Schneider has given a major breakout above recent swing high of 154. However 150-165 seems to be the supply zone going by consoildation in this range in the past. So it might be a while before it takes off. If it does take off, well and good otherwise we might see some consolidaiton before a major move.
Raymond chart also looks strong with price quoting close to all time highs.
India cements crucial breakout level was 225, and if it manages to consolidate above it for a few weeks, than it can give a good upmove.
@ramanu05 J&K bank stock price shows early indications of a bottom formation and can provide decent returns for the patient investor. (this is what I infer from my reading of the charts and I may be wrong.) over next many quarters. I am tempted to take a small token position myself after looking at the charts using my proprietary methods.
I have a query wrt selling of the shares bought from momentum/technical perspective. While I have been learning on buying the stocks when they breakout or consolidation , I am still not clear about when to sell and how much to sell once the stock makes a move.
For ex, SJS couple of days back broke out above level of 510-515 with good volumes. In subsequent session it went above IPO price also but came out at the close. For the last 3-4 trading session, it was opening higher but closing lower towards the low and today it closed below 500. Clearly the breakout has not panned out as per expectation. However, I am trying to understand when could I have sold it to reduce the losses. Some hypothesis can be,
A) If is say 10% percent lower than the swing high, you reduce your positions and protect your profits or take your loss?
B) You wait for it to go below the breakout point ?
C) You wait for it to go lower as per the initial stop loss decided?
Similar query can be how to protect the profits in case the stock moves up and then starts to correct. A stock is up in 25-40% range and then fall by 10-12% below the high? Do we sell full, partial or wait for it to come near your trailing stop loss/ rebound?
These are momentum bets where business conviction is on lower side.
Kindly advise.
Nikhil
Hi Hitesh bhai,
Would like to know your thoughts on commodity/ cyclical sectors such as cement, steel, iron ore, aluminium, etc. from a 2-3 year perspective. Valuations for a lot of these companies look attractive, would like to know if you have any opinion on companies such as Sandur Manganese, NMDC, SAIL, Hindalco, etc.
SJS had a breakout and consolidation in and around 465. In fact it formed a triangular consolidation between June and August 2022 and then broke out. It has had a very short trading history.
Post IPO highs here were around 550. IPO was priced I think at 542. In effect all those who had applied for IPO did not get a chance to have any profits post IPO listing. So a lot of them were waiting to see their own purchase price since a long time. So when price went up to around 540-550, there was expected to be major profit booking as a lot of stuck investors might have unloaded.
Even the double bottom pattern that had happened between 367 and 455-465 had a target in vicinity of 550-560. In such cases where pattern targets are visible, its better to book atleast partial profits if not full profits. And rather than waiting for exact targets, try and book partial profits say 5-10% below expected target prices just to be on safe side.
In other situations (not specific to SJS), where we have entered a momentum trade, its better to keep a trailing stop loss at an appropriate place. It can be a certain percentage below swing high, or can be a short term moving average we are comfortable to use, or a retracement level to earlier rally etc.
And in the first place, try to find out an entry point which is very safeā¦ Instead of say entering in SJS at or above 500, there was plenty of chance to enter it at around 450-460 and then trail stops. I see a lot of guys buying on the day of breakout and getting stuck at much higher levels. Instead of that, we have to view the risk reward equation before taking any trade and stick to trading plan.
@Ansh_Gupta All the cyclical sectors like steel, iron ore, aluminium etc have had their day in the sun and in the past year or more stocks from these sectors have gone up multiple times over a short period of time. There are bound to be a lot of naive investors stuck at much higher levels at each level. I donāt fancy such sectors which are in stage of decline after sharp rallies. Money gets stuck unnecessarily and this could be used much more effectively in sectors which are in momentum. I had listed sectors enjoying strong momentum earlier in a post, where I remain bullish.
@KRUNALBABARIA__ I am currently not tracking PNC Infra. On charts it seems to be trying to break out. As of now it does not interest me.
I was looking to get some exposure in the kitchenware industry. I feel TTk prestige is a safer play as compared to hawkins. But Iām a but sceptical about the levels it is trading at - 990. Do you think itās make sense to accumulate it now.
TTK Prestige is equally good. Proactive management and sound business.
However, I am taking bet on Hawkins considering-
-Low share capital
-High ROCE
-Comfortable PE
-Consolidating in narrow band for quite long time
-Cooker segment is expected to grow at higher CAGR (Mentioned in TTKās concall). If this happened to be true, Hawkins is leader and should be benefited
Any view on stove Kraft?? There range is product is much wider and have very good online presence . Valuation might be little discomforting for now but I guess can be a good play for long term.
TTK prestige is a company which is easy to research into. You can go through the latest annual report (FY 22 is out), latest concall (q1 fy 23 transcript is out) and then take a call. Better still you can visit a few retail stores and supermarkets which keep their stuff and try asking a few questions of the sales guys.
I would like people to learn and take their decisions on their own rather than give my opinions. Its your own money. If you want to invest on your own, you have to learn and do the hard yards and then only invest, otherwise you will lose conviction at exactly the wrong time. I have earmarked all the resources necessary in the first paragraph, you can go ahead.
Sequent scientific is an interesting chart. It has been a market laggard by far till now, but worth keeping under observation for a technical pattern of inverted head and shoulders breakout. Many a times this indicates a strong trend reversal, providing potential for good returns.
These days everyone is into breakouts and what nots, so trying to find stocks which are having potential of bottom formation, and maybe move from hereon.
The left shoulder, head and a possible right shoulder are marked on the chart. cmp around 117. If pattern plays out near term target can be 180.
The light blue trendline from the top shows a breakout from the falling trendline and now we need to watch next stage of confirmation for a bottom formation which could be in form of inverted head and shoulders pattern. First hurdle is to cross and close above the recent falling gap zone from 123.50 to 113.25 which was posted on 8 August 2022. Stock price is making an attempt to fill the gap by trading within the boundaries of the above gap (i.e between around 110-125) since past nearly 13 trading sessions.
Too early to call a bottom, but worth observing. 200 dema is at 137, which would be another level to watch out for.
@hitesh2710 Sir, there is a lot of noise these days regarding the defence sector, how does one go about itā¦what essential parameters should one see for entering into a defence sector scripā¦
How can I take a call on D-link. It is on breakout. Good sales growth is there. Company is into constant margin of 6% types. Not sure if the breakout momentum could sustain. How to take a call whether to enter or skip? They dont manufactor in india but talks about make-in-india. but i dont see any fixed asset increasing or cwip is 0.
Hitesh Bhai, What are your views of delivery %age vis-a-vis stock price movement? Do you look at it for any buy/sell ādecisionsā on your short-term bets?
Example:
The price of Tejas Networks increased nearly 30% in the highlights sessions, whereas the delivery percentage was visibly and relatively lower (last column). To me, it seemed like in the grips of traders/speculators and the price is not sustainable in the short term. But as they say, a little knowledge is a dangerous thing so I do not want to read too much into this.
With a hesitation to clutter this thread, I am posting this here. There is no meaningful thread I could find for such topics. Would appreciate your thoughts on the patterns pls.
hello hitesh sir , hope you doing well, my question if some stock is ran up so fast almost double in short time , still we should average up or book profit or do nothing , might be i m price anchoring biased for stocks .thesis is still intact of stocks.thanks in advance
I donāt go too much into details of delivery percentage and all such stuff. For me the the primary parameters for finding my techno funda bets are price, volumes and some other patterns on charts and basic fundamental research to find out any possible triggers or big negatives to take a call.
In this day and age, we are bombarded by newslfow/rumours/data and this creates a lot of unnecessary noise. Better stick to basics and do what suits us and try to be good at it.
Riding a multibagger is a journey which will involve many small detours. There will be phases when stock price will go up sharply and then take pause for weeks/months, usually till earnings or positives catch up and then resume the journey.
But we cannot paint all journeys with same brush. We have to learn to be flexible in our approach and its not like One size fits all philosophy. For Warren Buffett and Charlie Munger fans, the basic premise is buy right and sit tight. And that too works wonders for someone who has the temperament for it. I have seen such approach in a lot of investor friends, who often buy and just sit tight for years without bothering about the volatility. And they also make super returns.
The other approach is the techno funda approach which involves a bit (or sometimes a lot) of churn. Its like a business with big asset turns. These kind of businesses can get away with lower margins. Similarly guys with above style, if they can get their calls right and make the most of their right calls and cut their losses quickly also can deliver superb returns.
Personally I prefer to sit tight on my long term picks while continuously monitoring the newsflow/charts on regular basis, but do not get flustered too easily by short term gyrations.
Usually when stocks run up too fast, say 50 to 100% within a matter of days or weeks, there is bound to be a pause. But if the earnings keep chugging along, the stock price will not nosedive. It may go sideways to mildly down, but we can manage to hold on without too much anxiety.
A recent example has been Guj fluoro stock. Basic trend is up but it is interrupted with short term corrections of varying degree. There will be many more examples of it.
So we have to take a call individually in each company based on how we analyse the company rather than evolve a blanket strategy to deal with these things.
The one situation where I would book partial/full profits would be when there is a parabolic move and the stock is in the news everywhere and there are research reports on it floating around and a lot of guys come on TV or other media and start recommending even after it has gone up a lot.
Your views around the following leisure/discretionary plays would be helpful. Can clearly see some offshoots of discretionary spending in this quarter.
Inox Leisure, PVR, Wonderla, Imagica, Ajwa Funworld, Nicco parks, Lemon tree and Eicher
I donāt track inox,pvr,wonderla etcā¦ I own Lemontree and have posted the charts of the company on the 52 weeks high thread. Eicher Motors is on a roll and its chart structure remains strong.
Personally I feel that there might be a change in the fancy of viewers for multiplexes post Covid. A lot of people have migrated to OTT where the content is superb, and there are a wide array of options to choose from from the comfort of your own home and at your own time.
I myself was a frequent visitor to a PVR multiplex near my place, before Covid. Ever since Covid, I have not visited any multiplex and have never felt the need for itā¦ In the comfort of my home in any room I choose, on any device I choose, I have options galore. I guess there will be many converts like meā¦ But I would atleast go to a multiplex to see how things are faring as compared to earlier.
Hello sir, I would like to ask one thing that is every stock in the market always set ATH and correct itself and it breaks its previous ATH and set a new one right. So is it good to enter a stock when it is near to its ATH and exit when it sets a new ATH so that we can get minimal gains considering the good fundamentals and background of the stock, also does this work in small-cap stocks also? Whatās your take on this? Coz recently deployed few capital in INDHotel when it was near to its ATH and now it is setting new ATH, same applies for SBI.
