Nifty has continued to trade with high volatility in either side. At such times it becomes wise to go long on the stocks which have been a consistent outperformers and short the underperformers.
It feels great to win the Trade show with big margin. Below are a few trades taken during the week with clear explanation
19th August 2019 trades – Buy: IGL, Pidilite, Short: Balkrishna Ind, SAIL
Nifty was moving in a broad range with no clear direction and so it was best to keep two stocks on buy and two stocks on short side, IGL formed the biggest positive bar in the preceding session indicating momentum building on the upside, Pidilite gave a decent breakout on upside, Balkrishna Ind formed lower highs lower lows and SAIL was in continued downtrend probably on the 3rd wave down and was on the verge of a breakout. Most of the stocks worked in favour and helped win the day!
20th August 2019 trades: Stock tips – Buy: DCB Bank, SBI Life; Short: Biocon, RCap
Nifty continued to trade in the red territory and closed below its prior bar’s low. DCB Bank gave a strong positive break out, SBI life bounced off from the channel support with buy signal as per bar technique and Elliott wave. Biocon closed its previous session with a biggest red bar and RCap was in an overall down trend with 3rd wave ongoing. The day was amazing with Relcap hitting the target of 8% on downside.
21st August 2019 trades- Buy: Berger; Short: L&TFH, Rel Infra, Yes Bank
Nifty witnessed strong selling indicating momentum building on the downside hence 1 Buy and 3 shorts were recommended. The stocks selected for shorts were from sectors replicating Nifty’s move i.e Nifty Fin service and Nifty Reality. On the other hand despite FMCG sector underperforming the paints stock were doing extremely well and hence Berger paint for buy was recommended as it was on the verge of breakout.
22nd August 2019 trades – Buy: NESTLE; Short: EnginersIndia, Hindpetro, JindalSteel
Nifty in the previous session continued to move lower with stocks entering into oversold state. So we continue to hold long on 1 stock and shorts on remaining 3 stocks. The stocks in shorts were depicting continuous weakness with probably the 3rd wave ongoing. On the other hand, Nestle gave a strong positive break out indicating positivity despite Nifty underperforming.
23rd August 2019 trades – Buy: DivisLab; Short: HindZinc, Sun TV, RelInfra
With Nifty showcasing strong negativity we recommended 3 shorts and 1 Buy but the index showed abrupt reversal on the upside. HindZinc, and Sun TV showed similar pattern in its fall. Rel Infra was extremely weak and was on the verge of a break down and achieved the target despite of index closing positive. Divislab on the other hand bottomed out even before Nifty marked its low near 10637 and it moved higher as expected.
The above strategy clearly highlights the fact that despite Nifty trading with high volatility, it is extremely important to look at individual stocks along with Nifty direction. Stock selection based on Channels, Elliott Wave, Neo wave, Time cycles, RSI indicator and much more is required.
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