Stock market is of highly volatile nature and to trade here successfully, good performing stocks must be selected for trading purpose. In-order to predict market movements and stocks performance in the right direction fundamental and technical factors are carefully studied. To manage risk and returns in a better way mcx tips , trading tips as depicted by experts of market can be referred.
Selecting good performing stocks for trading purpose is difficult as there are numbers of stocks which are listed on popular exchange of Indian stock market. To make sure you are investing in right stock understanding both technical and fundamental factors is important. Company's financial information, macro and micro economic factors are studied while examining performance fundamentally.Examining stocks performance technically is quite difficult as there are so many terms and phrases which you need to know.
Some important technical indicators which investors must know about are discussed below:
1) Accumulation/ Distribution Line
This indicator helps in determining the flow of money. It is believed that when accumulation/ distribution line slope is upward then money is coming into a security and when slope is downward money is going out.
2) Moving-average convergence/divergence line
MACD (moving-average convergence/divergence line) is most popular and widely used technical indicator. This indicator helps in determining trend and momentum of a stock.Short term and long term momentum of stocks are compared here and then future direction is determined.For this comparison two moving average of stocks are used.These moving average can be of any time period.
3) Head and Shoulders Pattern
Unlike above two this is not any kind of indicator but it is a chart pattern which is studied to draw useful conclusion about stocks performance. When a stock rise to a peak it forms its first shoulder and then falls. Further when it rises above its earlier peak it forms head and then falls below first shoulder before it rises to form another shoulder. It is believed head and shoulder is most reliable reversal pattern on which investors can rely. When such patterns appears in any of your holdings then it indicates that future selling may come.
It is possible that a stock may open much higher or lower than its previous close which causes gaps. This happens because of some news which is released before market is open. Investors must know about these gaps as it helps in determining new support and resistance levels.
Indicators discussed above helps in making a wise choice of stocks and earn profitable returns.If you are a new trader or do not have sufficient knowledge about market then you may consult financial advisory services provider to give you useful recommendations and help you to trade in secure and wise manner as to study such technical & fundamental factors it is required to have good market knowledge and familiarity with markets terminologies.