All language subtitles for 1. Fundamental Analysis For swing Trading and Long Term Investment

Hello, ladies, welcome back.

In this session, we'll be showing you how to do fundamental analysis.

I know a lot of you do not have time for him today because you might be busy with other things during

the market hours.

If you're one among them who do not wish to watch the market all the time, then swing trading or long

term investment is the right choice for you.

You can apply this method, which we will be teaching in this video, to find stocks for spring training

as well as long term training.

OK, so now before we discuss about fundamental analysis, first let us discuss about the rules.

There are only two simple rules.

Rule number one, invest fixed capital.

So what do I mean by this?

This means I will invest a fixed amount of capital, let's say five thousand rupees, ten thousand rupees,

one lakh to lack any amount as your capacity.

Once you decide a fixed capital, you need to have a dedicated trading account for this.

If you're doing intraday, I suggest you not to use the same account for Suyin trading.

OK, this is because if you have this capital in the same account in which you are doing intraday trading,

there are high chances that you will use this fixed capital amount which you have kept for swing trading

to buy stocks during intraday.

So avoid having this fixed capital in the same account in which you are doing intraday.

OK, this is the first rule.

Now, the second rule is no withdrawal of profits.

Why you should not withdraw your profits.

I will explain why you should not withdraw your profits as we move forward with this session.

OK.

So if you are able to follow the rule number one and rule number two, then this matter I am teaching

you will be very helpful.

Now, let's understand this concept with an example.

So now let's say you're fixed capital for spring training is to like rupee's the STOLOROW piece.

You will divide it into 10 portions.

OK, so Doleac divided by ten is twenty thousand.

Right?

So I will make ten columns like this each column.

Twenty thousand rupees.

Now, let's say you got to break out an A.C. bank and you'll want to enter the trade, you will use

the amount which is there and call them a.

Which is twenty thousand rupees.

Addressed every column, you will market green or any color you want, the market green, which means

free cash.

I have so much cash with me even after investing in HDFC Bank.

OK, now let's say after seven to eight days, you got 10 percent profit on the 20 thousand capital

you invested in HDFC Bank after brokerage and taxes.

How much will it be?

Twenty two thousand.

Correct.

That amount will update it after this.

You saw breakout and supply.

Now you will use this twenty two thousand and Zoopla, right?

Twenty two thousand.

Because as a rule number two, rule number two says we should not withdraw our profit.

We will have to use the profit and reinvest.

So what are we actually doing?

We are adding our base capital.

Along with the non-profit and enlisting this so that the profit which we reinvest will bring in more

profit for us.

OK, this method is called compounding growth.

What is it called compounding growth?

So long story short, if the column is busy, then you will invest in Colombia.

If Colombe is busy.

You will use the funding column.

Likewise, we will give chance to all the columns, there are two major advantage in following this

method.

First one is there is no need to go to your broker's account and see what is your capital, because

this shit has all the necessary information that you need.

Just see the column and you will know how much money is invested and how much free cash you have.

OK, now the second advantage, if you follow this method, you would always have at least 30 to 40

percent of free cash in your account.

It is very important that you do not invest all your fixed capital.

You should have a certain percentage of free cash in your account for emergencies.

Let us say that a surgical strike or currency ban or any other situation which affects the stock market,

you can use the situation to your advantage and grab opportunities.

Basically, during the time when the market is making one side more, you need to have funds to buy

them.

Right.

So if you have 30 to 40 percent of free cash with you, you can always use that to grab good trading

opportunities.

OK, now let me show you my data, which I have maintained during 2009.

Traders, I'm not doing any swing trading because of the busy schedule, but the data which you are

seeing right now will give you an idea as to how you need to maintain.

OK, see, sixteen thousand capital became forty two thousand.

Twenty eight thousand became seventy one thousand.

Thirty four thousand became sixty four thousand.

The stock is still in trade, twenty two thousand became eighteen thousand.

I lost someone in the street.

OK.

And three thousand became fifty one thousand.

OK, now, traders, how many stocks in this list do you have in your watch list?

I'm sure that most of you wouldn't even have heard about these stocks, right.

How did I find these stocks?

I will tell you, there are two ways to find stocks.

The first one is through Tretyakov.

So this is my trade tiger account here.

If I go to Tool and click on Best 20, the system will filter out and give me 20 best stocks out of

these 20 stocks.

I will consider the stocks, which are more than one hundred rupees and stocks less than that amount.

I will not select because I feel the stocks, which are less than one hundred rupees returns, are very

less.

Sometimes the movement will be 50 percent to one rupee, which I don't think is attractive.

So after filtering out stocks, which cost more than one hundred rupees, these are the final stocks

which I have chosen from trade Tiggers Best 20 stock list, the same stocks I have added to my watch

list.

OK, now, before we discuss how to do fundamental analysis for these talks, let us understand why

we selected stocks.

We selected stocks not just because they have given breakout.

The main reason is when these stocks could breakout, they increased by five to 10 percent.

Is this the first time this dog apricot, no.

It's going to break out here.

It's given Prikhodko.

It's given Briguglio.

And if you choose the stock.

Continuous three days rally and the future, Kristie.

A rally here.

Or you can check the stock.

A rally here.

Increase here.

Again, it's trying to rally here, if you're planning on shorting the stock, then you have to go for

futures, right?

Only with futures.

You can sell first and buy later.

So if you had seen this breakdown and entered the street more than 40 to 50 percent, it went down.

So all these stocks have very high potential of moving up or down on a frequent basis.

It's very important that you learn how to find breakout or breakdown that we have clearly mentioned

in our courts.

Right.

And all the strategies we have told you how to find breakout or breakdown.

I'm not randomly telling you you had a shorting opportunity here.

If you see this trend, this trend has one of the strategies from Marcus, right.

If you are checked out, of course, you clearly know that we had a shorting opportunity because here

one of our strategies works, right?

So likewise.

You can either use your own strategy or the strategy, which will teach you.

OK, say again, the stock made a big rally here.

Can you get up to this?

The advantage that we have when we select these stocks are trading session will complete in just two

or three days.

Most of the time, there is no need to hold a stock for a month or so.

The second way to find breakout stock is through a trading tool called Chatting.

I have a video called How to Select Stock for interest in that.

I have clearly explained how to find stocks using charting and that you will find trending stocks.

OK, so you traders, if you don't have to Tiger, no problem.

You can use chatting itself to find stocks.

To be honest, in chatting you will get even better results.

So have a look at that.

OK, now just because Tiger give us a breakout of breakdown stocks or chatting, give us breakout Bricktown

stocks.

We will not just go and buy or sell before buying any stock.

There are four important things we need to look at.

Only if these four things looks fine, then we can think about investing in the stock.

These four things.

What we are going to look at that is a fundamental analysis.

OK, now traders, can you see this list, this list as all the stocks, which is that in our stock

exchange, OK, and in this section we have from which industry these stocks are from like I.T. software.

Pharma, chemical, textile.

Oil extraction, cement, plastic products, shipping, all the stocks from all the sector will be in

this list.

OK, now let's say tomorrow morning you watch the news and you got to know sugar industry is doing well.

OK, so what do you have to do to click on this?

Here you need to search for sugar.

And you will get the list of all the sugar companies which is listed in the stock exchange.

OK, traders, can you see one column called?

Chuckling So what we use this link for us example.

All this a sugar company right now, let's say you want to check if there is breakout and rain sugars,

OK?

Just click on this link.

You'll be taken to the chuckling website.

OK, so here's what you can do.

You can check.

You can check for breakouts, OK?

There's no breakout in this.

You can check for other shugar industries.

Also, if I choose Rahner shugar and check.

Here, there is a possibility for a breakout, right?

Likewise, what you can do is you can check for Breakout directly, go into the chart using chuckling

We need to know the breakout because we need to enter the trade during the breakout rate so that we

make maximum profit into the trade quickly and exit the trade quickly.

We need to enter trades when there is a breakout of Bricktown.

OK, break down when you're working on futures.

And now just because a stock breakout, we will not enter because we are doing swing trading and long

term investment.

So we need to check the fundamentals of the stock.

OK, so there are two ways to check fundamentals.

The first way is through market model with market model.

Getting to know the fundamentals of a company can happen very quickly.

OK, but the problem with market mojo is it has a monthly fee.

Initially you will have five times trial.

You can trade with five or six stocks.

They will give you some trial.

After that, they will charge it somewhere around thousand five hundred rupees also.

OK, so if you are interested, the easy way to check.

Now, let me quickly check for one company and show it to you.

OK, now let's say I search for Axis Bank.

Axis Bank as I click on this link.

I've been taken to Market Mujo website.

OK, so how to do fundamental analysis, we will see this is a simple way of doing fundamental analysis.

OK, now here you can see for section one is quarterly financial trends.

Another one is technical.

Another one is quality.

Another one is valuation.

OK, so let's not get confused about what is written here.

Flat.

Good.

Fair.

Mildly bearish, mildly bullish, whatever it is, we don't care anything about that.

OK, the first thing what we need to do is we need to ignore the section.

The technical section, OK, why we need to ignore.

Because we are price action traders, the stakes are as they might be, all those things into consideration

and it gives technical analysis, all those indicators is not useful for us because we are price action

traders.

Correct.

So we will completely ignore technicals.

OK, remaining, we have three sections, one, two and three.

Correct out of this.

Now, let's say quarterly financial trend.

This section is green.

If it is green, then we say, OK, 50 percent confirmed this stock is good.

OK, this has to be green, apart from this, any one from these two, if it is green, then we say

this is a good stock.

Fundamentals is good about this stock.

OK, see, traders are doing fundamentals is not that easy.

But when it comes to market module, the way how they do fundamentals is very good.

It's very reliable.

So you can depend on this.

OK, but if this only is red, orange, yellow, whatever color it is, apart from green, immediately

we will see the stock is not good for swing trading.

It is better not to invest in that kind of stock.

OK, so this is a simple way.

Quickly, you can get all the information that you need.

OK, but market model is expensive, right?

Because it's expensive.

A lot of people might not be interested in this.

That is why we have screen Adut and Linko.

If you click Screener Dotan for access back, you will get the fundamentals of access bank OK, in this,

there are four factors which you need to consider.

So let's discuss about all the factors one by one.

OK, now let me take panish sugar as an example to understand fundamental analysis.

OK, I will try to explain all of these metrics in a very simple tone.

I will tell you at what level you can consider the stock and at what level you cannot consider the stock

for swing trading.

OK, so the first thing we need to look at is speculation to earnings growth ratio or peg ratio as a

stock valuation metrics.

This metric help us to know the growth potential of a company.

This will tell us if the company has good growth potential or is the company already reached the growth

level?

We can also know if the company proprietor's has interest in growing the company any further or not.

OK, now if the peg ratio is between plus zero to plus one, we will see that this company has potential

to grow.

OK, like zero point to zero point seven zero point five zero zero point nine nine anything for that

matter, if it is between plus zero to plus one, we can consider that stock.

If the stock peg ratio is lesser than plus zero, like minus zero point one minus zero point five seven,

whatever ratio below zero, we will see that this stock has no potential to grow as per the PANKRATION

metrics.

And if the stock peg ratio is more than plus one, then we will see the stock has already grown enough.

There are chances that this stock will not grow any further, or even if it grows, the growth percentage

will be very low.

Now, if you see the stock, the peg ratio is zero point one one.

So we can see the stock has potential to grow so we can consider the stock only as the first metrics.

OK, and just in case, if the payout ratio is not visible for you here, you have an option called

a ratio to table right here.

If you enter BTG, you get a peg ratio.

OK, and I think what I'm seeing in this video, if it's not visible here, if you enter that here,

you will find it.

OK, so the second matrix which we look into is pledged percentage pledge.

What do they call it in Hindi Greevey Rachna, they say.

Right.

That's called pledging.

Now we know all the company has proprietor's.

Correct when the proprietor's pledged their share of the company and take loan from the bank and return

and use this money for something else.

We call it pledging.

But why will the proprietor pledger shares any idea?

It's not because the company needs more money.

If that was the case, they will issue right and introduce fresh stocks to the public or existing shareholders.

From that, they can easily make money, right?

Issuing new shares.

They'll make money.

Correct.

Or if they do not want to issue fresher's, then they can take loan from the bank.

But without doing this, if the proprietor is pledging your shares and taking money and investing somewhere

else means he's losing confidence on the company's growth.

Trader's proprietor is a board member of a company.

Correct.

He will be a part of all the internal discussions.

Then, of course, he will know all the information's first correct during the board meeting, any time

he will get to know all the information before the public knows.

So if the proprietor pledges a share, then it is a caution that there is something fishy in the company.

We should avoid that stock.

If the pledge percentage is less than 10 percent, then it is fine because some proprietor's pledge

this year and with the money they get, they will use it to run new businesses or parallel companies.

Correct.

But if the pledge percentage is more than 10 percent, we will avoid.

OK, this is a second validation.

Now, let us see the third validation.

We need to check cash flow, OK?

For any company to grow, it needs regular cash flow, correct?

Only when there is a continuous cash flow, the business will run smoothly.

A company will always have expenses like salary, rent, maintenance and lot of other expenses to run

day to day business.

Correct.

And even if they want to do any kind of innovations, anything, for that matter a company, if it wants

to reach to the next level, it needs to be more innovative.

They need to maybe create more branches and all those things.

Right.

So for that, they need cash flow with them without having liquidity.

Can anybody grow?

So it is very important that end of a financial year, a company has enough cash flow.

If a company has enough cash flow, then we can think like, OK, this company is a bit secular.

It has little funds with them so that in case they have more expenses, it will be taken care of with

the cash flow that they have.

They need not lend from someone or take loans, anything as such.

OK, now how do we check cash flow as the company has to have positive cash flow for the latest two

years?

So these are the latest two years.

Twenty, twenty, twenty, nineteen, the year before that, we do not worry, but the latest two years

at least, the company has to have positive cash flow supernational recent year.

They do not have enough cash flow.

Right.

So this can be a problem.

So if a company's cash flow isn't positive for at least the latest two years, then we say this company

has enough cash flow to take care of them.

So there is potential to grow.

So when a company grows, what happens?

Obviously, the value of the company increases.

If company value increases, what happens are stock value increases.

If stock value increases obviously will make more money.

Right.

So it's really important that we see cash flow, not the final validation.

This market cap, OK, market cap means the value of the company that is traded on the stock market.

For example, if you want to check the market cap of a company, you need to multiply the total number

of shares of that company by the present share value in the stock market.

Companies are grouped as per market cap that is small cap, mid-cap large cap and ultra large cap.

But to make things simple to understand, I have made small changes.

OK, now this is how I will group the stocks as one market cap.

Any stock was market cap is from zero to two hundred crores.

They fall under microcap from two hundred to two thousand crore.

The stock fall under SmallCap from 2000 to forty thousand crore.

They fall under mid-cap.

Any stock whose market cap is more than 40000 crore, they fall under Large-Cap.

OK, now if you go and check for Sugar Panish, you go.

Market cap is one focus.

OK, that means it falls under microcar.

OK, when you find a breakout in Perny Sugar, you will not go and enter the trade before you enter

the trade.

You need to see how the index is performing.

OK, so for example, panish you go for Thanda Microcap but there is no separate index for microcaps.

So we will check SmallCap one hundred.

Now this is an index index means it has got one hundred companies which are there in SmallCap and it

tells us the overall performance of the small cap companies, just like how Nifty 50 shows the overall

performance of Nifty 50 stock sameway nifty small cap shows overall performance of the small cap companies.

When you get a breakout and pony sugar, you should also see that the small cap index is also giving

a break.

For example, if I draw a trend line like this, OK, and I'm getting a breakout here in nifty small

cap country at the same time, if I get a breakout in sugar, then there is high chances that for the

stock price to go up, OK, we need to use even the index as a confirmation signal to enter the trade.

So if you get a breakout in Pudney Sugar and you also get a breakout in the small cap index, what do

you think will happen that the high chances for the market to go up?

But if you see a breakout and punished but the small cap indexes and consolidation at that time, there

are high chances that the market can go against you and hit the stock.

Plus, OK, so it's very important that we check the market cap of the company and see under which category

of market cap it falls is a small cap, mid-cap or large cap, and then we need to go and check the

index of that particular stock.

Now, let's say a potential market cap, for example, is two thousand five hundred crores.

OK, if the stock is two thousand five hundred close, it falls under midcap.

Right.

So what we need to do, we need to see Nifty Mid-cap Hundred.

If Nifty Mid-cap Hundred is performing well and giving us a nice breakout, then there are high chances

even for one Nishioka to perform well.

OK, traders, I hope your understanding my point.

If the market cap of a particular company is under SmallCap, then we need to see how small cap index

is performing.

If the stock is a mid-cap, we need to see how mid-cap index is performing.

OK, this is how we check.

It's very important that we checked this before we entered the trade or else that high chances for the

market to go against us.

OK, now traders, if you're trading in nifty 50 stocks and the time frame in which your trading is

less than a daily timeframe, that is if you're trading on 15 minutes, 30 minutes, one hour, 120

minutes or daily timeframe, if you're doing swing trading in nifty 50 stocks and these timeframes,

then there is no need to check the fundamentals because these stocks came into Nifty 50 only because

these stocks, all the thorough research has been done.

Only then the quality stocks has been picked and put in 50 50.

So the market research has already been done here.

So 15 minutes, 30 minutes, one hour, one, 20 minutes and daily time frame, you can do swing trading

with a nifty 50 stocks without doing fundamentals.

But if you're trading on nifty 50 stocks on a weekly timeframe, then fundamentals is needed.

Why?

Because you're keeping the stock with you for a longer duration.

So it's important that you do the fundamental analysis.

OK, now, if you're trading in micro-cap, small cap and mid-cap stocks all the time frame, you need

to do fundamentals, right?

All these are small stocks.

It is important that you do thorough research because we do not trust these stocks.

Right.

So if you're working on micro-cap, small cap and mid-cap stock, do not do swing trading without doing

fundamentals.

OK, and by the way, there's no point in trading on micro-cap, small cap and mid-cap on a lower timeframe

because let's take panish as an example.

Can you see random selling against random selling, random buying a big quicks here?

So when you trade with small stocks on a lower timeframe, the movement of stock cannot be predicted.

OK, so what kind of movements these are?

Right, but if you trade on a weekly timeframe, at least now you're getting a better idea of how the

market is moving, right.

So when you're trading with microcaps SmallCap and midcaps, it's better you trade on a higher timeframe.

OK, now, traders, you know, I am a technical trader.

I feel these four fundamental validations is more than sufficient for me to choose stocks for swing

trading.

The importance I give for this 10 percent, that's 90 percent completely depends on technical analysis.

I rely more on technical analysis in a price action lecture series.

Course, we have explained all the technical strategies which we use to trade.

A lot of fundamental traders check many more fundamental data to choose the right stock for swing trading.

But this is how I do, and it has given me very good results.

I rely more on technical analysis in a price action lecture series.

Course, we have explained all the technical strategies which we use to trade.

I have shared the multi by the Excel sheet link and thus we do.

You can go ahead and download it.

It will be very useful for you traders.

I hope you have enjoyed the session.

That's all for this we do.

I'll see you on the next one.