Using a “Bottom Up” approach for fundamental analysis means beginning your analysis on a microeconomic level right from the start, typically starting with a particular company itself.When doing any type of fundamental analysis, one of your goals is to look at how different factors affect performance at each of the specific levels being analyzed.
The BSE Sensex is at 18,000-plus points, just 16% away from its all-time high. Despite concerns over the sustainability of global recovery, the Sensex has kept on rising. India has planned infrastructure spending over Rs 2lakh crore. This has helped the corporate sector perform better and resulted in rising valuations of large cap Sensex companies. These companies were hammered in the wake of the global economic slowdown after the Lehman Brothers bankruptcy.
Investors need to apply themselves in picking the under-performers. In simple terms, even assuming that Sensex is range-bound between 17,000 and 19,000 points, Sensex stocks have limited space on the upside.
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