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Know The Market(Session-11)

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  Technical Analysis- Technical analysis is done on the basis of historical price movement plotted on a two-dimensional chart. This method believes that historical price trends are an indication of the future performance. Used by short-term investors and traders, and rarely by long-term investors. It is easy to understand as you can look at the chart and see how prices have moved. An investor can understand and analyze the current, previous and possible future trend of the stocks. Q- How does technical analysis work? Ans-  Technical analysis rely on market prices which is a reflection of the supply and demand for the stock. Technical analysis read and make charts of prices. Some common technical analysis tools are the day-moving averages(DMAs), Bollinger bands, Relative strength indices(RSI) and so on. Stock Chart - Basics It is the key to analysis is a stock chart. Charts are not perfect but they provide clues as when people are buying or selling. Charts make statistical assumptions a
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Know The Market(Session-10)

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Fundamental Analysis- Fundamental analysis is one of the most popular method of stock analysis. You can choose and evaluate the company through its earning and balance sheet. Essence of fundamental analysis is to find out as much you can about the company to decide whether it is worthwhile investment compared to other stocks.  It tries to estimate the value of stock through the analysis of various factors such as the management, financials,economy and industry in which the company operates etc. Approaches to Fundamental Analysis- There are two approaches of fundamental analysis- Top Down Approach Bottom Up Approach In top down approach we must try to understand the economy. Then we make shortlist about the industry, which industry was exactly grow. Then identify the companies based on the industry. In bottom up approach the fundamental analysis is based on the company specific. Q- What is top down approach? Ans- Top Down investor looks at macro economic variable like GDP, inflation, In
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Know The Market(Session-9)

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  Selling Strategies- It is harder to take good selling decisions than good buying decisions. Success of stock investments depends on selling them at the right time, otherwise all the gains are national. If you sell a stock too soon you may loose out on potential profits. If you sell a stock too late, you might turn a winning position into losing position. When people sell stocks- There are many reasons why people sell a stock- When a stock is no longer performing as you expected. Due to sharp run up in prices, one stock may become a large part of your overall portfolio. If you have made a wrong choice in selecting, it is better to take a small loss now, than a bigger loss later. Cyclical stocks - when the cycle ends. Ex : Metals, Sugar etc. When to sell a winning stock- You need have a profit target, for your winning stocks also. You cannot hold it forever, because winners may turn losers. When a stock seems to be overvalued based on fundamentals or technical analysis. When to sell a
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Know The Market(Session-8)

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Tactics and Strategy - Buy and hold Easiest investment strategy is to and hold. Works very well under certain market conditions : especially in bull market condition. In bear market very difficult to follow. Buy and hold when there is a good reason to hold. Constantly reevaluate your portfolio. Hold because of fundamentals and investment strategy Don't sell because of market condition or economy or stock price. Tactics and Strategy - Buy on dips Buy on the dip strategy is a popular strategy. When a stock you own(or want to own) goes down in price, especially if you believe the decline is only temporary because the company is still fundamentally sound, you buy shares(or more shares). Tactics and Strategy - Bottom fishing Bottom fishers look for stocks that have hit the rock bottom and have the potential to go up. Idea is to make money when the stock is discovered by the market and you will get a good price for your stock. It is not a easy strategy to follow. This strategy requires l
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Know The Market (Session-7)

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  What makes Stocks go up or down- 1. Internal Factors 2. External Factors Exactly market hates uncertainty so it reacts. Having a through understanding of market environment is important in picking the right stock. In generally, demands and supply:  more buyers than sellers-stock price rise.           a. Similarly more sellers than buyers stock prices decline.           b. Stocks rise and fall based on people's perception. Go up or down depending upon the mood of the country and the state of the economy. Also go up or down because of buying and selling of institutions such as mutual funds, banks, insurance companies etc. It is very difficult to predict stock market movement. Look for market indicators to make investing decisions. In addition to using market indicators also look for the cues from other sources. Macro indicators of India- Monetary policy Fiscal policy etc. Inflation GDP  IIP Rupee strength Buying Strategy- Tactics and Strategy- Buy and hold Easiest investment strate
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Know The Market (Session-6)

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  Buying your first stock- You have a clear idea what you buy. create a strategy for buying and selling stocks. How much you are willing to take risk from other one. Research properly before you put your money in particular stock. Buy and hold leads to buy and forget strategy. You have the discipline and confidence to get out of the market at the right time and then re-enter in an appropriate time. Stock Selection Process- Step - 1: Screening for ideas- With approximately 7000 companies trading in BSE and NSE, analysis of all the companies may not be possible. In order to avoid this as investor has to understand the kind of stocks which he wants to invest in market. Example : An investor might want to invest in-                    1. Only banking sector stocks                    2.  Only multi baggers                   3.  Only stocks with strong government backing etc. Understanding the idea behind investing makes the stock list manageable. Step - 2: Filtering the names- The next step
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Know The Market (Session-5)

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Classifying Stocks By Sector- Financial services,real estate, consumer goods etc. By earning growth- Value stocks, growth stocks, income stocks. By Size- Large cap, Mid cap, Multi cap, Small cap. Classifying by Sector- Sector is a group of companies that loosely belongs to the same industry and provides similar products or services. Eg -  Software, Airlines, Pharma etc. Understanding sectors is important as there are always some sectors are doing well and some are struggling. If you working for any sector in current time, then your know the current market situations of that particular sector. It is easy to you for investment. Classifying by earning Growth- Stocks can be classified by their earning growth in the past and expected growth in the future. Main types are:     1. Value Stocks     2. Income stocks or dividend stocks     3. Growth Stocks Value Stocks- Value stocks are shares of companies that are selling at a reasonable price compared with their true worth or value. Value stock
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