Stock Analysis

One of the best ways for achieving your financial goals is to invest in the sharemarket. Without saving and investing, we cannot face any financial emergency nor meet our education, medical, and family needs. There are many products in the stock market, but let's learn more about equity investing. Before you invest in stocks, it is important to use the right stock picking strategies. A stock analysis will give you a clear picture of the company's financial situation, growth potential, and other important information that will assist in choosing the right stock.

How to analyze a stock before you invest:

Only after conducting thorough research on the company, should we invest in its shares. There are two ways to analyze a stock: fundamental and technical analysis. Let's first look at technical analysis of stock trends. The past price movements are used to predict the future price of the stock. To predict the stock's future price, price charts are created based on a specific time period. Different time charts are possible, such as a daily chart, hourly, or 15-minute chart. Stock market technical analysis is not based on any assumptions.

Everything is discounted in the markets:

This means that all information about the stock, investors' sentiment, inflation, and other factors is already embedded in its price.

Prices follow trends:

The trend dictates that the stock's price will move in the same direction.

History repeats itself

Technical analysis predicts price movements based on chart patterns. It is believed that market participants react the same to similar events in the future.

How to analyze a stock intraday:

Intraday trading requires a lot of knowledge and strategy. Let's have a closer look at them.

Liquid stocks:

When buying stock for intraday trading, liquidity is the most important factor to consider. Liquid stocks should be purchased where the price does not change, even if you purchase large volumes. These stocks can be sold quickly and converted into cash.

Be careful not to be greedy

Day traders should be able to clearly identify when to enter and exit stocks. You must exit the stock once you have made profits. Intraday trading is all about timing.

Don't trade just based on rumors:

Only trade stocks that are in a strong trend. Trader's main objective is to minimize losses while maximizing profits. You must be disciplined. Do not buy stocks solely on rumors or news. Before making any investment, do your research.

How do you analyse a stock in its entirety?

Fundamental analysis can help determine the intrinsic value of a stock. Fundamental analysis can help investors determine if the stock's intrinsic value is too high or low. You should review the annual reports, balance sheets, profit & loss accounts, and any news about the company or sector. Fundamental analysis examines various factors such as the PE ratio, EPS and Dividend Yield. Avoid companies with large amounts of debt. It is important to know the background of the company and its management, as well as the factors that could have a significant impact on the company. Every investor must evaluate a company based on technical and fundamental analysis before making a decision on a stock. This article will give you an overview of how to analyze a stock before you invest your hard-earned money.