Stock analysis is used by traders to make buy and sell call. It’s an approach to make informed decisions while investing in stocks. Stock analysis can be categorised into – fundamental analysis and technical analysis. Fundamental analysis is evaluation of data from sources, including financial records, economic reports, company assets, and market share. Analysts typically study the company’s financial statements – balance sheet, income statement, cash flow statement, and footnotes. These statements are made available to the investors in the form of quarterly earnings, disclosures to stock exchanges in compliance with the Securities and Exchange Board of India (Sebi) norms. In fundamental analysis, the analysts particularly check for a company's core income, income from other sources, profitability, guidance, assets and liabilities and debt ratio among other parameters. The other method, i.e. the technical analysis focuses purely on statistical data. It works on two assumptions; one, the stock price reflects the fundamentals. Second, the study of past and present movement in prices can help determine the future price trends. Technical analysis primarily deals with price, volume, demand and supply factors. This method is effective only when supply and demand forces influence the market. However, when outside factors are involved in a price movement, technical analysis may not be successful. More
The most noted point after September quarter earnings season was that more than 100 stocks witnessed upgrade in rating to buy from brokerages.
Analysts and brokerage firms are bullish on market prospects as events such as the US election is over and positive reports on the vaccine front are giving hopes that soon COVID-19 will be under control.
Nifty, on a daily timeframe, is trading within a flag formation which is bounded in the range between 11,650 to 12,025 levels.
In case 11,250 is breached, the downside remains open towards 11,000-10,900 zone.
IT and pharma are preferred themes by experts after June quarter earnings
The benchmark index is just a few points away from the recent top of 11,341 which also happens to be the highest point of the rally started since March 2020.
Liquidity driven rally has almost completed 78.60 percent retracement of the entire downswing seen from January 2020 top to March 2020 bottom.
In the very short term, as the majority of the momentum indicators are trading in overbought zones, the possibility of small retracement towards 10,500 levels cannot be denied.
After some tough years, the pharma sector is performing well and is around 25 percent up while the broader market is down 20 percent year-to-date.
The geopolitical concerns could continue to keep markets jittery but the technical set up and bounce look good for a higher move to cross the recent high of 10,325 levels.
After bearish development on the short-term charts, Nifty has not seen follow up selling. The level of 9,100 has been acting as strong support for the index.
Once we see Nifty surpassing the higher boundary of 9,450, we would see a good broad-based participation in the market.
The Nifty Pharma index gained half a percent on May 7, taking gains to around 45 percent since March 23.
There's no relief from the COVID-19 front as the numbers are not showing any signs of slowing down yet and that could result in further extension of the lockdown, said Ajit Mishra of Religare Broking.
Mitessh Thakkar of mitesshthakkar.com recommends buying Apollo Hospitals with a stop loss of Rs 1,174, target at Rs 1,235 and CESC with a stop loss of Rs 412, target at Rs 450.
Ashwani Gujral of ashwanigujral.com suggests buying Sun Pharma with a stop loss of Rs 388, target of Rs 404 and Cipla with a stop loss of Rs 420, target of Rs 435.
The market is likely to remain in consolidation mode in next week amid corporate earnings, Delhi assembly elections results and domestic data including IIP, CPI and WPI.
Most brokerages feel 2020 could be the year for broader markets to do well
Most experts see FII flows moving towards few largecaps in coming year also
Prakash Gaba of prakashgaba.com recommends buying Jubilant Foodworks with target at Rs 1620 and stop loss at Rs 1582 and SRF with target at Rs 3500 and stop loss at Rs 3380.
Mitesh Thakkar of miteshthakkar.com recommends buying BPCL with a stop loss of Rs 533 for target of Rs 570 and NCC with a stop loss of Rs 59 for target of Rs 65.
Sudarshan Sukhani of s2analytics.com is of the view that one may sell Axis Bank with stop loss at Rs 735 and target of Rs 715.
Morgan Stanley also has overweight rating on Lupin with a target price at Rs 1,003, implying 47 percent potential upside from current levels as it believes the share price will rise in absolute terms over the next 30 days.
According to CLSA, GDP growth in FY20 is likely to be around 6 percent, much lower lower than the RBI's 6.9 percent projection.
Sectors with positive outlooks are real estate, small appliances and branded apparel, while outlook on autos, select staples and global commodities is more cautious.