Market and all stocks are moving up. Is there any proper time to buy a stock or sell it? How can I know when I have to take my money out of the stock market or when I need to make fresh investments?
There is no proper guideline and time to consult stock analysts to know when to buy/sell or hold a stock. But there are key facts which can help you to know the market conditions better and a way to identify when to buy or sell stocks.
- Increasing sales
Check whether the company is growing its sales and check whether these sales are sustainable or it is just a one-time event. Along with the sales data, check what management is telling about the quarter result data. At last, compare company sales from the last year as well as from the previous quarter data.
- Improving margins
Company margins usually improve or worsen depending on how well it is managed. If the sale is going up and also the costs are going up, it means something is going here. Generally, it is not bad news. It might be possible that the company is expanding its business or launching a new product. On the other hand, the company is doing a poor job in managing the expenses.
- The guidance
Guidance is something, how the company is going to perform in the next quarter or next year. Depending on the guidance, the stock of that company moves up or down. Always look at the guidance in the view of a long-term perspective. It might possible that a company reduces the guidance for the next quarter but raise it for a full-year period.
- Stocks buyback programs
When a company uses cash to buy its own stock, it is good that the management is believing that the stock is undervalued at the current price level.
- New products launch
As it is very challenging to understand that the new product will do good or not. But it would be a big mistake to overlook the stocks of the companies that make it. Normally, new products help bring more sales and in turn help in rising the stock price.
- Technical Indicators
Along with the fundamentals of the company, technical to play an important role in identifying the stock is in trend or in sideways. Whether the stock price will move up or move down in the near term, it can be identified using technical indicators. 50-day and 200-day moving averages help to determine the behavior of stock in the near term to long term.
At Pathfinders Trainings, we learn fundamental and technical aspects of stock to identify whether it is the right time to buy or sell a stock or do I need to keep this stock on hold.