Thread by @shreevarad

𝗧𝗲𝗰𝗵𝗻𝗼- 𝗙𝘂𝗻𝗱𝗮 𝗮𝗽𝗽𝗿𝗼𝗮𝗰𝗵 𝗳𝗼𝗿 𝗜𝗻𝘃𝗲𝘀𝘁𝗶𝗻𝗴 𝗧𝗿𝗮𝗱𝗶𝗻𝗴

________𝙈𝙀𝙂𝘼- 𝙏𝙃𝙍𝙀𝘼𝘿_______

**Strategy of precision / Drivers for stock
1. 𝗧𝗿𝗲𝗻𝗱: Most important factor one should consider abt charting. super -performer
stocks are either belong to large cap or emerging large cap stock having MOAT or
strong market share of products or operating margins or sales

2. 𝐅𝐮𝐧𝐝𝐚𝐦𝐞𝐧𝐭𝐚𝐥 : will describe events in short which sets new direction for stock
1. Earnings
2. Revenues
3. margins
4.. sales

3. 𝗖𝗮𝘁𝗮𝗹𝘆𝘀𝘁 : that triggers can triggers the move
i. CEO/CFO Appointment
Ii. New management
Iii. promotor releasing Pledged shares

Iv. turnaround story
v. . Govt./ International Policy e.g. metals , ores , mines

Entry points : i. Opportunities either on swings and chart structures
Ii. maintaining Low risk entry points while entering

Exit point: based on either technical / fundamental reason in whichever
manner understood by trader

𝗦𝗶𝗺𝗶𝗹𝗮𝗿𝗶𝘁𝗶𝗲𝘀 𝗶𝗻 𝗦𝘁𝗿𝗼𝗻𝗴 𝘀𝘁𝗼𝗰𝗸𝘀
I. Rapid price actions
II. Volume always follow the price
III. When you buy be it in profit immediately for strong charts

IV. Every winning stock show almost similar character with momentum , structure &
profitability. They are early performers in bear market

**Value investing & momentum investing are two different scenarios. Don't mix it up

𝗧𝗵𝗿𝗲𝗮𝘁𝘀 𝗳𝗼𝗿 𝗮 𝘁𝗿𝗮𝗱𝗲𝗿 / 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝘄𝗵𝗼 𝗶𝘀 𝗻𝗲𝘄 𝘁𝗼 𝗺𝗮𝗿𝗸𝗲𝘁:
//Although strategy is important
• Knowledge
• Discipline
• Adhere to rules
Are the most important aspects of trading .
//Each trader should know strengths & weakness of his own

𝐂𝐨𝐧𝐜𝐞𝐩𝐭 𝐨𝐟 𝐏𝐄:
*Everyday army of Traders will talk about P/E which will be always overused &
misunderstood
*Standard PE ratio reflects historical results . Doesnt take into account w.r.t price
appreciations in future

1. . Lets say if a stock xyz Trading at 70 P/E , if by any reasons analysts or estimates failed
to meet expectations of stock , brokerage house / financial news will lower the ratings for the
stock for next quarters . hence PE will disturbed by them for future use

Price (P) will remain the same & (E) Earnings will go down . In that case P/E will become
expensive as compared to the previous one Or if Price remain undervalued for many quarters despite earnings , PE will be very much
misleading. Strong earning growth will make a value stock

. Its normal for Growth stock to fetch premium to market
4. Don't evaluate stock just based on PE alone .
5. Overvaluation & undervaluation is mislead by social media , analyst based on PE
6. Time earnings even if you got only a piece of advance , you could make a .....

truckload of profit by tracking a moat co with proper analysis.
Double digit profit + Double digit opm + Double digit EPS + MOAT
Or
Triple digit profit + Triple digit opm + Triple digit EPS + MOAT

Is MULTIBAGGER combo for SUPER-PERFORMER STOCK

8. Value does not move stock prices . value is part of the equation . ultimately you need
demand and institutional volumes to drive the stock .
There is one stock Indian Trading community trolling and trading near 200 levels :D .
Stock have value also trading at 18 PE

, price not justifying growth . think abt it why ?
𝐏𝐄 𝐫𝐚𝐭𝐢𝐨 𝐢𝐬 𝐛𝐚𝐫𝐨𝐦𝐞𝐭𝐞𝐫 𝐨𝐟 𝐬𝐞𝐧𝐭𝐢𝐦𝐞𝐧𝐭𝐬 . 𝐚𝐥𝐬𝐨 ...
Not 100% sure to guess direction of the stock for future projections
• Market should have willingness to justify the price & sentiments

• PE expansion = Growth phase
To judge valuation stock for overvaluation or undervaluation you need two parameters
PE & Growth
From that you can derive PEG ratio where PE is in numerator and Growth is in Denominator
PEG ratio = PE / Growth Rate

Lets assume stock trading at 20 times earnings and growing at 40% growth
PEG = 20/ 40 = 0.5
So basic assumption is
1. below 1 is under undervalued
2. Nearly 1 is fairly valued
3. Above 1 is highly expensive
PE expansion happens when stock attains momentum after spending weeks...

months or years in consolidation or non trending price zone to new price territory.

𝗣𝗘 𝗲𝘅𝗽𝗮𝗻𝘀𝗶𝗼𝗻:
1. If stock prices rises faster than company earnings ( or pushed by accumulators )
2. Lets say stock PE rose from 20 to 40 or 60 . already PE expansion happening at

faster speed which will unlock value for the stock in terms of momentum and volume
After 2x or 2.5 to 3x PE , stocks starts to show signs of decelarating growth and
everyone tries to board the train at that point . Trading is game of price and time . if any
stock grows in ...

parabolistic manner , enjoy until party lasts . because stock can go into
breather mode for weeks or months giving institutions every chance to exit with profits
Generally stocks have 4 stages
Stage 1 :
basic structure
Nothing noteworthy
Lackluster performance
AVOID STAGE 1

Stage 2 : Breakout / Rally on high volumes / pullbacks on low volumes
Stock starts trading above 200ema on daily and 40 ema on weekly.
Higher High HH and Higher Lows HL structure

𝗧𝗿𝗶𝗴𝗴𝗲𝗿𝘀 𝗰𝗼𝘂𝗹𝗱 𝗯𝗲
• change in CEO CFO or other higher managements

• Promoters releasing pledge
• Debt reduce by raising money
• Biggest earning surprice
• Turnaround story or Technology or signs of becoming a leader

stage 3: Distribution phase
• Poor results
• EPS dropping
• Increase in debtor days
• Selling pressure on small moves

• LL & LH structure for charts

stage 4: heavy declines and selloff .

SUMMARY :
Parabolistic moves blows off in sideways

Trust your eyes , not ears

Price will move first , news will follow

Follow the leaders

Most of big money is made in bull market in the first 18 months of initial stage

Leaders will run before everyone else in bear stage

Best stocks makes low first
#trading #thread #nse #nifty

suggestions are welcome @kach0289 @Abhishekkar_ @chartians @DillikiBilii @TerranceVeigas @imkhatate @Tushargoswami_ @Impranay21 @vish_bharti