Factors to consider while buying a stock

1.     Make sure the stock is trading closer to the 52-week low than the high and also has upward momentum.

2.     Average volume should be around 50,000.
3.     The PE ratio should be somewhere between 1.0x and 10.0x.
4.     Earnings and cash flow per share should both be positive with positive growth over each quarter.
5.     There is no specific market cap to look for, just be aware of the risk/reward trade off of each size and their stability as well.  (Personally, all of my highest returns have come from mid caps.)
6.     Beta is much like the market cap, in that there is no specific beta to look for.  It just depends on risk tolerance.  However, if you have a longer time horizon to invest, I would recommend a higher beta and vice versa.
7.     Look for stocks that offer dividends.  Dividends are usually, but not always, a sign of good financial health.
8.     Look at the open interest on options chains for a specific stock to see how many people are planning on buying and selling and at what price.  This basically serves as an opinion poll on the stock’s expected performance.
9.     Always consider the amount of shares CEOs and other executives are buying and selling, to get an accurate picture of what is happening on the inside.
10.   It may be a good idea to watch stocks that are constantly in the news.  Stock prices will often reflect the investors’ perception of the stock, which shows the volatility.    
                                                                            ---- Ajith Bsc MBA