Hitesh portfolio

@Shakti_Srivastava

CDSL gave a breakdown below 1350 (these are levels on GMMA charts, so can be approximate levels, not absolute levels) and went to down and took support at around 1050 and gave a bounce to retest breakdown levels, and reached slightly above that and then started falling again. Currently it seems to be around crucial support levels, but structure does not seem too encouraging.

Personally I would like to see how it behaves for next few trading sessions and then maybe take a call. Its another of those stocks that had a fantastic run of almost 8-9 times from Covid lows after which I guess most of the positives were baked into price. I don’t track it fundamentally so cannot comment on that aspect.

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Hitesh bhai your views on GIC and PNB Housing…Both are in sideways / downtrend since past week and seems breakdown is on the cards…

Sir, Looking for your views on Dlink?

Hello sir, wanted to know your views on ETF investing/trading.

Strategy where one buys ETFs based on charts with having broad view on fundamentals of the sector. Similar to TechnoFunda but only limited to ETFs.

Something similar to this as well: Momentum based ETF rotation - Amazing backtested results - Need Reviews

If you could share any resource on the same that will be great.

Regards.

@Riddhi_Shah

After the rally of past few weeks, both GIC HF and PNB HF are showing weakness in near term. View remains same as before but I will keep watching key support levels and act accordingly.

We have a largely sideways market trapped between nifty levels of 17770 on downside and 18250 on upside. Till we have a clear breakout on either side, it will be difficult to take a call on market direction. My guess is if we breakout on upside (needs to be seen), then all these bullish patterns will play out, otherwise there can be breakdowns and false breakouts. Seems most market participants are jittery even on days when nifty is up or sideways.

@saurabhshares I don’t track Dlink…

@arjunbadola I am not into ETF investing, so not much idea about the strategy.

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Hi Hiteshbhai

Can you please share your views on Mold Tek Technologies. This has crossed it’s all time high recently.

Thanks,
Mehul

Hitesh sir during choppy market conditions most of the breakout doesn’t sustain . every three out of four stock follow the market trend and even good relatively strong doesn’t go up even if they move up they immediately give up the gains so how one should participate and would should be the criteria of stock selection in these conditions ?

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hi Hitesh bhai could you please share your views on Bajaj Finance, I feel the growth in AUM in slowing down and the bottom line, will it be a compounder? and what will be the PE if it become a compounder rather than a fast grower?

@yourraj

Best course of action to pursue in choppy markets is to sit aside and wait for markets to get into uptrend. Maybe take a vacation, read books, do anything that keeps you happily occupied.

But if you are a compulsive investor who cannot do the above, it makes sense to figure out which sector/segments of market offer the best chances of making money. In other words, try to figure out which are sectors in market fancy. And try to focus on those sectors and on good companies in those sectors.

Just to give an example in current markets, financials with cheap valuations which are coming out of prolonged period of underperformance and are seeing improving fundamentals are seeing good uptick. Here too some stocks especially some of the PSU banks have gone up a lot, some of them having gone up 3-4 times in last few months. With these kind of run ups, most of the positives are baked into price. There can be the odd situation where results are so good that fundamentally there could be more upsides to price. The other basket is of PSU companies that have been ignored for long. Cap goods and defence seems another basket of interest. So one can go through these type of sectors and try to find out good trade set ups based on techno funda parameters.

And even in choppy markets, some decent results are well rewarded by markets. Mainly because there could have been a positive surprise within those results. So personally I try to find out situations where there is price -performance disparity and try to play those.

Case in point being the results of PNB HF today. Stock price after hitting levels of 600 had retraced to levels of 530 and today after results there was a good upmove to reach levels of 560 with good volumes. It gave a good candlestick close (wherein body of candle covered bearish bodies of past 3 candles) today with good volumes. My guess is once markets stabilise and resume uptrend, these type of stocks should outperform. The recent correction from high of 600 to below 530 could have been a routine correction or a shakeout, whatever we want to call it.

So idea should be to find trade set ups where chart pattern is good and results are expected to be good. Question is how to find out if results are expected to be good. One way here was to follow the housing finance segmental results of companies that have reported results till date. Other is to listen to last couple of concalls and go through presentations and manangement articulation in annual report etc. In PNB HF all the above things were possible. In GIC HF, management does not conduct concall so its more a leap of faith.

@mehul75 I don’t have any idea about Mold tech tech.
@srikanthg I don’t track Bajaj finance.

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Hi Hiteshji

I had a question regarding Momentum investing. I have been practicing only pure fundamental investing since few years.

As you had mentioned earlier in one of your posts that I have bookmarked where “One up on wall street” by Peter Lynch is listed as first book on fundamental investing and I can very well relate to it. This was the first book that I had read on investing which introduced me to this world (I am sure like many others). After this, I have read many other books but this one has a special place and still during times of turmoil (both inner & markets related), I happen to re-read some pages randomly and every time find new learnings.

I would like to know that according to you, which book can you consider as the “one up on wall street” of Momentum investing strategy. Something which would be as simple to read, yet with intricate learnings, and can help opening up new doors for any person willing and ready to open towards Momentum investing…

Thanks!

I would like to know, if your question concerns with technical analysis too, because I guess TA plays a role in identifying momentum through charts, without which I think it is hard to to ride the entire momentum, even if one is knowledgeable about sectors which are turning and has identified a trend early with the help of fundamental analysis alone.

I don’t know if momentum investing is possible with pure fundamental analysis alone, by looking at sector rotation, having a top down approach.

I am trying momentum investing with the help of TA, hence the question.

@hitesh2710 Hope you don’t mind the question asked in the thread.

I think I have specifically not asked this question and left it to Hiteshji to decide and suggest a single first book to enable “open the door” for Momentum investing.

Once the door is opened, technical analysis/stage investing etc. would be like further enablers. I do not think even the best book on technical analysis can enable “open the door” the way “one up on wall street” does for fundamental investing or even investing in general. (It may be different for others, I am just talking about myself here)

I like your question but would really request @hitesh2710 ji to suggest something on the wholistic aspect.

Rest would completely leave it to him to enlighten me on my first original question. :pray:

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@Investor_No_1

The books I found game changing (and approach changing ) for me was the Next Apple by Ivayly Ivanov. In fact it was the first book I read on the subject, though I had read How to make money in stocks by William O Neil many years back but somehow did not take out much from it. Once I read Next Apple I recalled something similar mentioned in O Neil’s book and hence re read it. O Neil is the grandfather of techno funda investing. Then came Mark Minervini’s books.

So in order of preference I would go for Next Apple, How to make money in stocks and Minervini books.

Here momentum investing is slightly different from purely technical analysis. It deals more with stock prices crossing important landmarks like 1 year, 2 year, 3 year, (so on and so forth) highs and the fundamentals at that time. There is not a lot of mumbo jumbo in Next Apple. Just plain strategy and an attempt has been made to teach the logic behind this strategy. I loved the book. He has taken only certain parts of How to make money book and made a good strategy out of it.

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Thanks a lot Hiteshji for, like always, clearing the clutter and enlightening us!

You have beautifully answered the next question that would have come to our minds.

I would definitely read these books, thanks to you first and then, of course, the authors :slightly_smiling_face:

Hello Dr Hiteshbhai,

Not sure its significant or not? Hence asking.

How you see high promoter holding, which need to draw back to 75% in 3 years by SEBI norms (hope am correct), affects stock price when the event triggers.

As ex Aether Ind - promoter holding is 87%. They need to bring it back to 75% in 3 years. When they do it, does it effects stock price? If they do via block deal the discount if any will be low single digiti which may not effect much but what will be the other way? Do they prefer to sell in open market?

Any such example in your investment journey?
Thank you for your time and knowledge.

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Hitesh bhai

Do you track/have views on meghmani finechem. On chats, like every other chemical company, it is also on a downtrend. But if you see the results off last few quarters including December 2022, the business seems to be doing good

Hello hitesh bhai, as the market is in complete panic I request your opinion for soothing the nerves of many small retailers like me. My questions are as under

  1. how long do you think this volatility lasts?
  2. will there be any derating on bank’s valuation citing the adani risk as it is not immediately defaulting ?
  3. how this adani event would end or is it just the beginning?
  4. would this be another event like Harshad Mehta and ketan Parekh ? What are the chances for markets to fall in same kind of fashion?
    Would be very much helpful if you answer the above questions as many people would have been trapped in banking stocks and adani.
    Thanks in advance.
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@Deven

Its difficult to generalise the kind of situations you have raised. There can be no single right answer for such quandaries. If the company in question is doing very well fundamentally all the supply that comes when promoters decide to dilute stake would be absorbed gladly by willing buyers. Problem is when markets are weak and company does not do well in terms of business. Its a painful situation in such a case.

I do not have any ready examples to share for such cases, or examples comparable to Aether inds which you shared.

@ram1984 I do not track meghmani finechem. Promoters were blamed for wasting shareholder money when they tried to buy expensive assets for personal use, if I remember rightly.

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@Vikky9995

Regarding the current market situation, I think this Adani group shares meltdown was something that most investors expected from time to time, but no one knew when and what would be the catalyst for that. Any promoter/group that goes on excessively fast expansion is bound to hit a road block sooner or later. In this case it took Hindenberg report to create that roadblock. How it unfolds from hereon is anybody’s guess. I personally never invested in any Adani group shares except a brief period of few days in Adani power when chart pattern looked really good when it was around 100 Rs. But there too I exited with small gains of 15-20% as I never was comfortable holding even trading positions in the group shares. Since then even after the current meltdown the stock price is more than twice original price I bought.

The good thing in Adani group business is that they hold some really solid assets like gas pipelines, airports, ports, cement so on and so forth and their execution capabilities in all the companies they have is superb. Valuation is another thing and for the markets to decide.

Personally I don’t think this could be a Harshad Mehta or Ketan Parekh event. But I can be wrong, so don’t go by my opinion.

Coming to actual market situation, as I mentioned before, Nifty was caught in a range of 17770 on downside and 18250 on upside. That range broke yesterday and we witnessed swift fall in Nifty and index took support at 17550, which was 200 dema range. In September also when 17100 which was a key support broke, the 200 dema which was then at 16900 levels offered support, and again in October before we had a good rally. Now we need to see how this level in and around 17550 region holds out and offers support.

Coming to how we have to look at the markets, I think we have had plenty of experience in such situations because we have had 3 major falls since Oct 2021. Each time closer to bottom there was widespread fear of further falls and we saw markets recover and post strong rallies.

How long this Hindenberg report overhang on Adani group lasts is anybody’s guess, but I think after a point, the effect of this imbroglio on overall markets will start getting diluted and companies with good results and prospects should start outperforming. A lot of people on various Whatsapp groups and other media have put up their own theories, conspiracy theories and what not, regarding Adani problems and their after effects, but I think nobody knows how this can play out, so its better not to waste our time on such aimless pursuits. Instead time will be better spent on unearthing future winners.

My strategy as usual is to try to increase allocation to higher conviction bets where I feel story is playing according to what I visualised. In current times we have seen good results from a lot of companies and even the commentary regarding future quarters have been very good. And still stock prices have not really rallied much. I booked around 7-8% loss in one of my trading positions and added to one such company where results are already out, commentary is strong and price and valuations are attractive. ( I won’t take names for the sake of propriety, but one can take a look at many such companies and take a call. )

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Hello Hitesh Bhai,

If someone is inclined towards buying Adani stocks like Adani ports or Ambuja cement which are fundamentally sound businesses, what should be the strategy? How can one look at it technically and try to make an entry? Thank you

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