Hello friend. This is Vivek Bajaj. I’m
the co-founder of Stockage. In this video I am going to talk to you about how to
analyze a stock and the analysis can be done for the purpose of short-term
trading all the analysis can be done for the purpose of investing now in this
video I’m not going to talk about intraday trading because that’s a very
very different ballgame but definitely from a short-term perspective as well as
from a long-term perspective how do you analyze the stock trends up just to make
you understand that you can analyze the market in two ways fundamentally or
technically fundamentally essentially means that you try to find out the
factors that can influence a business in which the company is and figure out in
future what is going to be the effect of those factors on the performance of the
business of that company and technically is more with respect to stock price you
try to find out what the crowd is thinking with respect to the stock price
and where you think the crowd will take the stock price to so that is more of
sentiment driven rather than the performance driven now considering these
two factors the fundamental and the technical analysis stockage helps you to
do a 360-degree understanding of a stock where you can not just get information
about the stock but also do value-added research in both the aspects and
technical and fundamental so that you can start making a judgment on that
stock and the judgment can be based on your objective whether you want it to be
a medium term or a short term judgment or you want it to be a long term
judgment now let me show you the complete database which is the relevant
for you to make a judgment on a company using this beautiful stockage app now a
little search for any stock say I search for the stock call reliance so I can
just when I type reliance I can see there are various options available in
the name of Reliance I select Reliance Industries now this section of stock
edge is actually a 360-degree view about the stock everything you probably would
like to know about the stock is available here the first and the most
primitive thing you want to know about the stock is how does the stock price
moved over the period of time and for us I think as a retail investor even if we
look at last five years perspective that what has been the trend or how the stock
price has moved or the last five years I think we will have a fair idea about the
performance of the stock price of that stock so if you see a simple price chart
can give you a fair understanding of how the stock has been moving over a period
of time and the time period can be two years five years depending upon your
judgement you want to make about that company this chart is a very simple
price chart which is giving you a trend however if you want if someone wants to
do a deeper analysis with more technical parameters then obviously you can
subscribe to the detailed advanced chart and you can select the period which may
be relevant for your analysis and these detail period these did this detail
charge you can draw various trend lines various other indicators you can plug in
more indicators to you know to to see how the stock has been performing with
obvious those technical indicators but as I am NOT getting into understanding
of technicals and fundamentals right now because we have lot of free videos in
our real and Marcus channel where you can watch and you can learn about these
two studies but all I’m trying to show you is that there are certain cutting
edge features which is available in this app which you can use as a learning
person to make a judgement about that company now as you know there are
technical indicators which can be plotted as there are other tools which
are providing you one of the beautiful feature which we have added in stock
hedges you can actually add fundamental indicators also as part of the chart so
see for example in this I am plotting say quarterly EPS as part of this chart
and I’m saving this template see this chart now you see how the reliance stock
price has performed at the same time the performance is backed by the increase
increment in the quarterly EPS performance of the company
so this is a very unique thing where you can get to understand where the
fundamentally that company is doing as good as the stock price has been doing
before you know I can I go into the further stock price understanding just
to give you an academic understanding of a stock price so a stock price is
actually a component of two important characters one the intrinsic value of
the stock which is derived out of the business which the company’s into an
intrinsic value also takes into account the past performance of the company
which is reflected by profit and loss account and the balance sheet but the
second and which is the most critical part of any stock price movement is the
speculative value in the stock price and that speculative value is largely driven
by the liquidity phenomenon that means the more liquidity in the system the
more people are willing to buy that stock that speculative value will be
more prominent in the stock price and the stock price will move beyond the
intrinsic value you must have seen understood the concept of price earning
multiple so there are a lot of companies where P multiple is very very high how
do you justify that the justification is very simple when P is high that means
there is no speculative value in the stock price that means people are
expecting more money to be there pumped into the stock market to bring that to
buy that particular stock and people people want to be always a net buyer in
the stock that’s why the speculative value is more than the intrinsic value
all right now let’s go to the other data point which may be relevant for you that
you can also if you’re a short-term trader and if you probably trade for a
swing of four five six days you would like to know whether these talk there is
any significant buying or selling is happening in that stock and the buying
and the selling is symbolic from two important parameter one is a volume that
means how many people are buying selling on accumulative business and the second
which is the critical is the delivery that was at the
8th of the day how many people are taking delivery of that stock and going
home the more people take delivery of that stock there is a higher possibility
that the momentum towards price increase will sustain because if they are taking
delivery that means they’re putting they’re willing to put more money that
means they’re willing to take more risk and the higher people are willing to
take less the chances that the momentum will be higher is extremely high so
through this chart which is a beautiful chart which gives the combination of
both the exchanges delivery as well as volume data you get to see if at and in
particular day there has been significant delivery we service volume
and that day becomes a very very important day as far as the stock price
support and resistance is concerned then you have various technical parameters
friends we have designed this in such a beautiful manner that you don’t need a
technical analyst to give you guidance about the support and resistance of the
stock all you need to do is to create a ladder of technical analysis parameters
and see at which price point there are more parameter which is getting
certified if there are more parameters which is getting satisfied in a
particular price range the chances of that stock taking support and resistance
at those parameters becomes extremely extremely high see in this in this
module we have previously open high low close weekly open a high low close
monthly open high low close 52-week high low close simple moving average which is
five-day 20-day 1,500 200 exponential moving average and then you have pivot
points Bullinger burns and parabolic SAR friends I’m a deeply deeply followers of
a follower of these technicals I don’t do I don’t get into a modern very
complex technique and I actually believe in these technical parameters and if you
select a few these depending upon your objective so if you are a short-term
trader and wanted to they three two or five days swing probably you would like
to select previous day weekly high low close and probably simple moving average
for your judgment about where the stock can take support
but if you are trading for the purpose of say a month or a two month position
then probably you like to see 52-week high low close simple moving average and
probably parabolic SAR to look at the trend in the stock price at this moment
so this ladder is actually pretty much a sum up of the various support and
resistance levels which can help that stock to take to take immediate support
or to go to the next level one more concept I want to discuss in this is a
52-week high so 52-week high zone the buyer zone is essentially 52-week high
minus 15% so that’s the top range where the buyer is always available to buy
that stock and similarly 52-week low zone is 52-week low plus 15% so that’s a
seller zone so what is all the stocks who are at a bias zone typically will
always be going will will always go up and typically stocks which are in a
seller’s zone they are the one which will always see selling pressure so one
should always buy the 52-week high stocks and sell later and vice versa in
case of a 52-week low stock its classic cases reliance right now which is near
its 52-week high zone so if you two-week high is 1329 if you calculate a minus
15% it would be around say 1100 and the stock price is 1292 till the stock is
trading near 52-week high zone this is a good stock to buy so when I say it’s a
good stock to buy that means as a trader you should always look at the position
to initiate a buy by first and then square up you should never go short in
these stocks because there is a huge huge momentum to buy this stock because
of their inherent characteristics of bener in a bullish zone or in a bias
zone so apart from this technical level ladder you also can have a look at the
various technical indicators so these are in one-step advanced indicators
which are giving you some indication about the momentum associated in that
stock and if you don’t know about these indicators the beauty of stockage is
that we have embedded learning as part of analytics so just press I and you
will get an understanding of what the Cindy
is all about and then you can also click on the video which is available in each
tab and this video is a five minute video which will teach you what RSI is
or what are what are the indicators is and maybe you can make a judgement on
the momentum associated with that stock based on the indicators which is
available now moving on from technical now technical is more relevant for
people who are looking for a short term trading approach it is in a stock now
from a fundamental perspective if you are an investor you’d like to see how
the company has been performing right and fundamentally you can look at
various parameters to arrive at a judgement about the company first in the
foremost you should know what the company is doing so we have something
called show profile which gives you a complete understanding a brief
background about the company and the kind of product they have been
developing the time and associated with that company know it apart from that you
can go to a sector you click on the sector so you can do a peer group a
comparison of other companies associated in that particular sector based on
market cap PE price by book that equity return on equity return on capital
employed so this is a beautiful section where you can see whether this company
is looking expensive or cheap from a peer group comparison perspective or you
can also do a industry wise so there will be a sector and there will be
multiple industries inside that sector quickly if you want to go to the company
website and do a detailed research and company website you don’t have to really
go to any desktop for that you just click here and you can directly go to
the company website which will help you to get an
understanding about the company in a larger depth if you at all intend to do
that there are some data points which are commonly used data points in our
every day’s market life like EPS like price any multiple industry PE book
value per share these are live data points as one yesterday so these are
actually updated data points which takes into account the latest annual for
latest filing by the company so when I am talking about EPS I am talking about
EPS for last four quarters cumulatively here right so there is a difference
between trailing EPS and annual EPS 20 PSS last four quarters
summation annually PSS last reported EPS as per the annual submission that will
be available in the other section then you have exhaustive research result tab
where you can click on any graph and you can see how the company has been
performing on a quarterly basis half ele whistles or on an annual basis based on
these profit and loss account statement and then you can actually do a ratio
analysis you know in when we were studying in our academy 3 we did ratio
based on various criteria like return ratio efficiency ratio growth ratio
solvency ratio and each category of ratio was talking about certain ratios
which are trying to talk about something about the company for example return
ratio return on equity so this company on a consolidated basis see this is on a
consolidated basis generates and return on capital equity of twelve point nine
five percent right now there is a lot of subjectivity involved in this for your
calculation of rahu ye my calculation of ROI can be different as well as you
would like to know where the numerator is contributing to higher RV or the
denominator is contributing to the higher our OE what we did very nicely
was we actually gave you both the numerator and the denominator trend this
is helping you to really understand whether the performance increase in the
company has been contributed because of numerator or the denominator of the
company apart from these ratios we are some really really nice ratio for
example efficiency ratio which talks about the working capital cycle look at
the working capital cycle of this company it’s minus 42 that is so
impressive so literally company is actually not requiring fund to do
business they have enough money getting generated because of their working
capital efficiency apart from the fundamental data points you have annual
report here presented in a fantastic manner in a very very interactive manner
look at all three balance sheet P R and cash flows so let’s go to cash flow and
this is one of my most the important financial statement if I
want to make a judgment on any company so in cash flow you go inside the cash
flow so you click here you can go inside the cash flow and you could you go
inside the next change so this will give you a clearly an idea that how the
company is generating cash inside the business so his cash flow operation is
so much cash from investing is so much down and cash from financing is so much
down this clearly means that company is generating enough cash to be redeployed
for investment purpose let’s go inside the cash flow operation and let’s press
all ears you will see the trend associated in
this company as far as cash flow operation is concerned this is
phenomenal the company is not just making profit
but the company is also generating cash from its profit that means the company
is and rating profit and not parking its profit in debtors or inventory
eventually the profit is getting into cash which is the most critical because
the cash helps you to do follow-on capex and for your following expansion into
the business now let’s move on from annual report to shareholders because
shareholders are the very very critical audience who would give you an
understanding of the character of the promoter or the character of the people
who have invested in this company if you see the promoter shareholding it has
been pretty much static it has gone up in the middle and now again it has gone
into the flat is own that means promoter is very very confident about the company
and then you have institutions and retail shareholding as well here which
is giving you an idea of what kind of interest this company has generated over
a period of time we also have given you name of all the shareholders including
the promoter in the company and by this name you can actually see what kind of
people have invested in this company and not just today if you have actually
given you last five years data now you can actually compare that in 2011 who
were the investors and as on today were the investors in this company and one of
the most beautiful feature of packages that if you click on any of this
investor you can actually see the list of all the companies in India where this
investors are also invested and their shareholding in that company in a
passing thumps that’s a phenomenal value
addition which we are giving to all of you then we have board of doctor named
all the people who are board of directors the company and and also it
will give you an idea about the kind of people who are associated with that
company because ultimately a company is run by the board obviously there is an
entrepreneur he is leading the board but still the board composition becomes a
very very important thing the latest addition for us in this app is the conch
all details unfortunately this company doesn’t give
Khan calls and also the investor presentation so you can click right
there and you can go through the investor presentation mr. presentation
gives you an understanding of what this company is trying to do whether this
company is trying to expand in the right way or the wrong way lot of corporate
governance aspects lot of software aspects related to the company can
actually be gauged from the investor performance report which the company
gives on a quarterly basis then the company if the company is into or
derivatives then there is a open interest which we have been we have
shown here if you see what a beautiful presentation if we see in November open
interest was around say four zero seven contracts approximately once everyone
who and if for corrodes contracts right and if you see open in 2000 today is
almost five growth that means more open interest has build up from 1150 price to
1310 that means there have been significant long position in this stock
more people are betting on this talk on derivatives for a long position now this
gives you a different level of comfort that yes overall market also believes
that this talk is long so I should also be long in this talk or rather I should
say I should try to figure out an opportunity to always go long in this
talk first and then square up later do not go short in this talk because
that can be counterproductive then for people who want to take some judgment
from options we have options chain also I don’t want to cover options in detail
because that’s a separate video which I will be recording in future but this
chain also gives you a fair understanding of what people are
expecting from this company we have developed some incredible tools which is
giving you and immediate impression about a company so
look at this presentation which talks about what are the various parameters
which is getting satisfying the company so as on yesterday these were the
parameters which were satisfying the company so this is all mostly green
parameters that means this is a clear indication of this talk doing good over
a shorter period and also the fundamental parameters that what are the
performances parameter of the company fundamentally which can help you to make
a judgement about this company right that for a short term medium trader you
would like to know the various deals blood boil deal block deal and insider
deal which is happening in that company because ultimately insider activity
gives a first-hand impression about what the management or what the core people
inside the company are thinking about the pricing of the stock if there are
more insider buying happening there is a high chance that stock price will
outperform if there is more insider selling happening there is a high chance
that possibly the stock will stop performing now towards the end I know
there are a lot of things which you have covered so they just like to moment it’s
towards the end we give you all the news for last 5 years related to this company
all the corporate announcement from the company which has been given to both the
exchanges I all the corporate actions like dividend split anything which has
material impact on the price has been mentioned therefore last five years and
if suppose we forgot anything and we have not presented you which is a seldom
thing I don’t think so we have done it but if we suppose forget anything then
Google will not forget and we have given the complete news track which Google
feed is has been able to give to all of us when with Google of all realized
industries and the last is you as a prudent investor you will not like to
buy at every price you would like to wait when the right prices release so
you can give an alert say I give an alert that you add you only inform me if
the stock actually move beyond a certain certain price and the you can add the
alert accordingly this alert will sorry there’s a problem here yeah
so the alert is this whenever the stock will cross 1300 the alert will be there
more than the active alert wherever the stock price actually
reached the earlier alert it is shown as a hiss particle so you know last time
this alert was released to me when when 1200 price was breached and then I acted
accordingly so this is the trend this is a pretty long video but this is pretty
much summing up the complete 360-degree understanding of a stock if you want to
do trading you can focus on parameters which are relevant for trading if you
want to do investing you can focus on parameters which are relevant from an
investment decision perspective after this probably you will have to just take
a call on the company or based on your objective if it’s a very short-term
objective you focus on price and if it’s a long-term medium to long term
objective you probably would like to add more parameters for the decision making
and largely most of the parameters is covered in stock attack so I hope this
video was useful you got an understanding of what are the
parameters necessary to invest or trade in a stock and I’m going to record more
videos and get deep inside those parameters so that you can understand
these parameters in totality and become more learning and independent person to
invest or trade in the market thank you you