Share Price: The Backbone Of Stock Market Analysis

By Author: Niveza Investor Exchange
Total Articles: 14
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Share price with the fundamental and technical terms depict“One for all, and all for one” scenario for all NSE BSE stocks in the Indian stock markets. Share price acts as a catalyst not just for all NSE India and BSE India stocks but also for the world-wide stock markets. Hence all these terms revolve around share price. It is said that per share price of the NSE India and BSE India stocks, in isolation has no value in fundamental analysis for the investors. However, share price personifies the number “0” which has no value of its own but enhances the value of others.

Our vital term Market Capitalization reveals the value of the company and is the important determinant of returns from investor portfolio i.e. how much it costs to buy a particular NSE India or BSE India stock. Market-cap is nothing but share price multiplied by number of outstanding shares!

Share price is inevitable for Price/Earning Ratio, which reflects the capital structure of the company and shows how much a company is paying back to its shareholders in proportion to its share price!

Price/Book value determines the level of safety ...
... associated with the stock investment. It compares the share price with the book value per share and states how much a company is able to create value for itself out of the given assets.

Share price also plays a vital role in deciding how much the investors are earning in the form of a dividend, from each rupee invested into a stock. There are many other important fundamental terms which employ share price indirectly to arrive at a given value.

Technically speaking, the share price discounts everything i.e. the current share price reflects the whole information and hence in the technical analysis the historical share price movements and patterns that the share prices form depict the future share price trends. The systematized movement in the share price reveals the mass investor psychology on the stock charts.

Ultimately we can say that a share price ,our stock market zero, cannot boast its existence but can definitely bewilder the position of others on its absence!

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