One great way to analyze a stock is to first create a watch list of stocks that you monitor or trade on a daily or weekly basis.
Then, at night or over the weekend, take some time to evaluate the daily charts of these stocks. Look for candle setups such as hammers, shooting stars, dojis, etc. Also look for significant chart patterns such as Head & Shoulders, Inverted Head & Shoulders, Slanted Head & Shoulders, Double Tops or Double Bottoms, etc. I use the 20, 50 & 200 Exponential Moving Averages (EMA) on my charts because they offer great support and resistance areas for the stock price to either bounce (remember, a bounce is as good as a fresh cross) or reverse trend.
Once I have found a pattern or candles setup, then I like to change my time frames and look at the 60 Minute and the15 Minute chart time frames over the previous 10-20 trading days for my entry points. A lot of times on these smaller time frames you can draw trend lines that offer support and resistance points that you can use to time your entry and exit points. You also may find pattern setups that could trigger bigger moves. Once you have found a stock candidate to trade in accordance with your trade plan, then you need to make sure you know where to set your stop loss and profit targets. These are crucial; use them to manage your trade so you can control your emotions and not end up with a bigger loss than you are willing to accept.
Analyzing stocks really does not need to be that hard. All you need to do is simply create a plan to analyze your trade candidates and use that plan to look for your next winning trade.
By Jason Ramus