News Corporation Share Price Falls - the Case for Fundamental Analysis?

LONDON, July 27, 2011 /PRNewswire/ --

Rebekah Brooks announced her resignation as CEO of News International on Friday. By 15:44 BST the same day, the company's share price had fallen 0.56 per cent, as noted by City Index (http://www.cityindex.co.uk/).

Traders who employ fundamental analysis would have been aware of this development. Fundamental analysis is a style of market research which takes into account news events such as financial results, economic news, weather forecasts and political developments.

This means traders who speculate based solely on the trends and patterns identified in past data (technical analysis) may have been less prepared than their fundamental counterparts for the shift in News International's share price.

Herein lies the disadvantage of technical analysis - it is based only on what has happened in the past, not what is going to happen in the future or even what is happening in the present. However, fundamental spread betting is not flawless either: there are so many factors potentially affecting the markets, you cannot possibly take them all into account.

Fundamental and technical analysis can be used together, combining current events with historical form, though a tight risk management strategy, such as stop losses in financial spread betting, is vital whichever style you opt to use.

Tom Mockridge, formerly of Sky Italia, will replace Ms Brooks as News International CEO. Find out more about market-moving events with daily financial news from City Index at:

http://www.cityindex.co.uk/market-analysis/

Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, CFD trading and, in the UK, spread betting.

We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, mobile trading platforms and a high standard of customer service and support. To open an account, visit http://www.cityindex.co.uk/spread-betting/start-spread-betting.aspx

SOURCE City Index

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