It takes confidence to hold stocks through the ups and downs of the market, but that it is difficult to have strong confidence if all you do is focus on charts and patterns. We won’t lie, in our early years of trading, we spent relentless hours watching charts, learning patterns, and understanding things like the “MACD” and “RSI.” But as the years went by, we noticed that it was difficult to have consistently positive results relying on just technicals.
By technicals, we mean indicators, oscillators, volume, charts, and patterns.
Yes, technicals are a big element of our trading approach, but we don’t rely on them solely to find trades. In fact, sometimes we don’t look at technicals until we find a name with strong fundamentals.
What are fundamentals?
Fundamentals include financial strength, sector/industry performance, and the overall health of a company’s business model. We’re talking about things like revenue growth, margins, debt levels, cash flow, and even broader trends that affect the sector a company operates in. For example, an AI chipmaker isn’t just attractive because the chart looks bullish, it’s because data centers are pouring billions into infrastructure, giving that company years of potential demand.
By layering fundamentals on top of technicals, you give yourself conviction. Conviction is what helps you hold through volatility, avoid panic selling, and stick with positions long enough to realize meaningful gains. A stock with weak fundamentals may bounce on technicals, but it usually won’t sustain the move. A fundamentally strong stock, on the other hand, can reward you even if your technical entry isn’t perfect.
At Hyper Stocks, we treat fundamentals as the foundation and technicals as the timing tool. Fundamentals tell us what to buy, while technicals tell us when to buy. Combining both gives us the confidence to hold through the noise, and in trading, confidence is everything.
Our approach:
Traders who actually want to make a steady stream of income from the market, whether as their main source or a side hustle, must treat it like a part time or full time job. That means you have to dedicate a part of every day analyzing stocks, not just for strength in the charts, but also for financial strength and exciting new projects.
Hyper Stocks prides itself on creating a weekly watchlist of 6-10 stocks based on relative strength and fundamentals. As we compile these watchlists week over week, it builds a large database for us to refer back to when a sector turns hot or a catalyst drives us back to a specific stock. For example, if we analyze stocks in the travel sector and we find one that has strong fundamentals (financial growth), then suddenly new data comes out that travel demand is rising significantly, we’ll immediately look back at our analysis and we have a name in mind to trade or take a position in. This approach can be applied to all sectors and industries, and it will build a solid foundation for any trader to constantly refer back to.
Key fundamentals to analyze
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Revenue growth
How much is the company selling? Are sales growing or declining? How about future projections? It’s not enough that a company has had a strong sales record, are sales expected to continue climbing at a strong pace?
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Net income / profitability
Sales and revenue are not enough, investors need to see profits. That is especially true when it comes to companies that are already developed and “mature.” Investors can overlook negative net income in young companies with high revenue growth, but when revenue growth slows down, the company must begin delivering, or at least giving a timeline to profitability. Profitability leads to free cash flow, which leads to share buybacks and dividend payouts, returning more capital to investors.
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Balance sheet
How much does the company have in assets vs. liabilities? The obvious answer here is that you want more assets than liabilities. But you also have to keep in mind the sector or industry the company operates in. If it’s a manufacturing company, they’ll likely have a high level of liabilities because of the costs it takes to produce. A software company, on the other hand, shouldn’t be weighed down with too much debt. Look closely at metrics like the debt-to-equity ratio, current ratio, and overall liquidity to gauge financial health.
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Cash flow
Even if a company is profitable on paper, what really matters is whether it generates strong cash flow. Free cash flow is particularly important because it shows how much cash is left after covering operating expenses and capital expenditures. This is what fuels growth, acquisitions, debt repayment, and shareholder returns.
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Valuation
Finally, you have to ask: how much are you paying for the business? A strong company can still be a poor investment if its valuation is stretched too high. Metrics like price-to-earnings (P/E), price-to-sales (P/S), and price-to-free-cash-flow (P/FCF) help you measure whether the stock is undervalued, fairly valued, or overvalued relative to its peers and historical averages.
Fundamentals may not be as flashy as chart patterns or momentum indicators, but they are what give your trades staying power. When you understand a company’s revenue, profitability, balance sheet, cash flow, and valuation, you’re no longer guessing, you’re investing with purpose.
At Hyper Stocks, our edge comes from combining these fundamentals with precise technical entries. This dual approach not only improves trade selection but also strengthens conviction, which is often the deciding factor between cutting winners too soon and holding long enough to capture meaningful returns.
If you want to move beyond short-term noise and build a repeatable trading process, start by focusing on fundamentals. Over time, your watchlists will turn into a powerful database, your confidence will grow, and you’ll find yourself trading with a clearer strategy and stronger results.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of capital. Always do your own research or consult with a licensed financial advisor before making investment decisions.