fundamental investors | stock Market analysis

You cannot fundamental investors without Deep Research the stocks and the underlying companies. That would be similar to running on the highway blindfolded. There are many kinds of share market analyses. Read More to know about fundamental and   Stock Market analysis

WHAT IS fundamental investors ANALYSIS? 

This method aims to evaluate the value of the underlying company. It takes into account the inborn value of the share charge in mind the economic conditions and the industry along with the company’s financial condition and management performance. A Basic analyst would most definitely look at the balance sheet, the profit and loss statement, financial ratios and other data that could be used to predict the future of a company. In other words, Basic fundamental stock  market analysis is about using real data to evaluate a stock's value. The Technique uses revenues, earnings, future growth, return on equity, profit margins and other data to determine a company's underlying value and potential for future growth. "fundamental investors"

The basic True is that as the company grows so will the value of the share increase. This in turn will Advantages  the investor in the long run.

WHAT IS AN OVERVALUED STOCK Market Analysis OR AN UNDERVALUED STOCK?

Previously you look at the balance sheet and other financial details, you use ratios to compare the financials with the price of the stock. This helps to you easily  understand how much an stock holder is really paying in comparison with the company’s growth. The most daily  ratio used is the Price-to-Earnings or PE ratio. This is computed by dividing the share price with the company’s earnings per share.

If the share price in comparison with its earnings per share is less than industry average, then the stock is said to be undervalued. This means the stock is selling at a much lower price than what it is actually worth."fundamental investors"

n contrast, an overvalued stock is where the investor is paying more for each rupee the company earns. This means, the stock’s price exceeds its intrinsic value. This often happens when investors expect the company to do well in the future. A high PE in relation to the past PE ratio of the same stock may indicate an overvalued condition, or a high PE in relation to peer stocks may also indicate an overvalued stock.

However, as an investor you have to be very careful. Compare the fundamental value of the stock with its historic values. If there is a sudden increase in valuation, there are high chances that the price may fall to correct the mis pricing. In case of a sudden fall in valuation, check for any latest news about the company. It is quite likely that some new factor may have emerged that may be detrimental to the company’s profits.

Since the PE is computed using the earnings per share for the year gone by, it is called a trailing PE. This is not a perfect way to understand the stock’s value. For this reason, analysts often use the forward PE, where the estimated earnings per share for the current or another year is used.

Let us understand using an example fundamental investors

Suppose a company ABC earns Rs 50 per share. Its current share price is Rs 100. Its PE ratio is thus 2. Suppose, the average PE ratio for the industry is 5, then the company is undervalued. If there is another company in the same industry with a PE ratio of 10, then its stock will be considered to be overvalued.

However, an analyst expects the company to earn Rs 100 per share in the next financial year. Then the forward PE would be 1.

WHAT IS TECHNICAL ANALYSIS fundamental investors?

Unlike fundamental investors analysis, technical analysis has nothing to do with the financial performance of the underlying company. In this method, the analyst simply studies the trend in the share prices. The underlying assumption is that market prices are a function of the supply and demand for the stock, which, in turn, reflects the value of the company. This method also believes that historical price trends are an indication of the future performance.

Thus, instead of assessing the health of the company by relying on its financial statements, it relies upon market trends to predict how a security will perform. Analysts try to cash in on the momentum that builds up over time in the market or a stock.

Technical analysis is often used by short-term investors and traders, and rarely by long-term investors, who prefer fundamental analysis.

Technical analysts read and make charts of prices. Some common technical share market analysis measures are the day-moving averages (DMAs), Bollinger bands, Relative Strength Indices (RSI) and so on.

INVESTING PHILOSOPHIES:

So now you know about stock market analysis techniques. How does that really help you invest? These investing philosophies will help you understand. "Share Analysis Software"

What does value investing mean?

Value investing is an investment style, which favors good stocks at great prices over great stocks at good prices. Hence, it is often referred to as ‘price-driven investing’. A value investor will buy stocks that may be undervalued by the market, and avoid stocks that he believes the market is overvaluing. Warren Buffet, one of the world's best-known investment experts, believes in value investing.

For example, if a stock of a company growing at 10% is selling at Rs 100 with a PE ratio of 10 and another stock of company that also grows at 10% is selling at Rs 150 with a PE ratio of 15, the value investor would select the first stock over the second. This is because the first stock is undervalued in comparison with the second.

Value investors see the potential in the stocks of companies with sound financial statements that they believe the market has undervalued. They believe the market always overreacts to good and bad news, causing stock price movements to not move in tandem with long-term fundamentals. For this reason, they are always on the hunt for undervalued companies.

Value investors profit by taking a position on an undervalued stock (at a deflated price) and then profit by selling the stock when the market corrects its price later. Value investors don't try to predict which way interest rates are heading or the direction of the market and the economy in the short term. They only look at a stock's current valuations and compare them to their historical range.

In other words, they pick up the stocks as fledglings and cash in on them when they are valued right in the markets. "Currency Analysis Software"

For example, say a particular stock's PE ratio has ranged between a low of 20 and a high of 60 over the past five years, value investors would consider buying the stock if its current PE is around 30 or less. Once purchased, they would hold the stock until its PE rose to the 50-60 ranges, before they consider selling it. In case they expect further growth in the future, they may continue to hold.

What is contrarian philosophy?

As the name suggests, the contrarian philosophy suggests trading against the market sentiment. This means you buy stocks when they are out of favor in the market place, and avoiding stocks that everyone is buying. They then sell these stocks when they gain back the favor.

Contrarians believe in taking advantages that arise out of temporary setbacks or negative news that have caused a stock’s price to decline."fundamental investors"

A simple example of the contrarian philosophy would be buying umbrellas in the winter at a cheap rate and selling them during rainy days. Value investing is a kind of contrarian philosophy.

HOW TO PLACE CONTRARIAN TRADES?

If you are a contrarian trader:

• Conduct stock market analysis. Find out stocks with low PE ratios.
• Once you do that, compare with historical PE ratios and share prices.
• Read up about the company, its financial performance and future outlook. If you are satisfied that the company is inherently worthy, select the stock.
• Wait for the prices to decline. Buy at lows.
• You could also look at market indicators like mutual fund cash positions, and put/call ratios, and investment advisory opinions. Mutual funds hold a portion of their assets as cash. A greater cash holding suggests that mutual funds are bearish, while a low cash holding means mutual funds are investing money in the markets. This means they are bullish. Once you understand this, take an exactly opposite position. Sell when MFs are buying and buy when they are selling.
• Aput option is an agreement to sell in the future in the derivatives market, while a call option is when you agree to buy in the future. The put/call ratio helps you understand the proportion of put options and call options. The higher this ratio, the greater the put options, and vice versa.
• An increase in put options suggests that the market is bearish, while demand for call options means the market is bullish. As a contrarian trader, you should prepare accordingly.
• Investment advisories are issued by many brokerage firms and investment banks, which regularly conduct analysis of individual stocks, industries and the overall economy. A positive recommendation often leads to an increase in share price as investors buy the stock. Contrarian traders could buy when negative investment advisories are issued, and sell after positive recommendations. "Commodity Analysis Software"

Share Analysis Software | Market Analysis System

Technical Analysis/Stock Charting Software 

The Share Analysis Software  is an open-source software application that provides tools for analysis of financial markets using technical analysis.

MAS provides facilities for stock charting and futures charting, including price, volume, and a wide range of Share Analysis Software or Technical  analysis indicators. MAS also allows automated processing of market data — applying technical analysis indicators with user-selected criteria to market data to automatically generate trading signals — and can be used as the main component of a sophisticated trading system.

Some of the features of MAS are:

·     Includes basic technical analysis indicators, such as Simple Moving Average, Exponential Moving Average, Stochastic, MACD, RSI, On Balance Volume, and Momentum.

·     Includes more advanced indicators, such as Standard Deviation, Slope of EMA of Volume, Slope of MACD Signal Line, Bollinger Bands, and Parabolic SAR.

·     User can create new technical analysis indicators, including complex indicators based on existing indicators.

·     User can configure criteria for automated trading-signal generation.

·     Creation of weekly, monthly, quarterly, and yearly data from daily data.

·     Handles intraday data.

·     Handles stock and futures data.

·     Accepts input data from files, from a database, or from the web. (Includes a configuration for obtaining end-of-day data from yahoo.com.)

·     Can be configured and run as a server that provides services for several clients at a time running on remote machines.

The current version of MAS runs on Intel machines, on both the Linux and Windows operating systems. Additionally, it has been ported to Sparc/Solaris, though it has not yet been officially released for that platform. MAS is free software (freeware).

6 Reasons to Trade Currency Options Check Now ..!!!

Currency Options might just be better for beginners!

1. Lower Margin

Currency Options require a margin of only 3000 Rs per lot compared to equity and index options which are typically around 50k-1L. This means even smaller traders can enter this. "share analysis software"

2. Weekly Options 

They have weekly and monthly options just like bank nifty. So if you are looking to play for short time Theta, or betting on a big move within a small time frame, it can be very useful. "Commodity Analysis Software"

3. No STT

The universally hated Securities Transaction Tax (STT) does not apply for currency options. Which means they are more profitable from a buying options perspective."FnO analysis software"

4. Currencies are more stable compared to Equities

This means more predictability, and manageable risks, and less volatility. Great for beginners

5. It is difficult to manipulate currencies

Simple. Le Doobega Private Limited can be manipulated by 5 operators in Dharavi. Doesn’t happen in currencies (Unless the five operators are Federal Reserve, RBI, etc) "Currency Analysis Software"

6. Small Losses

Currencies move 10–20 paise a day on an average, and like 60–70 paise in big moves. At 10 Rs per paise per lot, your losses per lot will only be a few hundred rupees. Which is as good as nothing. Low cost of learning, we say!

If you would like to try USDINR options, try searching USDINR in Options Strategy Builder by vedant margdarshak

Currency Analysis Software

Technical analysis is the study of demand and supply, price movements, historical prices and volumes. If price goes up with increased volumes, technical chart shows at that time people in the market thought that the price of the stock might go up. It gives visual representation of the market movements to the analyst which is very easy to understand. Line charts or candlestick chartsare used in technical analysis system. One candle show Open, High, Low and close of the stock for that particular time frame. 5 min to 15 min time frames gives best result in intraday technical chart. 20 mins to 1 hr. Charts are good for delivery trading. Candle chart moves according to market movements in live technical chart. "Currency Analysis Software"

 Everyone wants to make profit from the market. The simple key of making profit is study of technical analysis & fundamental analysis. In fundamental analysis one has to study company’s balance sheet, profit and loss a/c, earning per shares orders in hand, etc. Study of current data v/s past performance. In technical analysis we study historical price data as well as current market data to see what movement we can see in future. Technical analysis graph gives clear direction of Bullish, Bearish and sideways market. "Share Analysis Software"

In stock market prices are fluctuating every second, it is not possible to remember every movement. Technical chart plots every second movement in particular time frame candle with high, low, open and closing price so it’s easy to predict the future movement. Technical indicator helps to...

1.         Understand support and resistance levels.

2.         Check back history of shares.

3.         Understand up trends or downtrends.

4.         Most important it helps to take right decision of buying or selling with target and stop loss.

Types of chart and Indicators "Commodity Analysis Software"

 Candlestick charts are used for making decisions in trading. In these patterns it gives clear view of movement like open-high-low-close in particular time frame (5 min, 10 min, 1 hrs).

 If closing price of the candle is higher than opening price it shows in Green or Blue colour, its “Bullish Candle”.

Eg:- If closing price of ABC share is 105 & its opening price was 100 its price is increasing.

 If opening price of the candle was higher than closing price it shows in Red colour, it’s “Bearish Candle”.

Eg:- If opening price of ABC share was 105 & its closing price is 100 its price is decreasing. "FnO analysis software"

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For what reason would you make a stock pattern investigation? A definitive objective is obviously to profit. No one or not very many individuals just are investing energy putting their cash in the financial exchange only for the sake of entertainment. The goal is obviously to profit. The special case here is possibly those individuals who break down patterns as a calling for their boss. They get paid to take the necessary steps. Be that as it may, I think about when they see some great patterns; they put their own cash behind them also.

In this way, next inquiry at that point. For what reason would making a pattern investigation help you to profit on the securities exchange? The appropriate response is basic; to anticipate what’s to come. Be that as it may, it’s not possible for anyone to anticipate the future you would state. Right, neither with precious stone ball looking nor with performing stock pattern examination would you be able to foresee the future with assurance.

The thought here with Stock Trend Analysis is that you influence an expectation for the future and that you to have a higher likelihood to be directly than to not be right, by and large. You can never say for every individual circumstance what the result will be. In any case, the guideline thought behind making a pattern investigation is that you can be more frequently directly than off-base.

Hence being off-base all the time is intrinsic to completing a stock pattern examination and making dependent on these forecasts for what’s to come. Individuals who are making forecasts dependent on this investigation or speculators who are putting their cash behind these patterns need to acknowledge that they can’t generally be correct, that they can’t generally win. On the off chance that they lose here and there or in the event that they are incorrect in some cases, they will not be disheartened. Accomplishment here must be estimated over the long haul.

Presently how about we go to the following point in this clarification why somebody would make a stock pattern investigation. On the off chance that this is done to foresee the future and to profit in the long run, for what reason would you believe that something like this works? Presently we could list here every one of the books and articles that have been expounded on the victories that speculators have had with pattern contributing by following stock patterns. That goes past the extent of this article.

We need anyway to call attention to a basic visual watch that you can do right now yourself. View an authentic outline of a financial exchange list that demonstrates a period length of over 10 years. It is anything but difficult to see the patterns all over. It is additionally simple to see that these patterns went on for a long time and frequently numerous years. It is then sound judgment that when stock pattern examination can recognize a pattern fairly from the get-go in its reality, and the forecast is more regularly directly than wrong, great cash can be made by riding the influx of the pattern. " Fno Software Analysis "

In synopsis, financial specialists make and depend on stock pattern investigation to acquire great cash in the securities exchanges by being more frequently directly than wrong while foreseeing the future dependent on existing patterns in the market.

Do you need increasingly monetary opportunity to have room schedule-wise and assets to do what satisfies you, to experience your motivation and to help other people? Or on the other hand would you simply like to get some more cash-flow?

At Stock pattern Investing We need to help you in this by sharing basic financial exchange contributing systems that work for everybody and that empower individuals to accomplish higher returns when contributing their reserve funds. "Currency Analysis Software"

What is Stock Market Analysis? Types of Stock Market Analysis

What is Stock Market Analysis?

Stock market analysis enables investors to identify the intrinsic worth of a security even before investing in it. All stock market tips are formulated after thorough research by experts. Stock analysts try to find out activity of an instrument/sector/market in future. "Share Analysis Software"

By using stock analysis, investors and traders arrive at equity buying and selling decisions. Studying and evaluating past and current data helps investors and traders to gain an edge in the markets to make informed decisions. Fundamental Research and Technical Research are two types of research used to first analyze and then value a security. "Commodity Analysis Software"

2. Why is Stock Market Analysis important?

Performing a research before making an investment is a must. It is only after a thorough research that you can make some assumptions into the value and future performance of an investment. Even if you are following stock trading tips, it ideal to do some research, just to ensure that you are making an investment that’s expected to get you maximum returns.

When you invest in equity, you purchase some portions of a business expecting to make money upon increase in the value of the business. Before buying anything, be it a car or phone, you do some degree of research about its performance and quality. An investment is no different. It is your hard earned money that you are about to invest, so you must have a fair knowledge of what you are investing in. "FnO analysis software"

3. What is Fundamental Research?

In fundamental research, you try to find out value of an equity share using the information provided in the financial statements of the company. The investor tries to analyse various aspects of the business like competitive advantage, financial soundness, quality of management and competition. The main aim is to ascertain the relative attractiveness of the underlying business.

Here, it is assumed that the market price doesn’t reflect the true value of the company due to some uncontrollable external factors like investor sentiments. As the market will attain equilibrium, the real value will be equal to its market price in the long run. It believes that paying a higher price for a stock will affect return on investment adversely. Thus, by means of financial ratios, investors try to arrive at the true value at which a stock should ideally trade in the market. "Currency Analysis Software"

4. Which key indicators are used in Fundamental Research?

Financial ratios form the pillars of fundamental research. Some of them are as follows:

Return On Equity (ROE)

Return On Equity tells you about how much does a company earns on shareholders’ equity. It gives you information apart from a simple profit figure. It shows whether the operation of the company are efficient or not.

Return On Equity = [(Income – Preference Dividend)/ (Average Shareholders’ Equity)]*100

While looking for this metric, an ideal ROE is one which is consistent, high and increasing. ROE of one company can be compared with its own past performance and with performance of other companies within the same industry. You may use it irrespective of the type of industry.

Debt-Equity Ratio (DER)

Debt-Equity Ratio shows the proportion of assets which is being used to finance the assets of the company. It indicates how much funds have been provided by the borrowers and owners of the company. This ratio can be expressed in numbers and in percentage.

Debt-Equity (D/E) Ratio = Total Debt/Total Equity

While looking for a debt-equity ratio, go for the ones which are lower than others and are decreasing in a consistent manner. You can compare D/E of one company with its own past performance and with performance of other companies within the same industry. You may use it to analyse performance of capital intensive industries like capital goods, metals, oil and gas.

Earning Per Share (EPS)

Earning Per Share is one such useful measure which the investors look for all the time. It shows the amount of money which the company is earning on every share. EPS of a company needs to increase in a consistent manner to show superior management performance.

Earning Per Share = (Net Income – Preference Dividend)/Weighted Average Number of Shares Outstanding

EPS of one company can be compared with its past performance and with that of other companies in the same industry. It can be used to ascertain what portion of profit is the company allocating to each outstanding share. Investors usually go for companies which have steadily increasing earnings per share. It can be easily used to compare performance across industries.

Price to Earning Ratio (PER)

Price to Earning Ratio compares the current market price of the share with the earnings per share. It tells you the price which the investors are willing to pay for the share depending on the current earnings.

Price to Earning Ratio = Current Share Price/Earning Per Share

This ratio also indicates the number of years that will be required to get back the initial invested capital by way of returns. You need to look for stocks which have a low price to earnings ratio. You can easily compare P/E ratio of a company with its past performance and also with other companies operational in the same industry. Ideally, this ratio is suitable to analyse performance of companies present in FMCG, pharmaceutical and technology sector.

5. What is Technical Research?

Technical research relates to the study of past stock prices to predict the trend of prices in future. It shows you the direction of movement of the share prices. With the help of technical research, you can identify whether there will be sharp rise or fall in the price of share. It is not dependent on recent news or events which has already been incorporated in the price of the share.

As the stock prices are dependent on investor psychology which keeps changing according to news and events, technical research emphasizes the use of Stop-losses. It will save investors from suffering a big loss in future. Technical research gives meaningful results only for stocks which are high in demand and traded in huge volumes.

Technical research uses different types of charts like bar chart, candlestick chart; to understand the pattern of stock prices. Daily charts are used by short term traders to examine the immediate movement in the stock prices. Weekly / monthly charts are used by medium/long term traders to ascertain the probability to earn higher more in the long run.