Nifty has continued to move in lackluster fashion post elections and is yet to show momentum on either side. At such times we generally witness stock specific action and it’s really important to find stocks that have been outperforming irrespective of index’s movement.
Since the beginning of the July month Nifty showed subdued movement so stock selection was not easy. Always remember when trading portfolio of stocks only a few will outperform and rest will either give minor negative or minor positive returns. These few stocks that outperform will make all the difference in trading.
It feels great to win the Trade show despite of the slow momentum witnessed. Below are a few trades taken during the week with clear explanation
1st July 2019 trades: Stock tips – Buy: Apollohosp, ICICIPru; Short: Arvind , NCC
Nifty closed with bearish bar in its last session and since stock specific action was witnessed, the key was to find stocks that were outperforming for buy or weak stocks for sell. All the chosen stocks were about to give a break of the range and the stocks in buy were undaunted despite Nifty closing negative. Individual stocks Elliott wave pattern was considered along with advanced concepts of technical analysis applied.
2nd July 2019 trades- Buy: Godrej Properties, Torrent Power, Union Bank; Short: MGL
On 1st July Nifty witnessed buying and managed to close in the green, hinting towards some buying emerging in the market. Since the momentum in the index was not very strong, the key was to look for sectors that closed strongly positive and outperforming stocks within them. Real Estate and PSU banks showed strong positive close and hence Godrej Properties and Union Bank were selected with power sector showing impulse 3rd rise and so Torrent power was considered while MGL from the energy sector was weak and was recommended for short.
3rd July 2019 trades – Buy: IBULLHSGFIN, RBL, SBI Life, Varun Beverages Ltd
On 2nd July Nifty witnessed buying and closed above its prior bar’s high and the market breadth showed buying emerging. Killer move was seen in IBULL Housing Finance which was up by more than 8% on the same day. This clearly resulted into strong outperformance of the overall portfolio. IBULL showed faster retracement above the last falling segment thereby confirming strong positive reversal as per Neo wave analysis.
4th July 2019 trades – Buy: Ibull venture, Federal Bank, REC; short: IGL
As the entire pack of Indiabulls was outperforming, Ibull venture formed double bottom with strong positive divergence on RSI. Also it was probably completing wave c on the downside and 2 days of up move was expected in form of wave x. The stock behaved exactly as expected and showed sharp rise of more than 6% on the same day. The other stocks also supported the portfolio resulting into strong overall gain.
The above strategy clearly highlights the fact that despite Nifty trading with low volatility, it is extremely important to look at individual stocks along with Nifty direction. It is not necessary that you will make money by simply being long on any stocks in the current market. Stock selection based on Channels, Elliott Wave, Neo wave, Time cycles, RSI indicator and much more is required.
I will be discussing all of the methods of stock selection and trading strategy in the upcoming seminar on Master of Technical analysis scheduled on 20th – 21st July and most advanced technical analysis methods of Neo wave, Hurst’s Time cycles and Ichimoku Cloud on 3rd and 4th August 2019. For more details register here
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