I was the moderator who has objected to your totally hypothetical chart(only one chart not the whole thread). One of your reply was as below:
" Wait for next few weeks . How these hypothesis work out.
These are better than misguiding gullible guys by so called DCF assumptions and future projections.
One example-Look at IDFC First Bank thread…how many views and how much discussion…where we are today after years,
You have a narrow vision and don’t want to broaden it. There can be something beyond your understanding too. Be democratic, be open.
Note down all the projections- and let;s discuss the results after few months. That would be a fair way to judge, Rather than you living in a hypothetical and calling everything else as hypothetical that does not fit your world views. And calling every else assumptions as prctical assumption."
The words used by you were not only arrogant but personal too. I have been moderating this forum since more than a decade and I have tried to remain neutral. Since last 8-10 years I have stopped participating in any stock discussion just to set standard of neutrality.
I requrest you to remove links to your personal blogs as it is not allowed on this forum. You are requested to adhere to the rules of the forum & oblidge.
The main issue I have with this thread is its name - Stage “investing”. This is a momentum trading strategy and not even a very sophisticated one - using the 30 week ma + weekly volumes to buy and sell with some overlay of Elliott waves. This is NOT investing. Investing involves understanding the future prospects of the business and then owning a piece of the business in the long term. The author should post his analyses on the technical analysis thread.
The legends of this forum built it into a unique platform to share and discuss insights on business. Look at the major value creating stocks on this forum over the last 10 years and nowhere will you see so much focus on price charts/. Lets stay focused on that since that has created the maximum value.
IMHO such strategies only make you a lazy thinker Its much harder to dig up meaningful insights on a business than to track its moving average.
Every investor/trader is in the markets for one purpose, making money. When people like Joel Greenblatt have become great investors using a simple formula based investing approach, why can’t a simple 30 Week MA approach work as well? No one is always right in the markets and the right to be wrong, to choose, to read all possible views & approaches makes us all a better investor.
Communication protocol must be adhered to in such a group. That should not be compromised but let us welcome all such views and approaches flowing.
Agree with your larger point of view but don’t write off technical based investing as lazy thinking.It also requires lot of deep work and thinking. Combining EW , SI as well as Macros is an art and need years of work and experience.
Would request you to please go through the thread . At many places , macro views, intermarket divergences and many other global factors have been pointed out to make a view. So please be open to the ideas.
Anyways this thread is being closed. As we find that several people are not comfortable with technical based investing .They rather prefer buy-and-hold strategy and are not open to shift the paradigm and are averse to new ideas.
When tide goes up, even stones start floating but when the tide goes down even fish start suffocating.
I think only enrgy/power/oil stocks have their last leg of upside is balance rest are geting into their corrective phases ( and may be a small temporary jump in metal stocks)
But we’ve entered a bear market zone, for long term investing one should wait and stocks would be available at discounts.
Few days back, had written about Climax Moves on other thread (the link is here )
Climax moves generally happen in highly popular stocks in a bull run at the peak of euphoria. The price makes the top and then takes months or years to reach the same level ( and in many cases, it never comes to that level)
At these levels when retail investors gets sucked in and big hands move out. Effort is to learn from the past patterns and finetune entry/exit
If you see, we are close tp breakout of a key price-range after 10 years.
Also it seems that we’re starting the Vth and final wave the big wave that started from March 2020 lows. If we break current level , we might go near/beyond 150 /barrel.
Till that time oil related stocks may keep increasing.
Once this big wave 1 ( having 5 fractals) gets completed ,then we would get into wave 2 ( correction ). And then oil companies stocks may also start falling.
And that would be the final nail in the ending of the last 2 years bull -market.
How tracking macro factors can help one to pre- judge the market direction.
Here is one example.
Tracking of HYG .- High Yield Corporate Bond price chart.
Have a closer look, whenever we got Stage 4 signal in this chart , that was followed by correction in all global markets.
This chart signifies the transition of big money from high risk assets ( equity ,bitcoin ) to low-risk assets (bonds etc)
This time we got a clear signal in November 2021 -when we got a sell signal on HYG.
Keep in mind that macro factors don’t impact immediately , there’s always a time-lag.
It completed bigger wave 1 few months back and now is in wave 2 (ABC correction).
It has given a clear 5 waves fall in Wave A - now it might recover in wave B before falling further deep down in wave C.
The recovery can be be upto 38% or 50% of Fibo Levels (as shown in the chart. It depends upon the underlying market/sector strength. The extent of wave C (down levels) would also depend upon the recovery in Wave B.
In bear markets, these B wave moves can be used for short term trading ( to ride the temporary bounces ) or to exit your older postions in case you could not exit in Wave A.
It completed bigger wave 1 few months back and now is in wave 2 (ABC correction).
It has given a clear 5 waves fall in Wave A - now it might recover in wave B before falling further deep down in wave C.
The recovery can be be upto 38% or 50% of Fibo Levels (as shown in the chart. It depends upon the underlying market/sector strength. The extent of wave C (down levels) would also depend upon the recovery in Wave B.
In bear markets, these B wave moves can be used for short term trading ( to ride the temporary bounces ) or to exit your older postions in case you could not exit in Wave A.
Interesting charts & analysis . When you predict / forecasts the near future stock stage 4 using technicals , does business fudamental have any role to play there ? What if the fundamentals present a complete opposing picture such as newly added capacity utilsations increase earnings , a clear roadmap of business growth for 2-3 years & stock trading at low multiple of 15 - 18 after a 25 - 30 % corrections ?
Generally I focus only on good fundamental companies, the companies that have proved themselves over the years.
But my observation is that chart study becomes very helpful for entry and exits once you’ve decided the list of the companies which you want to keep in your portfolio.
Charts are made on the basis of volumes and actions taken by big money. Big money actions can only be caught through the charts .And you would agree that no stock moves in a big way ( either side ) without action of big money.
The only problem with studying fundamentals is that you tend to become biased while you look at the charts . It is diificult to exit a company ( the company you like )even if charts shout about it.But over the years, one tends to rise above these biases.
Agree on your point that that big money actions are the trigger point for further trend whether downward or upward . Does your argument imply that even the big money exit despite the clear evidence of near term strong fundamentals and available at fair price / multiple only because macros are not favourable currently ? And in case they do , what will trigger them to come back for the same stock ? Is it again favourable macro or the business fundamentals and avaialbaility at cheap price ?
I am relatively a mid 30s newbie in direct equity since last 1 year and therefore trying to understand the psychology part here .
For example:
a) Have better options available at cheaper prices
b) In case of DIIs or FIIs ,if they start getting pressure due to withdrawl of money.So many a times ,fund manager does not have a free hand.
c) Then there are regulations. For example, in India , a mutual fund manager can’t have a more than a certain% exposure in a certains stock. So they have to sell their pre-owned stocks if the price keeps going up so as to maintain the % ge ratio. In this way they end up selling their winners too early.
d) Big money has better access to bigger picture, they employ lot of analysts ,they have more information.If they happen to get overlall a negative/positive view for a certain period of time, I think they would take an action without looking at short term benefits/losses.
So apart from the business fundamentals triggers , it is regulatory & investment constraints and most important the Herd mentality decides the future course of actions for big money. No place for contrarian view despite the strong near term fundamentals because this might hurt your internal targets in uncertain times like currently.
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