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Stock Analysis

Stock analysis combines fundamental and technical methods to evaluate whether a stock is worth buying. Learn how to analyze NSE/BSE listed stocks and global equities.

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Fundamental Stock Analysis

Fundamental analysis evaluates a company's financial health to determine if the stock is undervalued or overvalued.
Metric What It Measures Good Range Notes
P/E Ratio Price / Earnings per share 10-25 (varies by sector) Lower = potentially undervalued
Revenue Growth YoY revenue increase 15%+ for growth stocks Consistent growth is key
Net Profit Margin Profit as % of revenue 10%+ is healthy Higher = more efficient
Debt/Equity Ratio Company debt vs equity Below 1.0 preferred Lower = less financial risk
ROE Return on Equity 15%+ is good How efficiently management uses capital
Promoter Holding % held by founders 50%+ is positive High holding = confidence in company

Technical Analysis for Stocks

  • Use Weekly and Daily charts for swing trading (3-30 day holds)
  • Mark major support and resistance levels on the Weekly chart first
  • Look for stocks making new 52-week highs with high volume — momentum stocks
  • Breakout from base patterns (cup & handle, flat base) are classic stock setups
  • Relative Strength: compare stock performance to Nifty/Sensex. Outperforming = strong stock.
  • Volume on breakout: at least 1.5-2x average daily volume on the breakout day

NSE/BSE Specific Knowledge

  • F&O segment: Futures and Options on 200+ stocks — requires separate margin
  • Circuit limits: 2%, 5%, 10%, 20% — stock is halted at these levels for 15 minutes
  • Settlement: T+1 settlement in India (trade today, money credited tomorrow)
  • FII/DII data: Foreign and Domestic Institutional data shows big money flow — check NSE website daily
  • SEBI regulations: India-specific rules for trading, pledging shares, position limits
  • GST on brokerage: 18% GST applies on brokerage and other charges in India

Pro Tip: Focus on the top 50 stocks in Nifty 50 and Bank Nifty initially. These are most liquid, have tightest spreads, and have the most F&O volume. Avoid illiquid small-cap stocks as a beginner.

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Fundamental Analysis
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Key Takeaways

  • Combine fundamental + technical analysis
  • P/E ratio compares stock price to earnings
  • Revenue growth shows business health
  • Sector analysis: which industry is hot now?
  • NSE/BSE circuit limits prevent extreme moves
  • Use weekly charts for swing trading stocks
  • Earnings reports cause huge price moves
  • Always check promoter holding and FII data

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