Stock pick

Stock pick is an important aspect when one goes for stock trading or stock investment. The stock pick consists of features which will take you towards the stock market wealth if you discover right stock at right time and at right price. But going through stock market history you will examine that it is very tough task to catch the rising price of right stock at right time and at right price.

So then how you will discover the right stock at right time and at right price? It is a $100 million question that all retail investor has!

Over here I would like to put some impression on it and it is solely my view and what I think how it can be! It might defer from investor to investor.

Broadly speaking stock market is one kind of bet; you cannot predict what is in mind of other investors and what they think about the stock you want to pick.

• Before you go for a stock pick examine how the overall stock market is doing. Find out the negative influence if there are any which might impact the stock market as a whole.
• Go through sector to sector and find out which business sector is performing well and which sector is undervalued.
• The sector preference fully depend upon the time horizon that you have kept in your mind to hold any selected stock on a short term basis or a mid term basis or for long term basis.
• If you are looking to hold your best stock from purely on a short term or the most mid term basis you definitely should go for good sector performing stocks, which shows consistent interest among investors as well as traders, but if you are looking to hold your selected stock pick on a long term basis you can go for undervalued sector also.
• Undervalued sector does not mean that the stocks containing in these sectors are not performing well or these are not quality stocks but due to some unsuitable reason big fund investor ignores these sectors as a whole and due to this behavior of investor the overall sector tends to fail to appreciate better as compared to other sectors belonging in the stock market, but instead when these sectors start to perform well it gives more high return than other sectors in stock market but only bet is that you should select your best stock pick which has a history of long term good performance.
• For here I would like to give example of banking sector. If there is any hike in interest rate, the immediate reaction appears in this sector and the stocks from this sector tends to get ignored by the investor and this sector becomes undervalued sector, because due to rise in interest rate the investor thinks that the profit margin of this sector might impact, but if you admire, this sector is still a very good long term bet because at some point this sector will again start to perform well and will increase their profit margin and that point investor mood will again change and stocks of this sector will outperform the rest of sectors in stock market.

Once you have finished examining the sector you should now go for the thing that you are looking for i.e. “stock pick”.

There are many factors that you need to look for best stock in your selected sector and also it depends upon the time horizon that you are looking to hold the selected stock pick.

Stock pick for short term: Short term basis can be said as stock trading for only couple of days or mostly couple of weeks, beyond that the trader sells their stock holding and take out the profit on their desk that they have gained, no matter the gain is just minimum 3% or quite big or at some point the traders sell their stock pick holding in a loss. Stock pick on short term basis is purely done only on technical basis and very little bit with fundamental story of that stock pick. Liquidity, volume average, momentum, stock news, trigger, technical charts are some of the features which clearly defines the correct stock choose.

Stock pick for long term: Investor finds out that any specific stock of certain sector is suddenly trying to move out of their 200 days moving average in upward direction and there is sudden rise in stock volume as compared to average volume for the last few days or few weeks or for few months, along with sudden rise in liquidity which clearly gives an indication of that stock pick interest by some of the big financial funds, which is just a right indication that specific stock is now in rising mode and it can be bought.