Can I buy Sun Pharma and Yes Bank shares now as it hit 52 weeks very low?
Original Answer written at >> https://www.quora.com/Can-I-buy-Sun-Pharma-and-Yes-Bank-shares-now-as-it-hit-52-weeks-very-low/answer/Vinoth-Kanna-26
Strictly No. Just because a stock hits 52 week low, you cannot think that it will not fall further.
Stocks do not travel between 52 week highs and lows.
Best stocks are the one that keep hitting new 52 week highs.
Fundamentally analyse stocks before you enter them. Check for a good sector outlook.
Check for good Margins%, ROE%, ROCE% and earnings yeild.
Check for decent PE ratio and Price to book value.
Check for better current ratio, Decent cash in hand, good cash flow and low debt stocks.
Check for Past annual growth in sales and profits.
Check for Promoter activities and mutual fund activities for last 2 years.
Make a list of fundamentally good stocks in the sector and note down the above parameters.
Find average PE and average Price to Book in the sector.
Read annual reports.
Check technicals. Use both daily charts and weekly charts and know the short term prospects from Dailly charts and long term prospects from weekly charts.
Arrive at a decent target price. Search for a good SL in charts.
Invest in the top 2 or 3 stocks in the sector. Review the stocks every quarter.
Build your Wealth the right way!
Start being a responsible investor.
Tip to understand if the stock hitting 52 week low is good:
- Promoters increasing stake.
- Mutual funds increasing stake.
- Stock finding good support on weekly or monthly chart. (So you have a support and a SL)
- Go through recent news about the stock. Ensure that the stock you invest is clean.
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