How to Pick Stocks: Fundamental + Technical

Step 1: Define Your Criteria Before You Screen

Stock picking starts with a filter, not a feeling. Decide what kind of company you want before you search. Growth investors look for expanding revenue, rising margins, and a large addressable market. Value investors want low P/E, P/B, or EV/EBITDA relative to peers. Income investors need consistent dividends and payout coverage.

Step 2: Fundamental Analysis

• Revenue growth: Is the top line growing year over year?
• Profitability: Positive gross and operating margins? Free cash flow positive?
• Balance sheet: Debt/equity below 1x for most sectors; cash to cover near-term obligations?
• Valuation: Is the P/E reasonable relative to growth (PEG ratio)?
• Management: Do insiders own shares? Capital allocation track record?

Step 3: Technical Confirmation

Even the best business can be a bad trade if bought at the wrong price. Use the chart to improve your entry. Look for stocks breaking out of consolidation on volume, or pulling back to a key moving average in an existing uptrend. Buying into strength with technical confirmation reduces the chance of catching a falling knife.

Step 4: Know Your Exit Before You Enter

Define your stop-loss (where you are wrong) and your target (where you take profits) before placing the trade. Write them down. Stocks without a plan become long-term holds by accident.