Essential tool Stock Research

Technical Analysis is a tool for stock research. It deals with the forces of supply and demand for shares as reflected in the behavior of the market.

Game Plan of technical Analyst is If the market price is going up, buy.If the market price is going down, sell If the market is steady, wait Based on market condition, you can create an upward pyramid or down ward pyramid. Pyramid technique is buying the share at different time while value is going up or down. Investor can increase/ decrease the average value of his holding.

Dow Theory is one of the most popular technical theories. Vocabularies of technical Analyst Market Average, Trading volume, Advance-Decline line, New Highs and Lows, Odd-Lot Trading, Short interest.

Top 5 Stock Research tools is use in 2006

What is Value Investment in Stock Market?

Value investment is all about to buy stock with tremendous potential but currently out of favor. Return will be manifold when the market corrects its error in valuation.

“Wide diversification is only required when investors do not understand what they are doing.” - Warren Buffet

Principle of Value Investment

Share price should be no more than two-thirds of intrinsic worth.

P/E ration should not more than 20 and check it with other companies in the sector.

PEG Ratio = (Price/Earning Ratio / Annual EPS Growth)

Stock price should not be more than 1.5 times of book value.

Debt/ equity ratio should be less than.

Current Assents/ Current Liabilities =2

Dividend Yield should at least be 1.2 of the long-term AAA bond yield.

Earnings growth should be around 10 % per annum compounded over the last 10 years.

Good sales turn over, good collection rate

Management should be dedicated and always focus to cost cutting.

Where to FIND more information on Hot Stock