What if you get a secret to identify stocks which will multiply your money ? Sounds familiar ?
No, i'm not selling you above scheme.But have you thought what is the common trait in all the stocks that become multibagger (5x, 10x, 50x, etc.).
Here comes the secret which will make you tonnes of money if followed diligently.
Are you ready ?
Buy stocks which exhibit below characteristics:
1. Stock price has broken out to an all time high
2. Stock price has cleared a multi year resistance
3. Above companies has been posting good results
4. During a market correction these stocks fall the least and bounce back fastest during the following up swing
Follow these 4 principles diligently and there is a good chance that you will make tonnes of money.
Don't believe me ? Here are few of the stocks which exhibit above characteristics (obviously there is lot of hindsight bias involved here, but the goal is to find patterns which work)
1. Apollo Tricoat
As can been seen in above chart, Apollo Tricoat posted excellent results in Q2 and Q3 FY20 and the stock price followed and hit all time highs. Will the rally continue ? Yes, there are chances of consolidation but backed by excellent results, the stock should continue to gain
2. Inox Leisure
Inox is a poor cousin of PVR and market has got in a confirmation on its execution capabilities. Stock broke above 290 levels and retested it and then boom. Another all time high backed by good results
3. Abbott India
Similar to Apollo Tricoat, market has rewarded it with excellent rally followed by good earnings.
4. Reliance Industries
This is a company which everyone would know. Stock was range bound for 8 years. When it broke this range, over next 3 years stock gave 3x returns. And this is for a large company where you can invest sizeable chunk of your portfolio.
Now the obvious question is that these stocks have gone up so much and the analysis done involves lots of hind sight. Which stocks are exhibiting similar trend ? My answer will be above 4 stocks are still poised for good gains due to the growth they are showcasing & the price action they are exhibiting. But lets also look at few others which are poised in similar fashion.
1. Bharti Airtel
Doesn't the chart look familiar ? Well it looks to be another Reliance type pattern. Will Vodafone go belly up so that Airtel benefits ? More important than this is the fact that cost of mobile plans are increasing and average revenue per user (ARPU) will go 2x over next 2 years. Why ? Because largest player Jio has lots of debt and it has almost killed all the competition and it's a duoploy now. Stock is also breaking out of a range of 10 years like Reliance did in 2016. This trigger along with improving fundamentals should help one make money
2. Credit access Grameen
This stock has appreciated 2x over last 1 year. Still I've included it here ? Why ? It recently acquired a company (Madura Microfinance), and has also done excellent branch expansion. It has broken to All time high, expect good upside over next 1 year backed by good results.
3. NAM India (erstwhile Reliance AMC)
Another stock which has hit All Time High and is just breaking out of a consolidation. This coupled by change in management should help it give good returns
4. IndiaMart
Look at the similar pattern where stock hits a level, consolidates, breaks it on upside and then moves into another orbit.
5. Granules India
By now you know the pattern right ? Its another breakout out of a 5 year range
Now go back to the start where i've listed the 4 principles to follow and have a re-look at the charts. All these have common traits. Now armed with the secret go and explore & post more stocks after studying.
P.S:
Before buying these kind of stocks, a very important factor to look at is companies which are rallying without stocks posting good results. Why is that so ? It may be a potential time bomb. The market may be factoring upcoming good results but what if the results don't come by ?
Also it's important to ride these stocks with strict stop loss of 20% or so. There will be numerous opportunities that will come by in a rising market but the losses which you suffer holding onto losing bets will restrict your ability to ride these breakouts.
No, i'm not selling you above scheme.But have you thought what is the common trait in all the stocks that become multibagger (5x, 10x, 50x, etc.).
Here comes the secret which will make you tonnes of money if followed diligently.
Are you ready ?
Buy stocks which exhibit below characteristics:
1. Stock price has broken out to an all time high
2. Stock price has cleared a multi year resistance
3. Above companies has been posting good results
4. During a market correction these stocks fall the least and bounce back fastest during the following up swing
Follow these 4 principles diligently and there is a good chance that you will make tonnes of money.
Don't believe me ? Here are few of the stocks which exhibit above characteristics (obviously there is lot of hindsight bias involved here, but the goal is to find patterns which work)
1. Apollo Tricoat
As can been seen in above chart, Apollo Tricoat posted excellent results in Q2 and Q3 FY20 and the stock price followed and hit all time highs. Will the rally continue ? Yes, there are chances of consolidation but backed by excellent results, the stock should continue to gain
2. Inox Leisure
Inox is a poor cousin of PVR and market has got in a confirmation on its execution capabilities. Stock broke above 290 levels and retested it and then boom. Another all time high backed by good results
3. Abbott India
Similar to Apollo Tricoat, market has rewarded it with excellent rally followed by good earnings.
4. Reliance Industries
This is a company which everyone would know. Stock was range bound for 8 years. When it broke this range, over next 3 years stock gave 3x returns. And this is for a large company where you can invest sizeable chunk of your portfolio.
Now the obvious question is that these stocks have gone up so much and the analysis done involves lots of hind sight. Which stocks are exhibiting similar trend ? My answer will be above 4 stocks are still poised for good gains due to the growth they are showcasing & the price action they are exhibiting. But lets also look at few others which are poised in similar fashion.
1. Bharti Airtel
Doesn't the chart look familiar ? Well it looks to be another Reliance type pattern. Will Vodafone go belly up so that Airtel benefits ? More important than this is the fact that cost of mobile plans are increasing and average revenue per user (ARPU) will go 2x over next 2 years. Why ? Because largest player Jio has lots of debt and it has almost killed all the competition and it's a duoploy now. Stock is also breaking out of a range of 10 years like Reliance did in 2016. This trigger along with improving fundamentals should help one make money
2. Credit access Grameen
This stock has appreciated 2x over last 1 year. Still I've included it here ? Why ? It recently acquired a company (Madura Microfinance), and has also done excellent branch expansion. It has broken to All time high, expect good upside over next 1 year backed by good results.
3. NAM India (erstwhile Reliance AMC)
Another stock which has hit All Time High and is just breaking out of a consolidation. This coupled by change in management should help it give good returns
4. IndiaMart
Look at the similar pattern where stock hits a level, consolidates, breaks it on upside and then moves into another orbit.
5. Granules India
By now you know the pattern right ? Its another breakout out of a 5 year range
Now go back to the start where i've listed the 4 principles to follow and have a re-look at the charts. All these have common traits. Now armed with the secret go and explore & post more stocks after studying.
P.S:
Before buying these kind of stocks, a very important factor to look at is companies which are rallying without stocks posting good results. Why is that so ? It may be a potential time bomb. The market may be factoring upcoming good results but what if the results don't come by ?
Also it's important to ride these stocks with strict stop loss of 20% or so. There will be numerous opportunities that will come by in a rising market but the losses which you suffer holding onto losing bets will restrict your ability to ride these breakouts.
Disclosure: I am not a SEBI registered advisor. The content in this blog are academic in nature, please consult your investment advisor before taking any investment decision; I may have position in stocks discussed on the blog
Exlent post !I am very interesting to read your blog content.Thanks for sharing.you may also check our blog
ReplyDeleteCreditAccess Grameen shares
Madura Micro