Best Swing Trading Strategy

Financial Trend Strategy

Quarter Results –

First check results of company for at least last 3 quarters, all these results should be positive, more quarter results are better. This show that the company performing well. It is evident that the company’s sales, profits and customers are increasing. Therefore, by taking advantage of this trend, one can get very good returns.

Profit and Loss –

Check the profit and loss sheet of company, it must show that the sales of the company have increased. Expenses should be low or constant, if expenses are increasing, sales and profit should also be increased. The company is requires to pay regular taxes to the government, this shows the transparency of the company.

Balance Sheet-

If the reserves of the company are high, even if there is a financial crisis, the company can manage its business well, so the reserves of the company should be good. The company should not have borrowings, if there is, its graph should be downward. The total assets of the company should be stable or increasing, so when the company faces financial difficulties, it can use these assets to handle its projects well.

Cash Flow –

It is more important to look at the cash flow sheet than the profit sheet of the company. Even if the earnings per share (EPS) of the company are high, the cash flow per share is important. If Cash flow per share should be good and free cash flow should high, its prove company’s strength.

Before buying any share, check its share holding pattern. The promoters should have at least 45 to 50 % stake in it and not even 1% of this share be pledged. Also FII, mutual funds, insurance company should have good stake. Due to this, the stock does not volatile and there is a higher chance of giving fixed returns.

Valuation –

Check the valuation while buying shares. No matter how good the company is, never buy stock at a high price on impulse. Even though it will give good return in future but we should not overvalue it. If that share available at an attractive valuation, buy it, otherwise ignore it. This gives you better chance of getting good returns in the future.

Technical Move-

All things being right see how that share is technically. This includes MACD, RSI, Moving Average or whichever indictor you feel most confident about, if it shows a bullish trend, grabs it.