Analysis of Stock/Share Basic

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Analysis of Stock/Share

There are two ways to analyze stock/share. The first one is technical analysis and the second one is fundamental analysis. Technical analysis is an analysis of charts that means the study of technical parameters like chart patterns & candlesticks patterns. Another side of analysis is a fundamental analysis which means the analysis or study of company financials, management, also economy & industry which is also known as EIC ( Economy, Industry & Company).

Ways to do Analysis of Stock/Share –

1. Technical Analysis = Technical analysis is nothing but the study of stock charts. There are different types of charts like line charts, bar charts, candlestick charts, and many more. Candlestick charts are more often used in technical analysis. Technical analysis includes the study of single candlestick patterns like Dojis, Marubozu, Hammer, and many more & multiple candlestick patterns like Engulfing, morning star, evening star, and many more. Also, it includes different indicators, support & resistance. Also, there are different chart patterns like Head & Shoulders, Triangles, double top, double bottom, and many more we will discuss all this in detail in the future. In short, it means the study of past performance and from that predicting the future performance.

2. Fundamental Analysis = Fundamental analysis is more complicated than technical analysis. Fundamental analysis includes the study of economy, industry, and company. Company analysis is not that complicated but it needs a good understanding of financial terms. Company financials include Balance Sheet, P&L Statement & Cash Flow. The balance sheet tells us what the company owns & what the company owes. P&L Statement tells the performance of a company within a year or a quarter. Cash Flow tells us the inflows & outflows of cash of a company. Also, there are different terms & ratios like profitability ratio, liquidity ratio, solvency ratio, turnover ratio, & earning ratio. We will discuss all these topics in the future.


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