How to Choose Stock with TOP-DOWN Analysis

How to Choose Stock with TOP-DOWN Analysis

How to Choose Shares with TOP-DOWN Analysis is a method for finding the best stocks through fundamental analysis that is done by analyzing the biggest part first and then going to the smaller part and finally the more specific part is the stock itself.
The biggest part that is meant here is the condition of MACRO ECONOMY which is a condition that can affect the price movements of all stocks listed on the Indonesia Stock Exchange (IDX).Then the smaller part that is meant here is the SECTORAL STOCK condition and the more specific part here is the condition of the MICRO ECONOMY of the company whose shares are sold in the capital market.

 is a fundamental condition of a country that is able to influence the size of the income run by all companies whose shares are traded in the capital market.
 The country’s fundamental conditions referred to here include economic growth, interest rates, and inflation.
For example, regarding the condition of economic growth, a country whose economic conditions are growing rapidly, it can be ascertained that the companies that stand in it must be experiencing very rapid business growth as well. This can be indicated by the increase in the company’s profit growth over time.

Likewise, when the condition of chaotic countries is full of uncertainty, for example a monetary crisis or endless war, it is likely that many companies whose stock prices have fallen because they are fundamentally bankrupt. And in conditions like this what we need to do is wait and see and do not let it enter the market. Wait until there is a buy signal that shows the market is saturated with large-scale sales.

So macroeconomic conditions are very important conditions for us whether as traders or investors and we can use this condition as a signal of the decision to enter or exit the capital market.

To find out the macroeconomic conditions of the country, especially regarding interest rates and inflation rates, we can easily get the data through Bank Indonesia (BI) and the Central Statistics Agency (BPS), all of which can be obtained online.

SHARE SECTORAL is an analysis carried out after seeing the macroeconomic conditions of a country. If it turns out that macroeconomic conditions are really bad and many stock prices are falling then it is a condition that is said to be normal and we as traders / investors do not need to enter the capital market first. Just wait and see ! until a buy signal emerges from the capital market.

And if it turns out that the macroeconomic conditions of a country are fine and even show positive economic growth, what we need to do is look for which business sector has the opportunity to experience rapid growth in the future because not all sectors of growth share simultaneously.

To obtain sectoral stock growth data, I think it is not too difficult to obtain because we can get it for free through a trading platform or subscribe to data from a paid institution.

MICRO ECONOMY is the last step we analyze which stocks have the best growth opportunities that are in the business sector with the most potential to grow their business in the future.
In this section we can analyze from the company’s Vision and Mission, corporate governance, management in it, how the business strategy is carried out primarily to deal with competitors, and no less important is the company’s financial condition displayed in the form of financial statements (Quarter / Annual) .

Corporate corporate actions also greatly affect the company’s fundamental conditions such as the acquisition, merger, right issue, or the sale of corporate bonds.

So we can conclude that how to choose stocks with TOP-DOWN analysis is a way to filter hundreds of shares in the capital market to find stocks that have the best performance or performance starting from MACRO ECONOMIC Analysis, SECTORAL STOCK Analysis, and MICRO ECONOMIC Analysis.

Analysis of MACRO ECONOMY that is able to give us a signal whether this is the time to enter the capital market or exit the capital market, SECTORAL SHARE analysis that allows us to find a business sector that is able to provide huge profits in the future, and an analysis of MICRO ECONOMY that is able to show stock which one has the best performance among other shares in one business sector.

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