INDEX

S.N. DESCRIPTION
1 HOW TO START IN STOCK MARKET
2 INTRODUCTION TO STOCK MARKET
3-A BASIC TERMS USED FOR A FUNDAMENTAL ANALYSIS
3-B FUNDAMENTAL ANALYSIS
4-A BASIC TERMS USED FOR A TECHNICAL ANALYSIS
4-B TENCHNCIAL ANALYSIS
5 QUALTATIVE ANALYSIS
6 HOW TO SELECT A STOCK_EXAMPLE
7 RECOMMENDATIONS
 HOW TO START IN STOCK MARKET
S.N. TOPIC
1 Open A Demat Account
2 What Is Demat Account
3 How to open demat account
4 How to select best demat account
DESCRIPTION
For Buying And Selling Shares You Need A Demat Account.First Of All You Will Have To Open A
Demat Account.
Dematerialisation or Demat Account is an account that holds the investors securities such as
shares, debentures, mutual fund etc in a dematerialised or an electronic form. A buy transaction
will result in a credit entry while a sell transaction leads to debit entry in a demat account.
You can open a Demat account online and offline mode in any one among
Zerodha,5paisa,HDFC,ICICI,Sherkhan,Axes etc.
Open a demat account where the Broakage Charges are minimum.Zerodha,5paisa are having
very less brokage charges.
 INTRODUCTION TO STOCK MARKET
S.N. TOPIC
1 Types of Exchanges
2 Trading Mechanism
3 Settlement Cycle and Trading hours
4 Market Indexes
5 Market Regulation
DESCRIPTION
The BSE and NSE
Most of the trading in the Indian stock market takes place on its two stock exchanges: the
Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE has been in
existence since 1875. The NSE, on the other hand, was founded in 1992 and started trading in
1994. However, both exchanges follow the same trading mechanism, trading hours, settlement
process, etc.
Trading at both the exchanges takes place through an open electronic limit order book, in which
order matching is done by the trading computer. Market orders placed by investors are
automatically matched with the best limit orders. As a result, buyers and sellers remain
anonymous.
Indian Equity Stock markets follow a T+2 rolling settlement. This means that any trade taking
place on Monday, gets settled by Wednesday.Trading hour from 9:15 am to 3:30 pm.Market
works only five days in a week.Market remain closed on selected public holidays too.
The two prominent Indian market indexes are Sensex and Nifty. Sensex is the oldest market
index for equities; it includes shares of 30 firms listed on the BSE. Another index is the
S&P CNX Nifty; it includes 50 shares listed on the NSE, which represent about 62% of its free-float
market capitalization
The overall responsibility of development, regulation and supervision of the stock market rests
with the Securities & Exchange Board of India (SEBI), which was formed in 1992 as an
independent authority. Since then, SEBI has consistently tried to lay down market rules in line
with the best market practices. It enjoys vast powers of imposing penalties on market
participants, in case of a breach. (For more insight, see http://www.sebi.gov.in/. )
 INTRODUCTION TO STOCK MARKET
S.N. TOPIC DESCRIPTION

A depository in a simple term means a place where something is deposit for storage and security,
however in our capital market, this term has a lot of relevance, we define “Depository as an
institution that works like bank” .Likewise our bank holds investor fund, similarly depository
maintains an account for investors securities (share, debentures, mutual fund etc) hold by them
in a dematerialised or an electronic form.
Investor used to hold the securities in the form of physical certificate which has their own
disadvantages and to take a control over the irregularities of the capital market for the
protection of an investor`s interest, Depository system has been introduced in India where the
6 Depositories securities could be handled in an electronic form by the process of dematerialisation.
One of the main function of the Depository is to transfer the ownership of shares from one
investor`s account to another investor`s account whenever the trade takes place. It helps in
reducing the paper work involved in trade, expedites the transfer and reduces the risk associated
with physical shares such as damaged, theft, interceptions and subsequent misuse of the
certificates or fake securities.Another important function of depository is that it eliminate the
risk associated with holding the securities in a physical form like loss,damage,theft or delay in
7 Function of Depository deliveries etc.

We have 2 depositories in India which are well known as NSDL (National securities depository
limited) and CSDL (Central Depository Services (India) Limited). They interface with the investors
through their agents called Depository participants (DPs). DPs could be the banks (private, public
8 Depositories in India and foreign), financial institutions and Sebi-registered trading members.

9 Functions of Depository Participant(DPs)
Depository participant provides the service of opening a demat account to the investor; they are
coming with different schemes like three-in-one demat account, free demat account etc to lure
the investors to open an account with them. However, they are making an investment in to
securities more reachable by providing services like transaction SMS on registered mobile
number, contract note for every transaction at your door, E-trading platform, investment advice
etc.Investor should take accessibility, charges and service factors of Depository participant(DPs)
into consideration before opening an account with them
 BASIC TERMS USED FOR FUNDAMENTAL ANALYSIS

S.N. TERM DESCRIPTION

1 Share Price/Value of the Share
2 Price To Erarning Ratio(PE )
3 Earning Per Share(EPS)
4 Industrial Pe Ratio(IPE)
5 Peer Companies
6 Net Income
7 Revenue
8 Dividend
Share Price=PE X EPS
P/E =Market Value per Share / Earnings per Share
EPS = (Net Income - Dividends on Preferred Stock) / Average Outstanding Shares
Industrial PE ratio= Average of PE Ratio of all peer Companies
Peer companies are those which have similar characteristics and interests.
Net income=Revenue-Total Expenses
Revenue is simply the total amount of cash generated by the sale of products or services associated with
the company's primary operations.
Dividend--A dividend is a distribution of a portion of a company's earnings, decided by the board of
directors, to a class of its shareholders.

A preferred dividend is a dividend that is accrued and paid on a company's preferred shares. In the event
that a company is unable to pay all dividends, claims to preferred dividends take precedence over claims to
dividends that are paid on common shares. The main benefit of preferred stock is that it typically pays
9 Preferred Dividend much higher dividend rates than common stock of the same company.
A preferred stock is a class of ownership in a corporation that has a higher claim on its assets and earnings
than common stock. Preferred shares generally have a dividend that must be paid out before dividends to
10 Preferred Stock common shareholders, and the shares usually do not carry voting rights.

Outstanding shares refer to a company's stock currently held by all its shareholders, including share blocks
held by institutional investors and restricted shares owned by the company’s officers and insiders.
11 Outstanding Share Outstanding shares are shown on a company’s balance sheet under the heading “Capital Stock.”
12 Dividend Yield Divident yield=Actual Dividend per share/price per sharex100
13 Book Value Book value of a stock = book value of total assets – total liabilities.
Assets-An asset is a resource with economic value that an individual, corporation or country owns or
controls with the expectation that it will provide future benefit.Increasing Value indicates business
14 Assets expansion.
Liabilities-A liability is a company's financial debt or obligations that arise during the course of its business
15 Liabilities operations.
Return on Equity = Net Income/Shareholder's Equity, As a
thumb rule, always invest in a company with ROE greater than 20% for at least last 3 years. A yearly
16 Return On Equity(ROE) increase in ROE is also a good sign.
17 Shareholder Equity Shareholders' equity = total assets -total liabilities
18 Return On Capital Employeed (ROCE) ROCE = Earnings Before Interest and Tax (EBIT) / Capital Employee
 BASIC TERMS USED FOR FUNDAMENTAL ANALYSIS

S.N. TERM DESCRIPTION

19 Capital Emplyee Capital Emplyee=Total assets-Current Liabilities
20 Market Capture It is divited into small,medium or large Cap.Select as per your investment plan.
21 Volumes Volume traded = Intra day traded shares + Inter day traded share.
22 Deliverables Deliverables % = (Inter day traded shares/Total volume traded) × 100

Reserves- Balance sheet reserves represent the amount of money insurance companies set aside for future
23 Reserves insurance claims or claims that have been filed but not yet reported to the insurance company or settled.
24 Net Worth Net worth-Net worth is the amount by which assets exceed liabilities.
25 Net Block Net Block=Gross Block-Depreciation
26 Gross Block Fixed Assets of the business Before the Depreciation is provided
27 Depreciation Reduction of price of assets with Time.
Debit-A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on
28 Debit a company's balance sheet.
29 Debit Equity Ratio Debt to Equity Ratio =(Total Liabilities)/(Total Shareholder Equity),It should be less than one.
30 Shareholder Equity Shareholders' equity = Total assets -total liabilities
31 Net Profit Margin NPM=Net income/Revenuex100 %
32 Net Income Net income=Revenue-Total Expenses
Revenue is simply the total amount of cash generated by the sale of products or services associated with
33 Revenue the company's primary operations.

Financial Statements- Standalone financial statements show the financial position of the company alone
(and no other legal entity). Consolidated financial statements show the financial position of the company
34 Financial Statement itself along with it’s subsidiary companies, associate companies and joint ventures.
If company was posting losses every financial year, but suddenly this year it has posted profit. So the stock
is ready for turnaround now.If the company had huge debts but every quarter its decreasing its debt, its
35 Turnaround also a turnaround candidate.
36 Multibagger A stock is called a multibagger if it is giving multi year breakouts.
Net sales are the amount of sales generated by a company after the deduction of returns, allowances for
37 Net Sales damaged or missing goods and any discounts allowed
Price to Book Ratio = (Price per Share)/( Book Value per Share)
Generally, a lower P/B ratio could mean that the stock is undervalued, but again the definition of lower
38 Price To Book Ration(P/B Ratio) varies from sector to sector.
39 Price To Sales Ratio(P/S Ratio) Price to Sales Ratio = (Price per Share)/(Annual Sales Per Share)
 BASIC TERMS USED FOR FUNDAMENTAL ANALYSIS

S.N. TERM DESCRIPTION

Current Ratio = (Current Assets)/(Current Liabilities) As a
40 Current Ratio thumb rule, always invest in a company with current ratio greater than 1.
Promoters-A promoter is an individual or organization that helps raise money for some type of investment
41 Promoters Holding activity.

Pledging of shares is one of the options that the promoters of companies use to secure loans to meet
working capital requirement, personal needs and fund other ventures or acquisitions. A promoter
shareholding in a company is used as collateral to avail a loan. While pledging shares, promoters retain
their ownership. However, as the share price keeps fluctuating, the value of the collateral also changes.
When the value of the shares pledged with a lender falls below a certain level, it triggers 'margin call',
42 Pledged Share requiring the promoters to make up for the shortfall in the value of the collateral.
Share capital consists of all funds raised by a company in exchange for shares of either common or
preferred shares of stock. The amount of share capital or equity financing a company has can change over
time. A company that wishes to raise more equity can obtain authorization to issue and sell additional
43 Share Capital shares, thereby increasing its share capital

The put-call ratio is a popular tool specifically designed to help individual investors gauge the overall
sentiment (mood) of the market. The ratio is calculated by dividing the number of traded put options by the
number of traded call options. As this ratio increases, it can be interpreted to mean that investors are
44 PU/CALLRatio(P/C RATIO) putting their money into put options rather than call options.
 FUNDAMENTAL ANALYSIS CHECK POINTS
S.N. TOPIC DESCRIPTION

1 PE ratio PE ratio below 15 is considered as very good but it should be less than that of Industrial PE ratio.
2 EPS This should be in increasing order from last 04-05 years.
3 Net income It should be in increasing order.
4 Revenue It should be in increasing order.
5 Dividend Yield It should be in increasing order for last 4-5 years.
If book value is decreasing means either assets are decreasing or liabilities are increasing.It should be in
6 Book Value increasing order or should not decrease.
7 Liabilities It should be in decreasing order or check the reason if increasing.
8 ROE ROE shall be greater than 20% for at least last 3 years or must be in increasing order.
9 ROCE It should be in increasing order.
10 Volumes Increasing average volume with increasing price is a bullish sign for stock.
it should be more than 50%.Higher the %age more the delivered qty than traded qty.Good Sign for
11 Derivables investment.
12 Reserves It should be in increasing order.
13 Networth It should be in increasing order.
14 Netblock It should not decrease with a high rate.
15 Debit It should be in decreasing order.
16 Debit Equity Ratio It should be less than one.
17 Net Income It should be in increasing order.
18 Net Sales It should be in increasing order.
19 Price To Book Ration(P/B Ratio) It should be lower w.r.t. peer companies.
20 Price To Sales Ratio(P/S Ratio) It should be less that one.Smaller the ratio,better the stock.
21 Current Ratio It should be greater than one.
22 Promoters Holding It should be constant or in increasing order.
23 Pledged Share There should not be any pledged share.
24 Share Capital It should be minimum or in decreasing order.
25 Put Call ratio It should be in increasing order
26 Future plans What are the plans of company for business growth.
27 Scope of product Does the product have scope in future like a Computer have but a typewriter does not have.
28 Popularity of product Are the products popular in market.
29 Quality Are the Peoples satisfied with quality of products.
30 Do you like Do you own or like the product of company.
 BASIC TERMS USED FOR TECHNICAL ANALYSIS

S.N. TERM DESCRIPTION

1 Types of charts Line,Bar,Candle Stick,Point and figure,Area charts.
1 Uptrend The Plotted Chart on the basis of daily opening and closing prices is going up.
2 Downtrend The Plotted Chart on the basis of daily opening and closing prices is going down.

3 Sideways The Plotted Chart on the basis of daily opening and closing prices is moving with in a narrow range.
The most common type of moving average is the simple moving average, which simply takes the sum of all
of the past closing prices over a time period and divides the result by the total number of prices used in
4 SMA the calculation.
5 Short term moving average Moving avegare of 20-50 days is Short term Moving Average.
6 Long Term Moving Average Moving Average of 150-200 days is long term moving average
7 Very Long Term Moving Average Moving Average more than 300 days is long term moving average
VWAP=Total bought sharex Share Price/Total Bought Share. The
8 VWAP(Volume Weight Average Price) price of buy trade must be lower than VWAP.
Support Level are those levels where demand is perceived to be strong enough to prevent the price falling
9 Support more further.
Resistance Level are those levels where Selling is perceived to be strong enough to prevent the price rising
10 Resistance more further.
John Bollinger’s Bollinger Bands plot a 2 standard deviation band around the 21 day moving average.The
area between the Bollinger Bands accounts for over 95% of the stocks
expected trading range. In other words, a stock will trade between the Bollinger
11 Bollinger Bands Bands 95% of the time.
12 Relative Strength Index RSI is a super reliable momentum oscillator that calculates overbought or oversold conditions.
Parabolic SAR (PSAR) indicates entry and exit,or long and short, points in stock trends. PSAR is a
13 Parabolic SAR momentum indicator
The MACD rising above zero indicates current momentum is positive. Below zero indicates momentum is
14 Moving Average Convergence/ Divergence negative.
 TECHNICAL ANALYSIS CHECK POINTS
S.N. TOPIC DESCRIPTION
1 Trend Trend must be in uptrend movement.Do not bet on downtrend and sideways.
2 Volumes Increasing Increasing average volume of 10 day with increasing price is bullish sign
3 Volumes Increasing Increasing average volume of 10 day with decreasing price is bearish sign
4 Volumes decreasing Decreasing average volume of 10 day with Increasing price is indicator of trend change.
5 Volumes decreasing Decreasing average volume of 10 day with decreasing price is is indicator of trend change.
6 Short Term Average. Short Term SMA above Long term SMA Indicates bullish sign.
7 Long term average Long Term SMA below Short term SMA Indicates bullish sign.
When a short term moving average cross Long term moving average and goes up this is bullish
8 Bullish Cross over crossover.Reverse case will be bearish crossover.
Make a trade when price jump back from support.Moving average prices too indicates supports on
9 Support Level charts.
10 Resistance level. You can Short fall if price reverse back from resistance level.
A move below the Bollinger Band is a good place to get long the stock where a move above the Band
11 Bollinger Bands is a good time to sell your stock or go short

If RSI is greater than 50 then momentum is bullish and if less than 50 bearish Momentum.If RSI is
12 RSI equal or graether than 70 then overbought,if RSI is 30 or below then oversold.
Buy When Psar Moves From Above Stock Price To Below,Sell When Psar Moves From Below Stock
13 Parabolic SAR Price To Above
When the MACD line crosses above the signal line the stock’s momentum is turning positive. This is a
sign the share price is setting up to rise.When the MACD line crosses below the signal line the stock’s
14 Moving Average Convergence/ Divergence momentum is turning negative and share price may fall
Technical analysis relies on the assumption that all information is already reflected in the price of a
15 Assumption security, which means that analysis of that price is all that matters.
 QUALITATIVE ANALYSIS CHECK POINTS
S.N. TOPIC
1 Qualiotative Analysis Definition
2 Management Team
3 Background and capabilities
4 Management Philosophy
5 Tenure and performance with in the company
6 Business Model
7 Brand Value and appeal.
8 Leadership
9 Institutional Participation.
DESCRIPTION
Qualitative analysis is a securities analysis that uses subjective judgment based on unquantifiable
information, such as management expertise, industry cycles, strength of research and development, and
labor relations. Qualitative analysis contrasts with quantitative analysis, which focuses on numbers that
can be found on reports such as balance sheets.
Know about the management team like Director,Chairman,CEO,CIO.
Search out for the experience,Achiements,Previous record,Background,Capabilities of managements
employee.
Study the Style and Transperancy of manamenment.
Study the Tenure and performance with in the company.
It must be Robust and solid.
Check for the brand value in market wrt other brands.
Is the company is top leaders or not.
There must be participation of FII,DII,MFI.
 HOW TO SELECT A STOCK,BRIEFING WITH EXAMPLE
S.N. BRIEFING WITH EXAMPLE

How to select a stock for Investmentor u can say How to check fundamentals of a stockFirst Go to BSEINDIA.com In the search box type the name of the stock which u r
interested in investing :-Now select Financial, see its results Annual as well as quarterlyFirstly see Revenue, if its increasing every quarter as well as annual or its stable but
not negative then its a good stockThen see its Net Profit , if its increasing every quarter as well as annually then its a good stock Then see its Debt as well as Reserve Capital :-
Suppose the Debt of a company was 100 crores in 2014, 90 crores in 2015, 70 crores in 2016, 50 crores in 2017And its Reserve Capital in 2013 was 210 crores in 2014, 218
crores in 2015, 226 crores in 2016, 240 crores in 2017Here u r seeing the Debts of this company is decreasing every financial year and the Reserve Capital is increasing every
financial year. So, its a safe company to invest in. If a Company has zero debt but has good Reserve capital then its a Golden stock to investNow see Shareholding Pattern of
that stock. Just see the percentage of stock promoters r holding & public is holding.For example :- Suppose in 2014 Promoter Holding 66% Public or Institutions holding rest
34%, 2015 Prom Holding 70% and Pblic and inst=30%, In 2016, Promoters holding 72% and public and inst=28%, and in 2017 Promoters holding is 75% and public and
inst=25%. So its a very less risky stock bcs Promoters holding has increased every year and not decreased so they hv faith in their company and If FIIs holding also increases
every quarter or annually then additional good point for stockNow see its P/E ratio and also check its Industry P/E ratioSuppose its a Pharma stock trading at 200 rupees and
its P?E ratio is just 9 and Its Industry P/E ratio is 27. What does it means ? It means that the stock has the potential to triple from here bcs its Industry P/E ratio is thrice its
own P/E ratioNext point is to check if Promoters have pledged its shares. Suppose company is posting very good results every year but most of its shares are pledged by
promoters then simply avoid that stockNow, next see its Book Value. Book Value is Total Assets of a company Divided by its total no of shares. Suppose its Book value 85 and
the share is already trading at 450. For me its already a overvalued stock bcs its trading way above its book value even though its a good company risk element is high for
investment. Now, Suppoe the BV of a stock 300 and its currently trading at 75 . Its a good pick or safe pick for investment bcs its BV is still 4 times its current price. But u hv
to check other above mentioned factors also to invest in it. Only if its BV is high than its current price doesn't mean that stock is good Another way is to select turnaround
story stocks. Suppose a company was posting losses every financial year, but suddenly this year it has posted profit. So the stock is ready for turnaround nowSuppose, the
company had huge debts but every quarter its decreasing its debt, its also a turnaround candidateNow how to find Multibaggers. I know everyone wants to know this :-Yes,
just see the All time datas of a stock suppose A stock was just 8 Rupees in 2006 and went to 250 in 2009 but started coming down again and came to 48 and now again in
2017 it crossed 250 and closed above 250 twice. Its a multi year breakout in that stock now and its a multi bagger now just keep a tight stop loss 210 to 220 and keep buying
it till it reaches 500 atleast thats our 1st tgt now. Now at 500 again review the fundamentals mentioned above if everyting is fine then stay invested for further upmoves or if
1 fundamentals not supporting then simply just book ur profits around 500
 RECOMMENDATIONS
FOLLOWING ARE THE RECOMMENDATIONS FOR LEARNING WHICH ARE COMPLETELY FREE OF COST

Join following youtube channels for basic learnings and analysis.

https://www.youtube.com/user/TheSunilminglani
https://www.youtube.com/channel/UCd2cC2ngEZ1KsSorZVjO6Lg

Join the folowing telegram group for basic learning nad analysis

https://t.me/joinchat/HPmfKxB8bYyGeRfvQ6u6QA

Visit the following website for basic learnings and analysis.

https://www.screener.in/
https://www.marketsmojo.com/markets
http://www.bseindia.com/
https://www.nseindia.com/
https://www.investopedia.com/
https://m.economictimes.com/

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