Although technical analysis and fundamental analysis are seen by many as polar opposites - the oil and water of investing - many market participants have experienced great success by combining the two. For example, some fundamental analysts use technical analysis techniques to figure out the best time to enter into an undervalued security. Oftentimes, this situation occurs when the security is severely oversold. By timing entry into a security, the gains on the investment can be greatly improved.
Alternatively, some technical traders might look at fundamentals to add strength to a technical signal. For example, if a sell signal is given through technical patterns and indicators, a technical trader might look to reaffirm his or her decision by looking at some key fundamental data. Oftentimes, having both the fundamentals and technicals on your side can provide the best-case scenario for a trade.
Neither fundamental analysis nor technical analysis is more superior than the other. Both have their merits and should be used at the right times.
Whether you consider yourself a fundamental analyst or a technical analyst or vice versa, your primary goal should be to gather as much relevant information as possible. While the debate between fundamentals and technicals will not be resolved any time soon, when it comes to successful trading strategies, the best approach is to be as informed as possible and to employ a methodology with which you are comfortable and provides you with consistent and favorable results.
Nice discussion. In my opinion fundamental analysis is far easier for individual investors. There are lots of software and e-broker sites where you can enter fundamental and technical analysis parameters and liquidity parameters and the software will report the stocks that can pass that conditions, or you can do it manually from annual reports
An example of conditions I use for mid cap stocks is Minimum Reporting period > Dec 2009 Return on Equity > 10% Return on Assets > 8% Return on Asset Growth 1yr > 10% EPS Growth 1yr > 24% Revenue Growth > 14% (PEG Ratio > 1 OR PE_Discount_to_Industry_Average > 5%) Avg Daily Traded > 100 * proposed investment Market Cap > 5000 * proposed investment Adj Profit pre-tax growth > 20% Div Yield > 1% Dividend Imputation credit or Franking credit = Any [UK, Australia and NZ only] Share Price > 20 Day Exponential moving Average Price Prem/Disc to Broker Consensus Tgt (%) < -5% Average of all Broker recommendations =< 3 (1 = strong buy 2 = buy 3 = hold 4 = sell 5 = strong sell) CONDITION Number of brokers >= 3 CONDITION Broker analysis date > DEC 2009
The problem with technical analysis is that there are too many indicators for individual investors to understand, and often the pattern is in the eye of beholder, and different indicators give contradicting signals. ONE famous quote from Mr Buffet on charting "I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer."
However personally one indicator that I like is the Darvas Box Scanner which is automatically detected without interpretations.
Sterlite Industries 676- As long as it trades below 687, it is vulnerable to selling pressure. Minor supports at 607-601 & major support only at 532.
687-762 is no trading zone / neutral zone. i.e. from neutral zone stock can take any direction up or down. Hence, to take a trading decision, it should breach lower band or cross upper band. If stock breach lower band, falls or if crosses upper band, become bullish.
Panoramic Universal 174- Unless it crosses 212, witnesses selling pressure. Minor support at 123 & major support lies only at 52!
212-265 area is no-trading zone or neutral zone. If breaches lower end, steep fall or crosses upper end, it may rise.
The shareholder is not getting anything free. Both bonus issue and stock split do not do anything to add any ‘real value’ to the stock. It is only the improved liquidity (due to more number of shares) and tradability (due to more affordable prices) that can give some kick to the stock. Rs.676 stock may appear 170 or Rs.174 stock may appear Rs.28.
Warren Buffett, the legendary investor and world’s second richest man, does not believe in these gimmicks. He has, therefore, never gone for bonus or stock splits in his company Berkshire Hathaway; even though a single share of the company is traded at very high price and hence out of reach of an ordinary investor. His value investing methods are no secret. But they require a lot of discipline and patience, which unfortunately most of us lack.
Punj Lloyd, India Cements also for medium-term. These are oversold technically. You croos-check with analyst reports in web-sites & financial dailies (Business Line, Business Standard, Economic Times) to know their fundamental value.
Most of the times, fundamental analysts don't recommend stocks that are really cheap but facing some temporary problems. Price reflects everything. They are facing problems hence, available cheap. When they start to move up, people will chase. Anlysts start recommending at high levels for higher targets. You are not getting metal stocks cheap, because commodities are booming. That reflects in their price.
If Standard Chartered IDR falls below 94 (of course, after checking in charts), I will buy irrespective of their problems like taxation, liquidity etc. Because, I will have 35% upside potential. Getting 35% upside potential for large-caps stocks is really hard in market.
I applied for IPO at Rs.100 & hence, out of the race.
It is important to buy in two instalments. Normally, cheap stocks become cheaper & costly stocks become costlier.
IMPORTANT: Don't invest just because your friend told or by seeing SMS, blogs, posts in internet etc. If I ask you to buy anything, investigate & satisfy yourself before putting your money.
Ravi, Bangalore, In accumulating Aban and Suzlon are you following Warren Buffet's mantra of "investing in great companies that are in temporary trouble?" (Secret: I followed you and did some intraday trading in Aban and made some money).
I reiterate that as long as 4900 (technically 4897) holds, every dip is buying opportunity.
Invest 50% at current levels & balance in 5080-4970 zone.
Aban, Suzlon are favourite stocks for medium-term. Invest in two instalments (This is my personal view. Use this as one of your input. Cross-check with other sources before taking investment decision. I am accumulating these stocks & hence, I have vested interest).
Euro crisis may trigger more capital flows into India: RBI Press Trust Of India / Mumbai June 13, 2010, 0:00 IST
India is likely to see more capital inflows as investors may find the Indian market an attractive destination, especially in the backdrop of uncertain global markets, Reserve Bank of India Deputy Governor Usha Thorat has said. “Money probably tries to come to places where it gets better returns. So, from the point of view of capital flows, you do have the likelihood of more uncertainty in the rest of the world and therefore more money coming to India,” Thorat told reporters here. Noting that India was getting increasingly integrated with the global economy, Thorat said this made the country less immune to developments happening abroad. Thorat said the growth in developing countries like India and China had been good, backed by recovery in industry and services sectors, although the country’s agriculture output is yet to pick up.
Euro crisis not to affect Indian market, say Premji, Mittal Several Indian industrialists shared WIPRO Chairman Azim Premji's view that the recent financial crisis experienced by the European Union will have least impact on Indian stock markets and the country's economy. Azim Premji chaired one of the sessions of this meeting that was held on the theme 'Sustainability and Innovations concerning the Indian Industry'. He said that the monetary crisis in European Union had not affected the projected growth of his company and he hoped it would blow over shortly. "Greece is the two and a half percent of the entire domestic product of the European Union. Two and a half percent...and its probably what 0.2 percent...0.3 percent of the world GDP," said Azim Premji, Chairman of WIPRO. He also spoke about the present currency situation in EU that is benefiting the company and resulted in the softening of the rupee as a better currency. FICCI president Rajan Bharti Mittal said that there are no serious problems of concern for the Indian corporate bodies. "I think its very minimal...because, we have also heard the finance minister's statement...their will be minimal impact...we are hoping that this a only kind of constraint and restricted here and it doesn't go around in the European Union. "That will be a huge impact. Today, it will be a marginal persistable impact. I won't say that there is any major concerns," said Rajan Bharti Mittal, President of FCCI.
my 2nd Raambaan OF BIG buying by FIIS HAS happened on day of listing.nearly 1.5 - 2 crores IDRs have been purchased by reputed FIIS like deutshe bank,rbs,abn amro,morgan stanley so retail investors can sit easy n watch steadily this bluest of bluechip stock to consistently grow year after year as it has done for last so many years.
its afantsticc blue chip bank not some sarkari comapny like NHPC OR SJVN so dont sell in panic rather buy on panic.
this bank touched 1842 pence in march april 2010 implying aprice of 127 rs at 69- rs conversion rateafter its superb ist quarter result .it will surely touch this figure in few months n hence assuring fantastic profits to retail investor who are sitting with big margin of safety as they hv purchased at 98.9.
Is gspc ipo opening on 21 june 2010 as mentioned by anil sanghvi on cnbc awaaz!