First and foremost, the stock must be attractive based on fundamentals. An important aspect to consider is whether large institutional players like FIIs and mutual funds are starting to buy selectively in the market? That is the first indication that the market fundamentals are looking up and institutional interest is building up. The earlier you catch this trend, the better it is for you as you can get in before the trade gets too crowded. Have you looked at what the informed insiders like the directors are doing? That can also give you useful clues. Do you see promoter groups gradually consolidating their holdings in the company? Do you find companies eager to go for buyback of shares to give a signal of the fundamental strength of their companies? These are signals that the worst may be over for the market overall and it is time to buy. Also you must be very cautious if some informed insiders are selling in the stock market as they probably know something which you don’t.