earnings.actual.
  • Hide P/E bands when P/E is negative.