Dear Hitesh ji,
Wanted to gather your views on paper stocks. With the recent ban on single use plastic do you think the paper stocks have a long runway ahead of them? Also, will be grateful if you could share your views on Satia Industries 
Best regards
@hitesh2710 Jagran Prakashan seems to be holding the fort for a long time and consolidating. With consistent promoter buying and buybacks, will there be a positive upside in this counter? FIIs have marginally increased as well.
hello hitesh sir , hope you doing well sir, is promtor is increasing stake in company approx 5% , from open market, this criteria should to take positive or how to view this type of company, thanks in advance sir.
Most of the paper companies have raised product prices recently and pulp prices seem to have corrected slightly over past few weeks. And price wise most of these paper stocks after completing their retracements to earlier rallies now seem to be showing some strength.
I am not too sure about the kind of runway these paper companies have ahead of them. In most cyclicals, its difficult to predict how far the cycle is going to go.
In recent past, we have seen the fate of oil producing companies like ONGC where only one diktat from govt pricked the story for the company. Similarly steel companies also suffered all of a sudden and the steel rally gave way and stocks corrected heavily So its difficult to get these cycles absolutely right. Its better to keep a mental stop loss and ride the rally if you have got in at right price.
Satia chart seems good. Plus its capex is coming on stream at an opportune time when the paper sector is hotting up. How far it can go, is something I find difficult to predict.
@Rupee_Millionaire I do not see any kind of strength in Jagran prakashan stock price. The sector has suffered due to market perception that it is a dead or a dying sector, with the onslaught of online news and other reasons. It can go up in the ocassional bounce, but its difficult to see if there is going to be any meaningful upside unless something changes drastically for the sector and or the company.
Promoter buying (if the promoter is reputed) is always a good sign regarding the company’s prospects. However there are many more factors affecting the company’s future and hence its stock price. So promoter buying cannot be seen in isolation while considering an investment thesis.
Hello Hitesh Sir. I understand that you do not track Rolex Rings but I just wanted to know your viewpoints on following.
None of the independent directors hold directorship in other companies and all are appointed as independent directors in 2021 (The appointment of all independent directors in 2021 is fine considering that they had to do this because of going public, as per the regulations?)
All key management positions are held by family members
Bharat Jiten Madeka who is the President - Operations & Human Resources of the Company, has a diploma in engineering (mechanical) and has 11 years of experience. He had remuneration of ₹ 8.06 million in Fiscal 2020. On the other hand, Hiren Dilipbhai Doshi who is the Chief Financial Officer of the Company, holds CA degree and has experience of more than 22+ years (out of which 11 years with Atul Auto) has remuneration of just ₹ 3.49 million in Fiscal 2020. Isn’t this odd?
When company itself was reeling under the load of CDR and delayed loan payments, why it has given loans to directors and another company called Aryan Arcade. This company is also registered in Rajkot and is in the construction business.
As per DRHP, neither company’s name nor the logo is registered. This poses a risk of infringement or misuse of the company’s name/logo. Shouldn’t this be dealt with? I mean how difficult is it for a company with 1000+ Cr revenue to register its name & logo, considering that it poses an identity threat?
Just wanted to know how one should look at these points? Do you consider these as big red flag?
I do not track Rolex Rings. But the simple answer to all the queries you raised is that
As long as the business does well and stock prices go up, everything’s fine. Once a downtrend starts and stock prices start falling precipitously, the narrative changes and all these negatives assume big proportions.
You will find something or the other to worry about in most stocks you analyse.
A physician who does not know how to treat hypertension will not know what to do even if he measures the blood pressure most accurately in the world to the last decimal point. We should have the capability to infer accurately from whatever we analyse. Otherwise it just remains just analysis, of no use. 
Totally agree. We cannot be so strict about these things. A relative of a promoter working in a company, with low qualifications, will.obviously draw more salary than an employee with higher qualifications. Just say, if you start your own company, and your son starts workikg with you, will you jot pay him higher salary irrspective of his experience and qualifications?
Take the case of Maulik Mehta of Deepak nitrite or Kiran Divi of Divis labs or Roshni Nadar of HCL technologies…All of them drawing salary in crores, and rightly so…They will not wait for next 25 years to reach that salary levels just because other senior employees are drawing lesser salaries.
Thank you Hitesh sir. Makes a lot of sense and helps in building a perspective to look at the things in a practicle way.
How to profit from Bull and Bear Markets by Stan Weinstein. Finished reading this book. This book was written in the 80s but its wisdom still holds true.
The beauty of the method described in this book lies in its simplicity. He has taken the concept of following the 30 week moving average to another level. And the staging he describes is easy to spot on the charts for someone who has been looking at charts since a long time. (should be easy for the untrained eye too. ) I think even those who do not practice technical analysis should read it to get an idea about how stock prices move.
Its an easy read and some parts of the book related to fund investing etc can be skipped if we do not indulge in it. For those not having access to the book, or not interested in reading the book, @StageInvesting has done a good job of introducing the subject.
I think combined with William O Neil’s methods and Mark Minervini’s methods, Weinstein’s method would add value to the analysis of markets and stocks.
Hitesh Bhai, the auto index and also most of the individual auto stocks, auto ancillary stock are showing lot of strength. The 2W and 4W unit sales also seem to have doubled for the Q1 FY23 in comparison with Q1FY22. However, in my view the last year is not a comparable quarter on account of low base due to second covid wave. If we see the unit sales of these companies, they were much higher during 2018 and 2019 and now we are slowly reaching those levels.
The stock prices however, in many cases, have surpassed even the highs of 2018-19 and are making new highs or are at least inching towards it. Do you see anything fundamentally/structurally changing in the sector.
Curious to know your thoughts Hitesh bhai on Neuland and Strides charts now.
Neuland has gone up 30% very quickly in the past 10 days on moderate volumes and is now at 200dma. It did consolidate at 1000-1050 levels for a while, does this seem like a credible base or would this rally be suspect to getting sold into since it has come on low volumes and there may be a 200DMA halt?
Strides on the other hand seems to me like it has formed a reasonable base on good volumes over the past few weeks, and there may be some upside here.
I’m invested in both these stocks on a fundamental level. Trying to understand how to read the charts better to trade around volatility, if any. Would love your guidance.
There are times when numbers take precedence and other times when narratives take precedence in stock markets. Auto and auto ancillaries have long been underperforming ever since 2018-19 because of one or the other reason. Post Covid there has been huge demand for autos and the first to recover has been the CV space. Next I guess is 2W and then passenger vehicles. For a market starved of a favoured sector it seems the sights have been fixed on autos.
Demand has been very robust in passenger vehicles also but part of sales numbers are suppressed because of inability of companies to deliver on the demand due to shortage of chips and parts. Once this is resolved we can see decent numbers going ahead. Or atleast that is the market logic reflecting in stock price movements.
A lot of unlisted PV players like VW, Skoda, Hyundai etc have been doing brisk sales and I think we should focus more on dominant auto ancillaries. We have limited choices in auto sector but many choices in auto anc space and a wide variety of businesses to choose from.
Stock markets are often early in recognising a sectoral trend, whether that fancy is right or wrong is seen only in hindsight. But currently auto and auto anc seems to be a sector in fancy. When price movements indicate where money is flowing, its better to join the party as early as possible if you are into momentum trading. Many a times by the time results come through a major part of the upmove is already behind. However currently the charts of a lot of auto sector companies seem to indicate big targets going ahead. I have my fingers crossed in this context. But as indicated many times before I have bet on a few stocks from the sector as a basket.
@Vineetjain111 I dont follow Neuland fundamentally but the daily chart shows a sort of double bottom formation with breakout above 1400 levels. And stock price currently has moved above the 30 WMA which is around 1275… Though the 30 WMA needs to turn up in next few weeks. I think there can be some consolidation before it really takes off. Though that’s only a personal view looking at charts.
Strides has had a massive fall and took support at near previous bottom at around 260-270. It still remains below the 30 WMA which is still hurtling down. Need to watch for a few more weeks before taking a call here.
Putting up a daily GMMA chart of Neuland which does look interesting. Personally no position as of now. It remains in the watch list due to the chart. Thanks for bringing it up.
Hitesh Bhai - Weekly close of HDFC AMC has crossed the upper trendline of the downward channel, which was intact for the last 8~9 months. However, price is still way below 30WMA.
Any view on such a setup?
HDFC AMC seems to have formed a short term bottom with a triangular formation as I have marked on the chart on the right bottom of the bigger triangle. But it still is below the 200 dema and the avg is sloping down. So at current juncture, one may play for a short term bounce. However if it continues to show strength, then the bigger triangle marked on the chart ( Often referred to as a Wolfe Wave) can come into play and can provide targets shown by blue dotted line. I think if someone has deep understanding of fundamentals of the business and is convinced about the medium to long term merits of the story, then the bigger triangle can be considered, provided the company delivers on numbers.
Many a times I have seen these long term Wolfe Wave play out exactly as marked and so who knows, something might be possible here too. But I tend to avoid these kind of setups when the markets are replete with clear cut techno funda opportunities.
@hitesh2710 - Hello Hitesh sir, i have been a big follower of you. Have been able to get a lot of information just by reading your detailed study in multiple areas.
I wanted to know your thoughts on Divi’s lab, pi ind, Astral and apl apollo.
Divis is down 35% from ATH. As the nations are coming out of covid impact , i am not sure what kind of impact it will have divis as it falls in pharma sector.
PI has been able to build position in the market and has bounced back close to 200 dma
Astral and Apl both uniquely positioned but they are dependent on infra…which i guess is risky sector imo
Please share your valuable thoughts on this
Hiteshji would be great to get your thoughts on below aspect. Many Thanks!
I am amazed how you achieved financial independence in just 8 years of investing journey - A lot to ponder upon and learn. I think you can really write a book on it as no one else must have written on such an achievement yet!
Just wanted to know from strategy perspective - once you attained financial freedom at age 50, did you lock the profits in safe instruments as risk management or ploughed all back again in equity now? In short, How do you protect what you achieved and manage overall risk to maintain the financial freedom. Thanks!
Dear Sir,
I read your inputs daily. Its very valueable. I am new to Technical analysis and this is my first post. Request your views on these 2 charts:
Stocks in stage 2 with positive RS. Please advise.
I have been one of the more luckier persons at the beginning of my investing career . Imagine making 2.5 times your portfolio in around 12 months in the first two major picks you bought… It was a two stock portfolio consisting of Parekh Aluminex and Lakshmi Energy and Foods… First one went up nearly 4 times and second one went up nearly 1.5 times in around 12 months after the 2008-09 correction and I had only these two stocks in my PF. I was quite full of myself having newly read the Lynch book and thought I knew it all. 
But those days I was quite impetuous and could not hold on to any stock for too long and that played to my advantage. I sold off both of these stocks and saw Parekh Aluminex go up another two times. Ultimately both stocks fell flat and now I don’t think they are listed also.
Now that I look back over those years, beginning 2009, the period from 2009 to around 2017 was one of the best periods for small cap investing, where stocks went up multifold. We had come out of a horrible bear market and no one was willing to touch small caps in 2010-11 and markets were lethargic till the time they figured out that Mr Modi was going to win the 2014 elections . In the run up to the 2014 elections, we had a very strong rally which took most stocks up and the undervalued good quality small caps even more so.
After the dumb luck episodes of 2009-10, I had latched on to The Equity Desk and learned a few things and that learning accelerated after joining valuepickr and meeting fellow investors like Donald, Ayush and others. Next came a couple of big winners in the form of Ajanta Pharma which I could ride around 18 times and Canfin which I rode nearly 12 times from my buy price. This happened during the period of 2011-2015. That gave a fillip to the portfolio returns.
There were other winners in the form of Manushree Technopak, Atul Auto, Kaveri Seeds, Avanti Feeds and in a few of them like Kaveri Seeds, Avanti feeds etc, I had bet heavily and these bets paid off.
And all this while the knowledge acquired through reading books, interacting with investor friends, reading forums, blogs etc was increasing and the cash flows from my profession were also increasing, which again was a very fortuitous thing. I was able to deploy additional funds to the above winners and the returns from these took care of the rest.
2018 was a real acid test for me where within around 18 months beginning Jan 2018, my portfolio went down nearly 30 % from peak valuations. And the rallies post the 2018 correction right up till the pre Covid rallies were not very kind to small caps and midcaps. But I was not too worried because at the back of my mind I was pretty sure that if I kept persisting, another lot of winners would definitely follow. I was sorely tempted to take a lot of my money off the table before th 2018 correction began thinking that I needed to protect my capital, but somehow it did not happen. Then came the post Covid crash and subsequent mad cap rally. By this time I had gotten into full momentum investing mode and that worked very well for me and I figured out that this was the kind of thing that worked well for me and hence started reading up a lot of books and started following a lot of gurus on the subject. The returns in the post Covid rally were very satisfying, more so because of my strategy of allocating heavily where I was very confident and had a lot of conviction. Laurus was a big winner for me with extremely heavy allocation. Sectoral bets in sugar, textiles, real estate esp Ibulls real estate (where I made a timely exit with nearly 2.5 times returns) again with very heavy allocations paid off very well.
Even now most of my networth is into equities, but I have consciously moved some capital aside to some real estate which provides me regular cash flows, plus some partnerships in businesses which again provide steady cash flows and I have my regular govt pension, and dermatology consulting practice, though I practice very little, preferring to have my time to myself and do what I enjoy the most.
I have lived through a couple of deep drawdowns in portfolio and so that is something that is not new to me. The confidence of finding the next winner is always there. And nowadays even if I get 40-50% returns within a few months in some high conviction bets, I am happy because I make up my portfolio returns through heavy allocations where I feel confident. That’s where the techno funda approach really helps. Many a times the strength I see on the charts of a company is justified by the fundamentals of the company and that gives me confidence to bet heavily. Recent example has been Guj Fluorochemicals where all throughout the recent carnage the stock price stood steady and the fundamentals kept on improving in terms of business environment.
