P/E ratio compares a company's stock price with its earnings per share, providing insight into investor perception and market sentiment.
Calculating P/E ratio involves dividing the current stock price by the company's earnings per share (EPS).
Different types of P/E ratios like trailing and forward help in assessing past performance and future earnings, aiding investors in comparing valuations and identifying trends across industries.
Capitulation happens when investors lose hope in the market and sell their investments at low prices, often during tough times like a financial crisis.
Technical analysis, like using candlestick charts, helps identify capitulation patterns that signal potential major changes in price trends.
Capitulation can present opportunities for profit, depending on whether an investor is in a long or short position - it's neither inherently good nor bad, but a strategic move.