http://www.candlestickforums.com/ American Depository Receipts American Depository Receipts America depository receipts (ADR fs) represent ownership of shares of a non-United States company that trades in United States financial markets. Many foreign stocks trade on US stock exchanges as level II or III ADR fs. Through the purchase of American Depository Receipts US investors can buy shares of promising foreign companies without needing to change to foreign currencies, collect dividends in foreign currencies, and deal with a stock broker in a foreign language. Owners of American Depository Receipts receive dividends in US dollars, buy and sell just like buying stock and selling stock of American companies. In addition traders can follow these foreign stocks with technical analysis tools such as Candlestick analysis just like they do with US stocks.

1. American Depository
Receipts
By
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2. America depository receipts (ADR fs)
represent ownership of shares of a non-
United States company that trades in
United States financial markets.
Many foreign stocks trade on US stock
exchanges as level II or III ADR fs.

3. Through the purchase of American
Depository Receipts US investors can
buy shares of promising foreign
companies without needing to change
to foreign currencies, collect dividends in
foreign currencies, and deal with a stock
broker in a foreign language.

4. Owners of American Depository
Receipts receive dividends in US
dollars, buy and sell just like buying
stock and selling stock of American
companies. In additiontraders can
follow these foreign stocks
with technical analysis tools such
as Candlestick analysis just like they
do with US stocks.

5. American Depository Receipts are
issued by one of four US depository
banks, the Bank of New York Mellon,
Citibank, Deutsche Bank or
JPMorgan. ADR fs represent a share,
multiple shares, or a part of a share
of the foreign stock in question.

6. The owner of an American
Depository Receipt can, in fact,
request and receive the foreign
stock that the ADR represents
but that really defeats the
purpose and ease of trading an
ADR.

7. The American Depository Receipt tracks the price
of the foreign stock in its home market,
adjusting for currency rate variation. As an ADR
represents a foreign stock both fundamental
analysis of the foreign company and technical
analysis of market pricing in the USA are
valuable in trading these replacements for
foreign stocks.

8. It is level II American depository
receipts that are typically traded on
US stock exchanges. Unsponsored
shares and level I ADR fs are traded
over the counter. This is a
convenient way for many foreign
companies to have their stocks
traded in the USA.

9. However, foreign stocks below
the level II cutoff have minimal
reporting requirements and the
trader or investor dealing in
these has many of the same
problems as with penny stocks
investing on the OTC market.

10. Level II ADR fs must meet SEC
filing requirements and are
delisted from stock exchanges if
they fail to do so. Level III
ADR•fs are typically from
companies that are raising
capital in the USA by selling
stock.

11. They are subject to much more strict
reporting requirements, similar to
American companies. Thus those
interested in trading ADR fs or interested
in long term investingin foreign
companies will be able to trade level II
and III American Depository Receipts on
a US stock exchange.

12. Trading stocks through the use of
American Depository Receipts allows US
citizens access to promising means of
picking offshore investments. Level II and
III ADR fs provide sufficient information
for investors and traders to do
adequate fundamental and technical
analysis of these stocks.

13. It will be possible to not only
determine a foreign stock
fs margin of safety and intrinsic
stock value but to be able to
follow profitably with Candlestick
patterns as well.

14. Application ofCandlestick trading
tactics is possible with ADR fs as
well as other US based stocks
trading on US exchanges.