Used this time in learning technicals as in the past I was purely investing based on fundamentals.
Starting this thread to share my newly created momentum portfolio last Friday-all are fundamentally proven companies (most of these are also part of my core portfolio but wanna play shart term too - ie. trading in fundamentally strong companies on the basis of technical analysis) - would keep changing as per the market and stocks technicals -situation -mostly on weekly basis - would keep the portfolio of 15 stocks only - would keep exiting /entring new ones based on technical -convictions
Here are my few picks for the coming weeks
Heranba -819
ABB -1852
Fairchem Organics -1890
HDFC lIfe - 702
Kopran - 205
IEX -435
ACE - 216
Jubilant Ingrevia -715
CanFin Homes-523
Torrent Power -487
Dalmia Bharat Ltd -2025
HIL Ltd -5521
Infoedge - 5895
Ion Exchange -2245
Hester Bio -2313
I put equal % ge in each
The intention to have only strong fundamental companies in the momentum portfolio is to avoid the risk of a black-swan event ( when technicals fail) . If one has strong companies in the portfolio, then he does not need to exit in some overnight market crash.
Look forward to suggestions on how to track or how to improve the performance.
I do have IEX and HDFC Life for same reason. Good set of stocks. Most of them doing good and are fundamentally sound companies to hold for LT in case market goes otherwise.
You might like to look at the raw material, I think nitric acid, its spiked more than 50%
They might be able to pass some of the cost but there will be a quarter backlogâŚnext qtr might not do well
I donât pick my momentum or fundamental picks on basis of quarter-on-quarter results. Momentum picks are chosen based on technical analysis, and fundamental picks come to my portfolio on the basis of long-term opportunities, the companyâs track record plus valuation levels.
Adding a weekly tracking sheet to see how this strategy works.
As mentioned earlier, allotted equal amount to 15 picks. This one is a notional representation of this portfolio - e.g. 10 lacs divided equally.
Why to do it in public ?
2 reasons
i) If you commit a goal publicly, youâre more conscious of your actions and you tend to avoid impulsive mistakes ( that you do when no-one is watching.)
ii) It may help in collective learning experience.
My 2 cents. I do my long term investments when there is blood on the streets ( 2008, 2020) Otherwise , valuation or some triggers attractive on forward looking basis. I generally avoid newly listed stocks as there is no price discovery yet
Even I have the same question- what indicators are you using; RSI, MACD, Bollinger bands, moving averages etc.?
Also, do you have a screener for this, and if so, could you please share the filters and/or the link?
And one humble request, so that beginners like me can learn better: can we please have a chart with the relevant indicators along with the stocks, instead of only names?
Techno-Fundamental Investing is the best strategy. Due to paucity of time, I usually use filtered stocks from brokers (fundamentally filtered) or from good sources of friends on WA or Investment Groups like VP, and then completely do my own TA in many angles (MACD, RSI, MF, TL, Fibs and EMAs) to decide âwhenâ to buy and also (more importantly) âwhen to sellâ.
Many times, I will jump off after âmy stomach is fullâ esp. when the move is 50% to 200% in too short a period of time (in bull markets), or when the performance is lackluster for 3months to 1 year and it has not panned out.
Good fundamentals =/= Good company to invest in
Bad fundamentals =/= Bad investment and then avoid
A perfect example was when I got into DLF, IndiaBulls, Ashiana etc when no one wanted to get into that sector (RE) in Oct to Dec, but the TA was proving that there is early buying, and from a macro standpoint, it was clear that US RE was taking off after Covid-vaccinations, and hence a similar trend would follow. So, sometimes, bad fundamentals but early entry into sectors also required.
Your picks are good and also you have to figure out what your Selling Criteria is going to be. I have not perfected that, similar to 99.9% of the TAs out there, particularly in the bull phase of 2020 and 2021, or even 2009-2013, when stocks just kept going and going and going.
II use my own proprietary system to identify TechnoFunda picks. This is tested since 2016 and performance is good. My latest pick on using this concept is Natco at 894. Now I am focusing on OCCL.
Thank you for sharing the two latest picks from your filtered strategy. I will look them up since I am still about 11% cash position and deploying it very slowly, although getting out of trading positions knowing that we are a âneedleâ away from a consolidation (not correction) due to the overbought condition. Earning are done, Rakhabandhan is done, Diwali not here, Sep and Oct are here (worst months), and also US has no other great new left in the kitty to share ($2.4/$3.5T already built into the bull scenario). It is NOT gloom that I am predicting here since we are coming out of a good PE lowering situations with betterment in earnings happening at the Nifty50 stocks category. Yet we have some lurking Wave2 and 3.
Getting into good techno-fundamental stocks is just the best overall LT strategy and also fits the ST model of Swing Trading.
Hii! Thank you for sharing your strategy. I like the part that you want to be confined only to stronger names which I believe is great. If you go and try to check the momentum strategy followed by some of the worldâs leading AMCs such as AQR Capital, you will see it is pretty simple and can be automated easily. They only invest stocks that give the highest return in a particular period e.g. 3months, 6months, etc, and churn the portfolio based on return every 3 or 6 months respectively. The underline assumption is that the best-performing stocks of the near past will continue to do well. I personally stay away from Technical indicators as I believe it increases the confusion to the system. All the best!
Realized that a week can be too short a period for technicals to work, hence fortnightly may make better sense (unless & until there are few changes to be made in-between).
As of now, it is 7% up.
Current plan is make few changes on coming Monday
Heranba can move out (though it is a good stock to hold in core portfolio its chart history is too small to make any judgement as per technicals-study ) -might change to UPL âŚstill to take a call.
Thinking of moving to Tata Power, instead of Torrent Power - though both have a close race
Would update here on Monday evening if there are any changes. Would study more on weekend to find good replacements or there might be no replacement.
And I donât use screeners - I have a list of about 200 investment worthy names - have put alerts on them for certain signals based on my own technical analysis parameters.
Please read the thread carefully. I only pick -up those companies in the momentum portfolio that I can keep in my portfolio for the long term when some black-swan event happens. For that, the company has to be very historically proven and should be proven on fundamentals.
Technicals tell when to buy/exit and fundamentals tell what to buy. This portfolio is momentum portfolio of fundamentally strong companies for swing trading (2-3 months position ) based on technical studies)
I donât consider Neuland as a strong fundamental company. It is an emerging company but yet to prove itself. Valuations have run ahead of time.
