An insight into the Indian stock market and trading

Stock prices change every day by market forces. By this we mean that share prices change because of supply and demand. … Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall. Fundamental analysis of stocks is a technique which is helpful in making investment decisions. Its basic importance lies in determining the intrinsic value of a security. It can then be compared to the current stock price and determined if the stock is overvalued or undervalued. Technical analysis of stocks and trends is the study of historical market data, including price and volume. Using both behavioural economics and quantitative analysis, technical analysts aim to use past performance to predict future market behaviour. Data required are not easily available. Fundamental analysis examines the health of a company using balance sheet data, revenue projection models and just plain common sense. Stock prices tick up and down constantly due to fluctuations in supply and demand. If more people want to buy a stock, its market price will increase. If more people are trying to sell a stock, its price will fall. The relationship between supply and demand is highly sensitive to the news of the moment Average daily turnover of NSE is approximately 17500 crores. The stock price can not be manipulated for major stocks since it is monitored and traded with large set of people. However the penny stocks can be manipulated and generally not recommended to trade with penny stocks Technical analysis differs from fundamental analysis in that the stock’s price and volume are the only inputs. The core assumption is that all known fundamentals are factored into the price, thus there is no need to pay close attention to them. Technical analysts do not attempt