Analyze the Business

Understand Business
  • What is the product/service?
  • Is the product/service in demand?
  • Is there business in a growth industry?
  • Is the management good?
  • Does the business any moats or switching costs, network effects, or ecosystem effects that protect it from competition?
Fundamentals or Valuation
  • Stock Price to Sales
  • Stock Price to Earnings
  • Dividend Yield 
  • Growth Rates
  • Compare to its own historical values
  • Compare it to its peers
  • Compare it to market average


Analyze the Stock

Fundamental Analysis

Technical Analysis

Stock is Overvalued

Stock is Fair Value

Stock is Undervalued

  • If you own stock already, consider taking profits - tax consequence
  • Sell a call option against your position
  • Hold 
  • Sell a call option above the current price against your position
  • Sell a put option below the current price
  • Create a new position or add to an existing position
  • Sell a put option instead of directly buying
Technical or Price Action
  • What is the price action trend - up, down, or sideways?
  • How is the stock price compared to its own moving average?
  • How is the stock price compared to the market?

Up Trend


Down Trend

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