Analyzing the stocks in different perspective is essential to enhance the knowledge and become a successful investor/trader.

  • Demand and supply drives the stock price. and more other drivers, such as micro and macro economic factors, news and earnings reactions. which leads the buyer and seller to react frequently cause the price changes so often.

  • Fundamental analysis is studying the company in details. like How much this particular asset/business worth.
    Its helps to measure the financial health& quality of the business.

  • Technical analysis actually studies the market to determine the Demand and supply. Its easy to identify the price movement. if the demand is greater than supply we can expect the price to go up, if the demand is less than the supply probably the price may come down. Traded Price and the volume is the input to identify the demand and supply.

  • Fundamental analysis is help to identify the good business and its future for long term investment. But its not completely transparent to all the market participant, only the strong hands can afford to collect the details before it reach to the public or retail investors.

  • Fundamental analysis:
    Company annual report to identify the revenue, profit and loss. cash flow, debt and asset. Growth strategy, competition, R&D Plan, Management, Brand value, employees satisfaction survey, customer feedback, future growth, etc

    Technical Analysis: Traded price and Volume

  • News, Earnings, and analyst report all are mostly outdated while reaching to public. The person who aware of the details before it reach to public, might benefit from the price movement first.

  • Average turnover of NSE on daily basis is 29410cr.
    Manipulation is not possible in the most liquid stocks listed in Nifty 50 index. Some stocks is less in liquid can be manipulated.

  • Pros: 1. Data(Charts) for the technical analysis is available for everyone.
    2. Help to identify the trend direction independently.
    3. Help to plan & execute the trade rationally with the valid entry and exit points.
    Cons: Chances of misleading is high if follow the technical analysis without knowledge.

  • Penny stocks are less in liquidity and difficult to exit.

  • Line chart, Bar chart and candlestick charts.

  • Candle stick chart help to find the clear price movement in short term trading in small time frame.

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