Vringo Inc - Redemption Case Study

Khashi Nassiri

Mr. Sit

Economics Stock Market Assignment

VRINGO INC

1. Technical Analysis

a) Technical Analysis is the analysis of past price changes and hoping of predicting changes of price in the future. Technical Analysis will help someone determine whether they would like to invest in a company or not, by looking on the number of people holding that stock, the supply and demand to determine the future trends of that stock. There are many ways to show these, some of them being charts and graphs.

b) Line Chart : A line chart works by graphing different points and connecting them in a line, this is useful for predicting future changes and showing trends. Line charts can show statistics over hours, days, months, and also years. Line charts aren't as specific as other types of graphs, but they still show the closing and opening prices. In the graph below, the line chart shows statistics on a hourly basis. The horizontal (x-axis) line represents the time, in this case every hour, while the vertical (y-axis) line shows the price. The highest and lowest points of this stock is highlighted in orange. As you can see there is a major increase from the lowest point to the highest point over 2 hours, and for someone who does stocks would be a great time to invest in at 3.23.

Candlestick Chart : A candlestick chart displays more information than a line chart. It shows the highest point, lowest point, opening and closing point, as well as lines of curvature to show trends over a period of time. A candle stick usually has 2 lines sticking out on the side of each bar, if the stock is increasing then the lowest bar would represent the opening point, and the top line being the closing point. If the stock is decreasing then the top line shows the opening point and the lowest line shows the closing point. Candlestick charts are shown by 2 colors, either black and white or other colors, in the graph below, if the stock is going down, then it is shown in red, if it is going up it is shown in green.

c) There are not a lot of things that can be determined with a line chart. Using a line chart, you can determine the highest point, the lowest point, and generally tell in which direction the stock is moving over a period of time. In the graph of VRINGO Inc below, you can see that from august till mid September there was barely any increase or decrease in price of the stock, but as it hits October you can see that it rises extremely high, and then goes back down near November. The demand for this stock cause the price of it to go up, and once everyone sold their shares, it made it go back down. The highest price was around $5.90 while the lowest price was at $1.90.

On the other hand, a candlestick graph shows a lot more detail than a line graph, it shows the opening and closing points, as well as the highest and lowest point, AND a line of curvature. Using this you can not only tell if the price of the stock is increasing or decreasing, you can also show about how much it rises and decreases daily, whether the opening point is higher or lower than the closing point, and much more. In this case the blue bars show that the stock has increased, while the red bars show a decrease in price. A candlestick is slightly better for people that do stocks, because generally they believe that if there are a few red candlesticks, the next few days the price is going to rise, so they would invest in that company.

2. Current News / Alerts

* Wednesday's biggest gaining and declining stocks, 08/11/12, http://www.marketwatch.com/story/wednesdays-biggest-gaining-and-declining-stocks-2012-10-03

 This article shows

...