High Media Sentiment Stocks

Using a stock's sentiment as a barometer of how other investors feel about a stock can give you an insight to decide whether it's more likely to trend up or down in the near future.

In this article, you'll discover what stock market sentiment is and how you can incorporate it into your trading and investing strategies.

Understanding Stock Sentiment Analysis

One of the most important things to understand about stock sentiment is that it can be very different from the actual underlying fundamentals of the company. For example, a company might be doing very well but if investors have worries about the future, the stock price might not reflect that.

There are a few different ways to measure stock sentiment. One is to look at the price itself. If the stock price goes up, that generally means that investors are bullish on the stock. If the stock price goes down, that generally means that investors are bearish on the stock.

Another way to measure sentiment analysis stock market tools involves looking at analyst ratings. If many analysts rate the stock as a "buy," that's generally seen as a bullish sign. If a lot of analysts rate a stock as a "sell," that's generally seen as a bearish sign.

Where to Find Data for Sentiment Analysis in Stock Market Predictions

You can find data for stock market sentiment analysis in a number of places.

News Articles

First of all, it's important to consider the source of the article. If it comes from a reputable source, such as a financial news website or publication, the sentiment may be accurate. However, if the article comes from a less reliable source, such as a blog or personal website, the sentiment may not be as accurate.

Finally, it's also important to consider the timing of the article. If the article is published after a positive or negative event has occurred, the sentiment may not be as accurate. For example, if a company releases positive earnings results but the article is published a week later, the sentiment may be less reliable.

Social Media

Social media can be a great way to gauge stock sentiment and sentiment trading. You can use social media to track what people say about a particular stock and to get a feel for how the stock will perform.

To use social media to gauge stock sentiment, start by following the stock you’re interested in on social media. Look for posts about the stock and see what people are saying. If people are generally positive about the stock, it’s a good sign. If people are negative, it may be a sign that the stock is in trouble.

One popular community for gathering sentiment information on stocks is Reddit. This platform has popular communities dedicated purely to investing, such as /r/wallstreetbets. Learn more about wallstreetbets and what it targets.

In addition to following the stock directly, you can also use social media to find analysts and investors who also cover your industry. They can give you insights into the stock and help you gauge sentiment.

Analyst Ratings

When trying to gauge media sentiment, you can use analyst ratings to get a feel for how the media reacts to a particular company or stock, which can help you make investment decisions.

There are a few things you should keep in mind when using analyst ratings to gauge media sentiment.

First, analyst ratings can be biased. Remember that analysts are paid by the companies they cover, so they may be incentivized to give a more positive rating. Second, analyst ratings can be lagging indicators. In other words, by the time an analyst rating comes out, the media sentiment may have already changed.

Stock Market Platforms

Finally, you can use stock market platforms like MarketBeat to quickly perform sentiment analysis on a given stock. When you navigate to a stock's profile page, you can see its sentiment analysis at a glance by viewing the "news sentiment" section.

This tool automatically ranks the sentiment of recent news articles about a given stock, giving you a birds-eye view of how investors feel about it.

We also offer a feature to help you find MarketBeat stock trending in the news, as well as a list of trending Reddit stocks.

How to Do a Sentiment Analysis

Here are the steps of how to do sentiment analysis on a single stock or a basket of stocks.

Step 1: Build a list of stocks and gather data.

In order to build a list of stocks for sentiment analysis, start by identifying the source of the data that you'll use. You can choose from a few different options:

Twitter is a popular choice for sentiment analysis, as it provides a real-time view of what people say about a particular topic. You can use Twitter's search API to track mentions of specific stocks, then use sentiment analysis tools to analyze the tweets.

Another option is to use news articles from a variety of sources. You can use a news aggregator like Google News to track stories about specific stocks and add them to your stock list.

There are also a variety of stock forums on the internet, where people discuss their opinions about various stocks. You can use a forum search engine like BoardReader to find relevant threads and then compile your results.

Before you begin, you can also take a look at our stock lists to get a feel for the different characterizations of stocks out there.

Step 2: Clean and organize the data. 

Here are a few tips on how to clean and organize data for sentiment analysis:

1. Remove any duplicate data. You can do this by keeping only one copy of each record or by deduping the data.
2. Remove any data not relevant to the sentiment analysis. Filtering it by certain criteria can help.
3. Organize the data into a format that the sentiment analysis software can easily process. You can do this by creating a dataframe with the relevant columns and rows.
4. Save the cleaned and organized data. Use a formula easily accessed and used for future sentiment analysis. For example, you can export the data frame to a CSV file.

Step 3: Analyze the data.

Consider using a technique called natural language processing (NLP) to analyze the data. NLP is a way to analyze text data and extract meaning from it. NLP can be used to identify positive or negative sentiments in a text and you can use it to identify keywords and phrases associated with certain stocks.

You can also look at the stock price data itself using technical analysis or fundamental analysis. Technical analysis looks at the past price data of stock to try to predict future price movements. Fundamental analysis looks at the underlying factors that affect a company's stock price, such as earnings, revenue and expenses.

Step 4: Use the data.

Investors can use sentiment data in a few ways.

They can use sentiment data to confirm other investment signals. For example, if a stock shows positive price momentum and the sentiment data is also bullish, this can be a strong confirmation signal that the stock will likely continue moving higher.

Sentiment data can also help identify potential reversals. If a stock moves higher but the sentiment data has started to turn bearish, the stock may be due for a pullback.

Finally, you can also use sentiment data to help set realistic expectations. For example, if a stock moves higher but the sentiment data is relatively muted, this may indicate not a lot of upside potential in the stock.

Real-World Example of How to Use Sentiment Analysis

If you gather tweets using the Twitter API and find that the sentiment has turned negative about a stock, it might then be a good idea to avoid investing in it.

Conversely, if you find that the sentiment has turned positive, it might be a bullish sign.

Sentiment Analysis Help You Make Stock Decisions

Sentiment analysis can be a powerful tool to use alongside other stock investing techniques such as technical and fundamental analysis. However, don't rely upon it exclusively — it works best when paired with other methods.

FAQs

Here's a list of the most frequently asked questions about how to use sentiment analysis in stock investing.