supply-demand analysis investment & finance definition

A technical evaluation of securities on the basis of factors affecting the supply of and demand for a particular security or securities in general. Supply-demand analysis is supposed to determine if an imbalance exists or will exist between supply and demand for securities. For example, if the supply of a security is expected to exceed demand, the security should be sold or not purchased because its price can be expected to decline. Supply-demand analysis incorporates information on new stock offerings, government borrowing, contributions to pension funds, mutual fund cash balances, and a number of other similar factors.