Hitesh portfolio

[MS85]

This is my first post on VP and Mannapuram has been in my watchlist for the last few months, so I thought it will be good place to start my journey and make my first post.

As Hitesh Bhai correctly pointed out that 30WMA is turning up which is a good sign and 125 is the resistance to watch out for.

However, the overhead supply will be very high and there will be resistance again around170~180, plus looking at the time period of Mar 20 onwards, it seems to be back in stage 1. So even above 125,

• the high vol and pressure from buyers holding it from high levels will make it difficult for the stock to go up quickly.
• Max gain will be in range of 25~30% (its not bad).
• Vol are not drying up, so the expected increase may take more time. (Opportunity cost of deploying funds).

Note: I have learned a lot from reading this thread, and have improved my run rate in the last year or so but most importantly have grown more confident into taking short ~ medium term positions in addition to my long term holdings.

Disclaimer: Just posting to share my understanding of the stock price movement and aim is just learning and not an investment advice.

[arjunbadola]

Hi Hitesh sir,

I wanted to know what is view on GOLD as of today.

The GOLD Futures chart is trading at ATH.

CFDs on Gold (US$ / OZ) chart: heading towards the resistance at around 2073.

Fundamentally speaking,

1. The bull phase started with USA blocking FX reserves of Russia due to Ukraine war. This made other countries question that if someday they are against USA, will the same happened with them?
2. Q3 2022 was record purchase of gold by the central banks.
3. Further, if FED stops rate hike money might flow from debt instruments to higher yield alternatives like GOLD and Equities (Historically this has happened as well).
4. De-dollariszation: new currency could have some backing of gold.

Regards,
Arjun Badola

[drsandip]

Hiteshbhai,

Do you track any listed entities among hospital sector? Healthcare industry seems to be ’ in-demand’ eversince covid pandemic started & it’s kind of secular play considering rising penetration of mediclaim & growing awareness of preventive heathcare among youth?

Any stocks like HCG, Narayana, Medanta in your technofunda screener ?

Regards.
Sandip Thakrar

[hitesh2710]

@arjunbadola

Gold charts both in USD and in Rupee terms seem to be very strong. But for someone who does not play commodities, the only option is to buy Gold ETFs. Fundamentally there are a lot of factors affecting global gold prices, and its beyond my scope of understanding.

@drsandip I dont track hospital sector stocks. Its an asset heavy business, plus sometimes prone to populist govt diktats. The big positive related to the sector though is the long nearly endless runway for growth. But I see a lot of unorganised corporate hospitals coming up which over the years will provide stiff competition to most of these listed corporate hospitals.

[Shakti_Srivastava]

@hitesh2710 Sir, why not SGB instead of Gold ETFs where one gets additional 2.5%…

[hitesh2710]

@Shakti_Srivastava

You can take whatever instrument is convenient to play the gold bull run. I am not invested in Gold per se. I find many better opportunities in general market, where I feel I have a better grip of things, rather than rely on macro factors that impact gold prices.

[Satishmm1982]

[quote=“hitesh2710, post:7033, topic:658”]
The other is a category where narrative is strong and numbers are yet to be reported. Many a times in bull markets, strong narratives will lead to more than expected upmoves. And when general markets weaken, these very stocks give up most of their gains and some more. But if through scuttlebutt, and/or guesswork or some other method ( like monitoring order book in company or its competitors etc) there is strong conviction that the earlier promised growth is going to materialise sooner rather than later, there can be a case for revisiting these names, or adding more as per portfolio allocation diktats.
[/quote] → Hi Hitesh Bhai, Thanks for the detailed explanation.
Does ASAHI INDIA (Glass) come in this category?. The busness , sector wise and capacity expansion plan look good for 2 to 3 years. Can you please suggest your opinion. Thanks

[VIMAL_AGRAWAL]

Hello hitesh sir , is paper stock is cyclical or structural? recently met person demand is so high specially branded name, thanks in advance.

[hitesh2710]

@VIMAL_AGRAWAL

Paper is a typical cyclical commodity sector. During strong bull run in a particular sector, after a few quarters of superb numbers, usually the feeling that one gets is that this time its different and it is close to becoming a structural play. That’s when the sector enjoys peak margins, and then things start going south. Typically in paper, shortages play an important role in bumping up the cycles.

Remember the chemical cycle… Initially people got enamored by the term speciality chemicals. And then when all hell broke loose for the sector, these so called speciality chemical companies also started having margin pressures.

If you observe these cycles carefully, you can get a sense of how things are playing out and which phase of the cycle we are in. Only the sectors change, Rest psychology remains same.

@Satishmm1982 I don’t track Asahi India.

[ChaitanyaC]

@hitesh2710

Sir, what is your opinion regarding backtesting a trading strategy? There are many traders who are backtesting their strategies and are depending on the results they get.

You are a very experienced investor and trader, and so, you can possibly tell a lot of things about a stock, by looking at its chart, like Sherlock Holmes from a stick, so I believe you have not done any backtesting. But even traders with a few years of experience, who can code, are backtesting their strategies, talk about their win rate, draw downs, risk to reward etc. It has become important, or so it appears at least, that a strategy should be backtested to see if it can be profitable or not.

AFAIK, you are more focused on technofunda and depending upon your conviction, you take big bets, and as such, there isn’t any necessity for your style of investing/trading to backtest, or yours should not be even called a strategy, you are beyond this.

But what about regular traders, who are learning the tropes of trading manually, with good old candlesticks, some indicators, absorbing slowly, internalizing a process, and taking trades, can they continue, or their strategies also have to be backtested, only then they can go forward.

I am aware of different schools of thought w.r.t investing, there are many ways to skin the cat here, but do such ways exist in trading too, or is that, as trading has shorter time frame compared to investing and stop losses, targets exist, and positions are taken on some basis like momentum, so all these have to incorporated into the strategy which has to be backtested with the data available, otherwise no matter how hard a trader might have been working, he will end up in losses as his method is not sound, if he had backtested his strategy he would have known that.

Your views please.

Thank you in advance.

[ranvir]

Hi Hitesh Bhai …

As we all know that Pharma sector faced tremendous head winds in last 18-20 months due RM price hikes/supply chain issues, sky high freight charges and extreme pricing pressures in US generics.

The situation on all three counts has reversed wherein freight rates are back to pre covid levels, RM prices have moderated to a large extent and US is reporting very high drug shortages.

Isn’t it a good idea to go for a trade or two in Sun and Cipla considering -

Their dominant positions in India branded business and both having a very good portfolio of OTC products like - Violini, Revital, Pepfiz ( for Sun ), Cipcal, Nicotex, Clocip ( for Cipla )

Sun’s speciality portfolio like Illumaya, Cequa, Winlevi and Cipla’s complex respiratory portfolio in US doing well

Ur views on the same shall be welcome

[hitesh2710]

@ChaitanyaC

I usually consider two styles of trading/investing based on technical analysis.

First is system based, where certain definite parameters which can be fitted into a system can be used. e.g Certain moving averages, RSI, MACD, All time highs, 52 week highs… etc… In these cases, backtesting works well because most of the stuff used is objective and hence a computer program can be used to provide test results without ambiguity and these can be used to formulate a strategy. Most of the algo trades work based on rigorous backtesting.

The second system is the pattern recognition based trading/investing. Here, patterns like flag, cup and handle, inverted head and shoulders, triangles, rounding formations etc are used. Here there can be a lot of variation in interpretation of patterns and hence these are not amenable to backtesting.

I many a times combine both the systems wherein I use patterns and then incorporate some parameters which I have found useful over the years in an effort to get better results. And to narrow down the stocks further I use fundamental analysis as an additional filter.

[hitesh2710]

@ranvir

Within the pharma space, the predominantly US facing companies still are struggling with price erosions and USFDA audit related problems. The added uncertainty of USFDA actions and subsequent export ban/restriction type of problems will continue to dog the industry. In my view, the golden period of higher returns from US generic market is over atleast for near future. Companies can benefit from a few shortages here and there, but the overall picture is murky.

Companies having a bigger basket of products and multiple USFDA manufacturing facilities are far better placed than the rest. But finding value in these names will be difficult. Companies like Sun, Cipla etc at best I think can be compounders.

If one can find out smaller companies growing at a fast clip and having lower dependence on the US markets, then there can be a case at looking at these names.

The reason I personally don’t want to go heavy on pharma space is that there are a lot of tailwinds and opportunities in other sectors and from time to time these sectoral bets provide good hunting grounds.

For someone closely tracking the pharma space and monitoring developments, a basket approach with a few good companies like Sun, Alkem, DRL, Cipla, Cadila etc might work and might provide market agnostic returns.

[giridesh3]

DR. Hitesh,
I have question on KMC speciality hospitals. When I looked at the investments made in their BS I found their ratio of investment per bed is way below other peers, some even with the scale and cost efficiencies like Narayana. Obviously ROC looks very healthy due to this. I am trying to figure out if this investment shown on BS is realistic for the no of beds they have. What am I missing here?
Correct me if I am looking at the data wrong way or missing something. Ready to be corrected.
Thanks.

[fundoo]

Hitesh sir, any updates on HBL Power charts? There are heavy volumes in last 2 days but today it is not able to sustain the upmove. Is it sign of false breakout?

Thanks much

[TradingWithMind]

Hello sir, any view on Control Print and Tanla?

[hitesh2710]

@fundoo

HBL has traded heavy volumes on Friday and today and price moved from sub 100 to above 110. Today was a gap up day with Friday’s high being 109.50 and today’s low being 110.15. Stock price took rejection from levels of around 118 which in near term would be a key resistance to cross.

For stocks in a tight range for a long period of time, (HBL spent nearly 20 weeks between broad levels of 90-105, with ocassional dips and rallies above and below these levels, but weekly close remained within this range) breakouts can also be followed by some selling pressure because of people stuck at higher levels wanting to get out.

Post the kind of rejection we have seen at around 118, there could be some retracement, or sideways consolidation, so that necessary launch pad is built for further upmoves. ( If stock is to go higher)

On longer term weekly line chart, attached chart shows a breakout above 75 levels and a high and double top at around 117-119 (from where today’s price action got rejected) and subsequent fall to touch lows of 87, then showing positive divergence in weekly charts and subsequently the recently strong rally.

Daily line chart shows a double bottom at 90 with intervening peak at 108 and the recent upmove shows a breakout of this double bottom pattern with pattern targets of 126. (difference of 108-90 = 18, added to breakout point of 108)… So in next few days the action to watch out for is how stock price behaves at around 108, or slightly below it (as usually retests often go below expected levels before bouncing again)

Following chart shows weekly line chart with breakout above 75 marked and the consolidation between 90-105 marked.

Following chart shows daily line chart with double bottom marked.

The key message here is that major breakout happened above 75 and subsequently it hit fresh all time high and then undergoing consolidation for a long period of time… False breakouts cannot be diagnosed by action of a single day… If we are in investor mode, then better follow weekly charts…

@TradingWithMind I don’t follow control print of tanla.
@giridesh3 I dont follow KMC speciality hosp or other hospital stocks…

[Riddhi_Shah]

Sir your views on FDC and Aarti Pharmalabs… FDC also recorded increased volumes with price upmove on Friday and Monday… Even Aarti Pharmalabs has revovered more than 25% from its recent lows…

[vishal_lehar]

@hitesh2710

The reason I personally don’t want to go heavy on pharma space is that there are a lot of tailwinds and opportunities in other sectors

@hitesh2710 How to find the sectors which are strong tailwinds and headwinds? for past few years market has been too cyclical and very short cycles with sector rotations happening? in such scenarios can’t get very clear tailwind sectors…

[ChaitanyaC]

@hitesh2710

Sir, what can be an ideal time frame for holding a stock bought as per momentum trading, which does not hit the stop loss, which does not also go high either, but consolidates either at the same price or a little higher for weeks, even for a few months, and the allocation to such a stock is not big and as such is not worth the longer wait, and there is another stock which can be bought by selling this stock?

I am aware of the scenario wherein a more promising stock is available and as such this stock can be sold without any further thought, but is there an ideal time frame, a rope so to speak, which can be given to a stock, any stock, if it does not hit the stop loss and consolidates?

Is a 5 month period fine, considering there will be a quarterly result in that period, so a movement either up or down can be expected?

Thank you.