Page 50 - FINAL CFA I SLIDES JUNE 2019 DAY 4
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Session Unit 3:
13. Technical Analysis
Non-Price-Based Indicators, p.324
Investor sentiment is not only reflected in price and volume data but potential emerging
trends could be gleaned from capital flows.
Market sentiment can be “Bullish” when investors expect increasing prices and “bearish”
when they expect decreasing prices. Opinion polls?
Any other means?
Put/call ratio (put volume divided by call volume):
Put options increase in value when the price of an underlying asset decreases, while call
options increase in value if the price of the underlying asset increases.
Ratio is contrarian indicator. Meaning?
Extremely high ratios indicate strongly bearish investor sentiment and possibly an oversold
market, while extremely low ratios indicate strongly bullish sentiment and perhaps an
overbought market.
