Bull and Bear Market

Bull and Bear Market

When you are into the work of stock trading, you often hear the terms “bull” and “bear”. These terms are used to define market conditions. It is important to know and understand what the terms indicate, in order to understand the functioning of the market. Let’s understand what are bear and bull markets and which one is better Bear or Bull market? And then let’s dig deeper into it.

What Are Bear and Bull Markets?

The words Bull and Bear are used to describe whether the market is appreciating or depreciating in value. Sometimes, these terms are also used to determine how investors think about the market and the subsequent trends.

In simple words, when the stock market rises high, it is said to be bullish or bull market. It is characterized by a continual increase in market share prices. When the market is bullish, most investors often believe that the uptrend will remain for a longer period of time.

On the other hand, the market is said to be bearish, when it is facing a downfall. A bear market is the indication of decline. In Bear Market, the share prices start dropping, and the economy of the country slows down.

Which one is better Bear or Bull market?

Both bear and bull markets have different impact on your investments. When the market is bullish, short term or intra-day trading takes a peek. On the other hand, the bear market brings long-term investment opportunities to investors. So it’s a good idea to spend some time to govern the market and make investment decisions accordingly.

Open vs High

Opening price is significant especially at the beginning of the market, to determine day trading strategies. The price at which stock first trade on trading day is known as opening price. Open vs high-low generally gives you the first impression of how a stock will perform throughout that trading day. Hence, the effect of news, events reflects on opening price, at times leading to the opening of stock in gap up or gap down.

When this opening price is compared with High or low, it helps the trader to take an effective position in the market. Therefore, a specific feature where High price can be compared with low prices, would be beneficent for the trader.

Open vs High low can be understood into two sections, in order to generate Buy & Sell signal:-

Open  equals to high

This indicates Bearish trend as prices will probably move below high price. In other words, a trader can go Short.  Whereas Previous high will help a trader to identify breakout by comparing it with current day’s high price.

Open equals to low

This indicates Bullish trend, thus a trader can go long. Here prices will possibly move upward beyond low price. However, previous low can help in determining the breakouts.

We have thus developed open v/s high-low feature for traders to identify intra-day trading strategies and even the ‘%chg’ option plays an important role for intra-day traders. This feature in TruedataCheetah is shaped in such a way where a trader can certainly take position by just observing the results.

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Beginners guide to stock market

Beginners guide to stock market

Most Often, gold and stocks are the investment showgrounds that attracts Indian investors. If you are someone looking to invest in shares and stocks (Stock Market) in India, and are just about to start off, here are some of the basic things you need to understand as a newbie.

What is the stock market all about?

In India, there are two primary exchanges; the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). These are the only two exchanges in India where buying and selling of shares and commodities happen. Usually, there is a minor difference in the price of shares at the two exchanges. Your broker can guide you here in case you do not understand where to trade. 

What is the difference between primary markets and secondary markets?

When a company lands up in stock exchange with an initial public offer (IPO) it is known as the primary market. The secondary market is the place where actual trading of the shares takes place. The only purpose of an IPO is to list the stock or the company in the share market. Once the company gets listed, it starts trading in the secondary market. Buying and selling shares is largely like buying and selling any other commodity.

How are shares priced in the market?

The share prices of any company are directly proportional to the growth of the company. Usually, share prices go up when the company is growing very fast, earning very good profits or it gets new orders. Therefore, the price of a share is determined by demand & supply and growth of the company. Sometimes, some positive or negative rumors about the company affects its share prices. But this fluctuation is temporary and does not affect the position of the company in the stock market for the long term.

How much money you need to start investing in Stock Market?

Investors can start trading with even 1 share of the company. There is no minimum investment required  So if you buy a stock with a market price of Rs.100/- and you just buy 1 share then you just need to invest Rs.100. Of course, brokerage and statutory charges will be extra.

What do you need to get started?

PAN Card:

PAN (Permanent Account Number) is a primary requirement for entering any financial transactions in our country. The Tax Authorities assign this unique 10 digit Alpha-Numeric number assigned to an individual for calculating their tax liabilities

A Broker:

Brokers are the people who are authorized to buy and sell on the markets. One cannot just start trading in the stock market, without a broker. SEBI (Securities and Exchanges Board of India), which regulates the share markets provide license to the eligible individuals or agencies to trade in the stock market.

For buying or selling shares, an investor need to inform your broker about which share in what quantity you wish to buy at which price. If you are using an online trading system, you can set the price in the system at which you want to sell it.

Demat and Trading Account:

We cannot hold the shares in any physical form. It is the Demat account that will hold the stocks or shares in our name and the same will reflect in the stock portfolio. All the shares have to in a Dematerialized state or Demat state. For buying and selling shares, you need to have a Trading account. You need to open both Demat and Trading account simultaneously, in order to trade in the Indian Stock Market Once you have a broker or broking company, it will help you in opening Demat and Trading account

What are statutory charges?

Statutory charges are the government-imposed charges, just like GST or stamp duty that needs to be paid. These charges go to the government, not the broker. The fee charged by the broker is known as brokerage.

Bottom Line

Once you step into the stock market, the brokers or the brocking firms provide all this information to you, but knowing these things will help you in staying aware and invest carefully.

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Choosing Career in Indian Stock Market

The Stock Market in India has fascinated general Indian masses for long, perhaps due to the high (mostly instant) gains through the investments. In earlier days, people used to associate tags such as fortunate and risky with the Stock Market, because of the lack of knowledge and Investments made on either guesswork or the Guidance of others who have tried their hands in this market. However, the mystery of the Capital Markets has faded away over the period of time; people now understand that there is 100% Technical Analysis behind the Success in Stock Market.

It is not about the guesswork and the capital markets are much more than picking stocks and making big money. It is an assorted and complex field and the recent generation is more than willing to take up this challenging and rewarding career in Indian Stock Market.

If you are one of those who want to have a successful and long term career in the capital markets, then here some of the helpful tips for you:

Have clarity of your Goals

The Stock Market is not just about picking up the stocks randomly, waiting for it grow and payoff. There is much more to it, there are many different roles in the hierarchy. Within the capital markets you can choose to work in Broking and Distribution, Asset Management, Wealth Management and the ECM side of Investment banking. Have a clear idea of which of the areas interests you the most, so that you can get prepared accordingly.

Become a subject matter expert

Now that you know where which role appeals you most get a relevant degree and/or relevant educational qualifications; although there are many people who Work in Stock Market, without related educational background, getting qualified for a particular role will set you apart from others in this competitive field.

Certify yourself

Getting yourself certified with a few of NCFM and NISM certifications (in addition to the mandatory ones such as the research analyst certification for the research analyst profile) portrays your seriousness towards your career. If you are looking for a job in this industry, you may also consider adding a CFA or a CA certification to your profile; though it’s not mandatory it is certainly a great advantage for your career.

High Levels of integrity

When you work in the stock market, you will have to manage money matters on behalf of others, particularly when you work with large and successful capital markets oriented companies. Therefore, it is your moral and ethical responsibility to be ethical towards that money. The markets are governed by SEBI. SEBI performs systematic audits time to time, in order to ensure compliance, so, only someone with very integrity can survive for long in this industry.

Work under a mentor

In the stock markets, there are lots of Analysis and predictions are required to be made. On the initial stage of your career, you may not be able to make accurate predictions, despite higher education that you have taken. Working with a mentor who can help you rise above such situations and help you cope with different situations will help you make a better decisions and work independently after some time.

If you single-mindedly follow the stock markets, understand how the Sensex and Nifty work, and have an ability to handle finances, then a career in stock market can bring to you great success and growth.

Here is a list of top institutes in India offering stock market-related courses:

Institute of Company Secretaries of India

ICSI House, 22,
Institutional Area Lodhi Road,
New Delhi 110 003,
EPABX LINES: (011) 41504444, 24617321-24-, 24644431-32, Fax: 24626727
Website: http://www.icsi.edu/
Course offered:  Post-graduate membership course in the capital market and financial services

Institute of Capital Market Development

1965, Arya Samaj Road,
Karol Bagh, New Delhi-110005
Course offered: One-year postgraduate programme in Fundamentals of capital market development.

All India Centre For Capital Market Studies

D. C.
Byte Institute of Management Studies and Research,
Nashik-422 005,
Course offered: One-year post-graduate programme in capital market studies, in collaboration with the Mumbai Stock Exchange Training Institute, leading to a diploma from the University of Pune. The course is open to graduates through an all-India selection process.

Mumbai Stock Exchange Training Institute

Stock Exchange Building,
Fort, Mumbai,
Course offered: Certificate courses are run periodically throughout the year

Institute of Financial and Investment Planning

B/303, Ventex Vikas,
M.V. Road,
Andheri East,
Mumbai,
Course offered: One-year correspondence cum lecture course leading to a diploma in financial and Investment planning

Institute of Chartered Financial Analysts of India

Road No. 3, Banjara Hills,
Hyderabad,
Course offered: Chartered Financial Analyst Equity Research.

The Orion Institute of Capital Market

S- 11, Adarshini Plaza,
91, Adchini, Aurobindo Marg, New Delhi

The UTI Institute of Capital Market

Plot 82, Sector – 17,
Vashi, nave Mumbai – 400 705

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What do the NSE Series – EQ, BE, BL, BT, GC, IL & IQ Mean ?

NSE Series – The National Stock Exchange (NSE) started trading in the equities segment (Capital Market segment) on November 3, 1994. Within a short span of 1 year became the largest exchange in India in terms of volumes transacted.

Permitted Asset Class (NSE Series)

There are a number of products traded in the Capital Markets. Segments viz., Equity shares, Preference shares, Warrants, Debentures, Exchange-traded Funds, Mutual Funds (close-ended), Government Securities and Indian Depository Receipts.

Each asset type is assigned an NSE series for trading.

Each Series distinguishes the scrips and / or the people who can trade in those series.

Listed in the table below are the symbols which denote the various types of series traded on the NSE :-

 Note :-

·         Generally, retail investors come across NSE EQ and BE only.

·         Normal share trading is done under the NSE EQ and intra-day squaring of the trade is possible. This means a trade can be settled without accepting or giving its delivery.

·         The ‘delivery percentage’ under BE category is 100% as no intra-day trade is allowed.

·         Please follow this Link on the NSE website for more details.

Leave a message if you have a query or more information on this topic.

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How to Identify Bbest Dividend Paying Stocks and Make Best Out of Them?

Dividend Paying Stocks – Although capital appreciation is the first choice of investors in comparison with dividend income, that does not make dividend less worthy. Despite the fact, that capital appreciation yields are higher; it is volatile and risk associated. On the other hand, income from the dividend is balanced and predictable.

Most importantly, Dividends are a great source of “Passive Income”. Once you have invested in the dividends, it continues to pay you for long term; you just need to buy, sit back and enjoy the consistent flow of dividends. The income from the dividends keeps growing with the pace of Company’s growth. Simply by holding a good stock for long term (10 years or more), their dividend yield itself will become high enough to beat the returns of any debt.

Suppose this person held on to his shares till year 2018. What will be his dividend yield as on Mar’18? [Additionally, company-issued bonus shares 1:1 to all shareholders between Mar’09 & Mar’18, which simply doubles the income of dividend]

So, from all the angles, investors of the dividend stocks are the gainers, without any extra effort.

In order to go a step ahead, one can also reinvest the earnings from the dividend into the same stock (during the lower phase of the stock) and increase the income further.

In this article, let’s see, what the factors are; which needs to kept mind while investing in dividend paying stocks.

Consistency in Profits and Strong Cash Flow

The very first thing you need to look for is consistent profits. If a company isn’t making steady profits, there are less chances that it would be able to deliver dividends. Profitable growth of the company is the key indicator of a quality dividend-paying company.

Also make sure, that the company has sturdy cash flow generation. Because, it is the cash flow which pays off the dividend.

For Example:

are considered good dividend paying stock as they not only pay dividends regularly, but dividend also grows with time. This is due to their regular strong cash flow.

Check Industry Strength

This is most overlooked factor, while choosing long term dividend paying stocks. If an industry is touching the roofs for past few years, it does not mean that the stocks won’t drop ever, but they’re likely to be more resilient than most stocks. And as long as the industry is in prosperous mode, there is more chance for increase in dividend, over the period of time.

In order to identify potentially good dividend-paying companies, do the following research

·         Dig into the financial reports. Look for the profit and loss account of the company.

·         Check, how much the Earning per share (EPS) of the company has grown in last 5 years.

·         Check if dividend per share of the company has grown in last 5 years.

·         Relate, if EPS growth and dividend per share growth are similar. If this is so; it is a good sign for you. Growth in EPS indicates that the net profit of the company is improving and Dividend per share growth mean that the company believes in idea of paying dividend to the investors. Therefore, having similar EPS and Dividend per share means, as the profits of the company upsurges in future, it will increase the dividend pay out to the investors.

Bottom Line

Dividends are long term investments. Dividend payment is a process by which company share its net profit with its stockholders. Good dividend paying companies are more likely to increase its profits over time. As the profits improve, dividend payment by the company also rises.

In 2019, some of the top dividend paying stock in India are:

1.      Ingersoll Rand

2.      Wall Street Fin

3.      IOC 

4.      National Steel and Agro Industries

5.      21st Cent Mgmt

6.      Vedanta

7.      Merck

8.      Shervani Industries

9.      Nalco

10.  Polyplex Corp

Ninja Trader Indicators is one of the best tools that can help you identifying the Structure of the Current Market while giving you better understanding of market dynamics, so that you make right decisions on investing in long-term and short term stocks.

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