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HOW TO CHOOSE SHARES/ STOCKS BEFORE INVESTING

FIRSTLY MAKE AN FUNDAMENTAL Analysis. IT IS MADE BOTH FROM MACRO AND MICRO ECONOMIC POINT OF VIEW. IN THE MACRO ECONOMY , YOU HAVE TO FIND IN WHICH ECONOMIC CYCLE THE COUNTRY’S ECONOMY IS IN . IS IT GROWING PHASE, DECREASING PHASE, SATURATION PHASE OR RECESSION.

THEN YOU HAVE TO DO THE SECTOR WISE ANALYSIS, WHICH SECTOR AT PRESENT AND FUTURE HAS LARGEST GROWTH OR GROWTH POTENTIAL. IS IT STEEL, CEMENT, IT OR CHEMICALS, ENGINEERING , BANKING AND UNDER WHICH SECTOR YOUR SELECTED COMPANY COMES AND WHAT IS IT’S POTENTIAL AS PER RANKING MADE IN INDUSTRY/SECTORWISE ANALYSIS.

THEN MAKE AN ASSESSMENT OF THE COMPANY. SEE THEIR BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. CALCULATE THE DIVIDEND YIELD/PAYOUT RATIO, EARNING PRICE PER SHARE, PROFIT EARNING RATIO, PROFITABILITY INDEX, RETURN ON INVESTMENT.

THEN MAKE THE TECHNICAL ANALYSIS. IT IS CARRIED OUT FOR CERTAIN TIME FRAME. ARE YOU DAY TRADER, SWING TRADER OR INVESTOR. FIND OUT THE 50/200 PERIOD Moving Average FOR LONG TERM TREND AND 5/20 EXPONENTIAL MOVING AVERAGE FOR SHORT TERM TREND. ALSO FIND THE PIVOT POINT, RSI, STOCHASTIC, MACD, BOLLINGER BAND, ELLIOT WAVE, SUPERTREND, GAN CALCULATION FOR THE CHOSEN TIME FRAME. EVERYONE HAS CERTAIN STRATEGY WHICH IS A COMBINATION OF THE TWO, THREE OR MORE OR ALL OF THE ABOVE. FOR DAY TRADING YOU ALSO HAVE TO FIND OUT THE DAILY VOLATILITY AND LIQUIDITY OF THE STOCKS. SEE THE PERCENTAGE MOVEMENT AND DAILY VOLATILITY REPORT FROM NSEINDIA OR ANY OTHER SITES. SOME SITES ALSO PROVIDE THE DELIVERY INTEREST/OPEN INTEREST OF STOCKS/SHARES, PRICE INCREASING WITH VOLUME INCREASING OR Vice Versa, PRICE INCREASING AND VOLUME DECREASING OR VICE VERSA. YOU HAVE TO ANALYZE ALL THESE THINGS

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HOW TO CHOOSE SHARES/ STOCKS BEFORE INVESTING

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