In fundamental analysis, ratio's have always been a popular means of determining the current and future trend of a script in the market. Based on the value of a ratio and its comparison with the ratios of other companies in the same peer group or sector, analysts determine the true worth of a script and if it is over valued or undervalued at the current period of time. It is on this basis, which encompasses several other factors like bottom lines, profitability that a fund manager determines the true worth of a script.
However when the sentiment is driven down, and the technical momentum is lost, even a fundamental script would be unable to perform in a given market condition. On the same lines, an overpriced script, although having technical momentum is sooner or later likely to trap the investor if the script is overpriced. The key to unlocking the right script is in identifying a stock that is:
o Fundamentally Under/Correctly priced
o Technically gaining Momentum
o Is ripe on positive news likely to emerge soon
o Is expected to pose good results
o Has a favorable stock holding pattern
o Is in the right sector
o Has the institutional buyer's favor...
and so on.
However when the sentiment is driven down, and the technical momentum is lost, even a fundamental script would be unable to perform in a given market condition. On the same lines, an overpriced script, although having technical momentum is sooner or later likely to trap the investor if the script is overpriced. The key to unlocking the right script is in identifying a stock that is:
o Fundamentally Under/Correctly priced
o Technically gaining Momentum
o Is ripe on positive news likely to emerge soon
o Is expected to pose good results
o Has a favorable stock holding pattern
o Is in the right sector
o Has the institutional buyer's favor...
and so on.
