How to Analyze Stock Performance Using Your Trading App?

Stock market investment often sounds daunting especially when it comes to analysing stock performance to make smart choices. However, with the introduction of online trading apps, stock analysis has become convenient even for beginners in the stock market. Analytical tools and even algo trading are being widely used to expand profit margins.

If you are new to stock market trading, let’s walk through useful tips to leverage trading apps for stock performance analysis and making the right investment choice. 

Analysing Stock Performance: Tips to Leverage Your Trading App

Before you move ahead with investments, it is crucial to first get hands-down with the skill to analyse stock performance. Stock analysis can be categorically divided into:

• Technical Analysis

Technical analysis is a method to analyse stock performance by gauging historic data of price movements. This type of analysis is performed through tools like moving averages, relative strength index, Bollinger bands etc. Here’s how you can leverage these tools:

• Moving Averages

Moving averages is a reliable tool that helps you analyse stock performance based on only those market factors that impact your investment requirement. It filters out the noise from other fluctuations in the market.

• Bollinger Bands

Understanding momentum in price movements is key to making the right investment choice. Bollinger bands feature three lines; middle band (the moving average), upper and lower band. This helps in trend trading as you can simply look at the movement in the middle band. An upward movement shows a positive trend and vice versa if it moves close to the lower band. 

• Relative Strength Index

This tool is considered a reliable way to understand whether a stock is overbought or oversold. RSI is calculated by evaluating the average gain and loss over a specific period. Typically, the RSI value ranges between 0 to 100. Values above 70 indicate that the stocks are overbought and values below 30 indicate an overselling of stocks.

• Stochastic Oscillator

Another reliable method to evaluate price change momentum is the Stochastic Oscillator. This tool predicts trend reversals to understand oversold or overbought stocks. A simple rule you must know is that recent price changes are measured on a scale of 1 to 100. A value above 80 reflects overbought stocks and a value below 20 reflects oversold stocks. 

• Fibonacci Retracement

Fibonacci Retracement levels are represented through horizontal lines on charts. These lines indicate whether support or resistance is likely to occur. Fibonacci price levels are measured in percentage and can be used with any two price points. For instance: Let’s say the stock price stands at ₹10 and eventually drops to ₹2.36. This would indicate that the stock price has retraced 23.6% in fibonacci price levels. 

• Fundamental Analysis

Stock performance analysis goes beyond using technical analysis. Fundamental analysis helps you understand the intrinsic value of stock i.e. the actual value of stocks. Here’s everything you should analyse to understand the actual value of stocks:

• Read the annual reports of the company.

• Use financial ratios for screening or simply rely on Bajaj Broking’s Screener for quick and accurate results.

• Research well about the company’s competitors. 

• Calculate the P/E ratio. It stands for price-to-earnings ratio and is a reliable method to understand the company’s valuation against its historical performance. 

• Analyse the company’s prospects.

Summing Up

Technical and fundamental analysis of stock performance has become easier with tools offered by trading platforms like Bajaj Broking. These tools eliminate human errors and inefficiency by promising quick, reliable and accurate results. In addition to low brokerage trading, when you have a Bajaj Broking trading account you get personalised suggestions, timely updates and news on your investments.

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