How do you know which stocks will be profitable and ones that are likely to be bad guys?
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How do you know which stocks will be profitable and ones that are likely to be bad guys?
I think there are 3 major factors you should consider when you value a stock. Stocks are sold and bought on the open market in a bid-ask structure. The bid price is the highest price that buyers are willing to pay for a stock, and the ask price is the lowest price at which sellers will give up their shares. So if buyers outnumber sellers, the stock price will shoot up.
Another crucial factor is the performance of the company. You have to consider the fundamentals of a company before buying it’s stock. If a company’s earnings are good, the stock should grow.
Another important factor to consider when you value a stock is the broad economic trend, that is, the macroeconomics. Is the economy generally healthy, or is a recession in place. The trend of the general economy will affect the value of a company’s stock.
First of all, the stock of interest must be fundamentally strong enough and must be available at its interim or all time low price after consecutive lower low price swing with valid and recoverable reason. And then the stock must start to pick up from its lower swing and make consistent lower high to enter into the stock at an appropriate price and time.