Stock Market Analysis: Easy Strategies For Success In 2023

Stock market analysis uses fundamental analysis in an effort to determine their inherent value. Fundamental analysts research a wide range of topics, including the state of the global economy, industry trends, as well as the management and financial health of specific businesses. Fundamental analysts examine all of the following: earnings, costs, assets, and liabilities.

Technical analysis makes use of historical stock data to forecast future price changes. Instead, economic and financial aspects that affect a corporation are examined using fundamental analysis. So let’s go into the specifics of how technical analysis and fundamental analysis are different from one another. Technical analysis forecasts future price movements of a company using historical data.

Instead, economic and financial aspects that affect a corporation are examined using fundamental analysis. Let’s now explore the specific differences between fundamental analysis and technical analysis.

In contrast to fundamental analysis, which begins with the company’s financial statements, technical analysis begins with charts. In fundamental analysis, you will need to look at a company’s income statement, balance sheet, and cash flow statement to establish its intrinsic worth.
One can calculate an asset’s intrinsic value by discounting the value of predicted future cash flows to their net present value. You can invest in the stock if it trades below the company’s intrinsic value. Technical analysts, however, contend that a stock’s price already captures all factors that have affected or may affect a company.
Unlike technical analysis, which uses a short-term perspective, fundamental analysis frequently has a long-term time horizon. A company’s intrinsic value won’t be reflected in the stock market for a very long time, according to the fundamental analysis method. Stock charts can be divided into weeks, days, or even minutes.
The objectives of technical analysts and fundamental analysts are very different. While fundamental analysis calls for long-term investments, technical analysis requires you to find numerous short- to medium-term trades where you can make a profit.

How to do a Fundamental analysis of stocks?

First, You should understand the company because it is crucial to comprehend the business you plan to invest in. In You will better understand the business’s operations, if it is making the best choices for its long-term objectives, and whether you should keep or sell the shares. A smart way to gather such information is by visiting its website and learning about the business, its management, its promoters, and its products.

Second, study the financial reports of the company. Once you are done understanding the company, you should start analyzing its financials, such as balance sheets, profit-loss statements, cash flow statements, operating costs, revenue, expenses, etc. You can evaluate its compounded annual growth rate ( and sales and if the net profit has been increasing for the last five years, it can be considered a healthy sign for the company.

Third, Debt is a significant aspect that might negatively impact a company’s profitability. If a security has a significant debt, it cannot perform well and pay you back. It is advised that you steer clear of businesses with significant debt. Always look for investment opportunities in companies with debt-to-equity ratios under 1.

Fourth, The business you want to invest in must rank highly among its competitors. Look for a business that is performing better than the competition. It should have better future prospects, upcoming projects, new plans, etc.

Fifth, The best time to use fundamental analysis is when you want to make long-term investments. Invest in businesses whose products will be relevant 15–25 years from now. And lastly, review all the aspects from time to time. Don’t invest in a business and then ignore it. Keep yourself informed about the business you have invested in. You should be updated about all its news and financial performance. Sell the security if there is a problem in the company.

Pick Stocks using Fundamental and Technical Analysis

How to Pick Stocks Using Fundamental and Technical Analysis? There are two popular methods for classifying and choosing equities fundamental and technical analysis. Personal taste can influence how and when to utilize them, but each offers advantages. By analyzing the underlying company’s operations and the state of its industry or the overall economy, the fundamental analysis seeks to find stocks with high growth potential at fair prices.

For longer-term transactions, investors have historically employed fundamental research, depending on indicators like earnings per share, price-to-earnings ratio, price-to-earnings growth, and dividend yield. Technical analysis, on the other hand, bypasses the underlying company’s fundamentals and instead looks for statistical patterns on stock charts that might foretell future price and volume moves.

The idea here is that stock prices already reflect all the publicly available information about a particular company, so there’s nothing to be gained from poring over a balance sheet. Given the focus on price and volume moves, traders have traditionally used technical analysis for shorter-term trades.

Why using both types of analysis may be the best course of action

Focusing on just one style of study could result in you missing crucial hints about a stock’s value because both methods of analysis have the capacity to reveal potentially useful information. Employing both types of analysis may be the best course of action because the expected timeframe of a trade may alter. Why not use them in a way that plays to each of their advantages? Choose the candidate based on fundamental considerations, and use technical considerations to determine the ideal entry or exit price.

One of two fundamentals-focused techniques is typically employed by investors that use fundamental analysis: Growth investors concentrate on a company’s potential in the future. Value investors concentrate on determining if the present stock price makes sense in light of the state of a specific firm.

Contents

Growth Investor’s strategy

Companies are typically designed to expand, make money, and eventually give some of that money back to shareholders. Few newly founded businesses are profitable right away. Growth investors may still believe a company has a bright future if it initially reports strong revenue growth, even if it doesn’t make a profit. The stock price of a young company may begin to rise when investors determine that it has a cutting-edge offering or compelling competitive advantage. The more investors who join the party, the higher the company’s stock price is likely to rise. Such investors typically focus on metrics such as a company’s historical and projected revenue growth rates when buying shares of relatively new companies.

Value investor’s strategy

Companies are typically designed to expand, make money, and eventually give some of that money back to shareholders. Few newly founded businesses are profitable right away. Growth investors may still believe a firm has a bright future if it first shows great revenue growth, even if it doesn’t make a profit. The stock price of a fledgling firm may begin to rise when investors determine that it has a cutting-edge offering or compelling competitive advantage. The stock price of the company is more likely to increase as more investors join the fray. When purchasing stock in relatively young companies, such investors frequently pay attention to factors like a company’s historical and forecast revenue growth rates.

3 Processes of Technical Analysis

Technical analysis plays a crucial role in stock selection and trading strategies. It helps investors make informed decisions based on historical price movements, trends, and market patterns. Three key processes are often involved in stock selection using technical analysis: stock screening, chart scanning, and trade setup.

Stock Screening

Stock screening is the first step in technical analysis, where traders use a predefined set of technical criteria to filter and generate a list of 20 to 25 potential stocks worth considering. This process allows traders to narrow their focus and identify stocks with strong technical indicators that align with their investment strategy.

Common technical screening criteria include:

.Moving average crossovers
Relative Strength Index (RSI) levels
Volume trends and unusual trading activity
Price breakouts or trend reversals
Bollinger Bands and other momentum indicators

Chart Scanning

Once a watchlist is created, the next step is chart scanning. This process involves analyzing stock charts to reduce the list further, identifying three or four strong contenders for potential trades. By carefully examining price patterns, traders can pinpoint ideal entry points and confirm whether a stock meets their trading criteria.

Key factors to consider while scanning charts include:

Identifying trend direction (uptrend, downtrend, or consolidation)
Spotting breakouts that signal strong momentum in the direction of the trend
Recognizing pullbacks-short-term moves against the dominant trend—which can present optimal buying or selling opportunities
Confirming price patterns such as double tops, double bottoms, and head-and-shoulders formations

Trade Setup

The trade setup is the final stage of the technical analysis process, where traders refine their entry and exit strategies based on chart analysis. The goal is to capitalize on price movements while minimizing risk.

For breakout trades, a strong entry signal could occur when a stock moves sideways for a few days and then breaks out to a new high. This indicates bullish momentum and a potential buying opportunity. Conversely, if a stock consolidates and then breaks to a new low, it could signal a short-selling opportunity.

For pullback trades, traders look for short-term dips in an uptrend or temporary rallies in a downtrend. A pullback to a support level—such as a moving average or a previous low—can provide a high-probability entry point.

Determining Trade Viability

To ensure the best trade setup, traders use technical indicators such as:

Moving Averages – Helps identify trend direction and support/resistance levels
Volume Analysis – High trading volume on breakouts confirms strong price movement
Stochastic Oscillator – Measures momentum to detect overbought or oversold conditions

A key objective is distinguishing between a temporary pullback and a full trend reversal. If a stock is retreating to a significant support level and then shows signs of resuming its trend (such as breaking past the previous day’s high), it is more likely to continue its upward movement. Similarly, traders looking to short a stock will wait for price weakness following a resistance level retest.

The process of choosing stocks doesn’t have to be difficult, but flexibility is a must. While keeping an eye out for moving markets, be prepared to refrain from trading. Think about going both long and short. Finally, and perhaps most importantly, you need to be disciplined. Don’t let the inevitable bad trades turn into a disaster. Keep your losses small and live to trade another day.

REGISTRATION PROCESS:

Step 1: Register Online

Visit the Philstocks PH website.
On the homepage, click on “Register”.
Choose the type of account you want to open (e.g., Individual, Joint, Corporate).
Fill out the online registration form with your personal details, including your full name, email address, mobile number, date of birth, nationality, and address.
Create a username and password for your account.
Review and agree to the terms and conditions.

Step 2: Upload Your Valid IDs and Take a Selfie for Verification

Prepare digital copies or clear photos of the required identification documents.
Ensure you have a valid government-issued ID, such as a Passport, Driver’s License, SSS ID, or any other accepted ID.
Upload the photos or scanned copies of your valid IDs as instructed on the registration form.
Take a selfie with your valid ID for identity verification purposes.
Ensure that the uploaded photos are clear and readable to avoid delays in verification.

Step 3: Fund Your Account

Once your account is approved, log in to your newly created Philstocks PH account.
Navigate to the “Fund Account” section.
Choose your preferred method of funding your account (e.g., bank transfer, online payment).
Follow the instructions provided to deposit funds into your trading account.
Wait for the confirmation that your funds have been credited to your account.

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Stock Market

Stock Market Analysis: Easy Strategies for Success in 2023

How to do a Fundamental analysis of stocks?

Pick Stocks using Fundamental and Technical Analysis