How to Pick best stocks?

Check the Debt of Particular company. 

Then Analyse with Fundamental Analysis and Technical Analysis

Reading Financial news

Use Software like investing.com, tradingview etc

Stock perform well when it is above 200 MA on daily charts 

When RSI is above 60, then stocks is perform well in weekly charts

HAPPY INVESTING & HAPPY TRADING

How to check if stock is overvalued or undervalued?

 The most important formula to understand the valuation of company i.e. Price to Earning Ratio

The profit of the company should ideally decide, whether you should invest in the company or not.

If the profits are increasing, more people would be interested invested  in the company, this would increase the demand for the company, eventually the share price.

If the profits are falling, people would like to sell their shares, this would eventually increase the supply and low demand, results in fall in the share price.

The share price should ideally move in relation with earning:

PE Ratio:- Price per share divided by Earning per share

In an ideal world, share price should move with the earnings.

That does not happen in real world, sometimes the price goes much above even though the earnings are not too high, this would be due to multiple reasons like macro environment, Govt Policy, Lot of Inflow money, Expectations of better earnings in future and sometimes without any reasons.

First, check the PE ratio of the company last 3 years

• Identify the median PE
• Then compare the current PE with median PE
• If the current PE is morethan the median PE, then company is overvalued.
• If the current PE is lessthan the median PE, then company is undervalued.

Secondly, you need to look a PE of the Industry. For example, if Infosys is trading at PE of 25 then what is the PE ratio of IT industry.

There should not be too much of difference if companies at par.

You can see the median PE in screener.in 

Happy Trading & Happy Investing