Thread by @suru27

#HCG 🧵to provide key technical analysis insight & learning through one of popular stock HCG (valid for long term investors & traders)

Please note there are no GOD rules in technical analysis, but discipline makes a rule GOD for us when transactions go for a toss

Keep reading..

Let us focus on 2 things:
1. Why as an investor I start any chart reading with monthly chart for longer term direction

2. Why relative performance matters

1. Importance of monthly charts: peaceful investing without much churn in portfolio and daily tracking (this is one of the ways, not the only way or best way to take decisions).
a. Exit: If one would have simply plotted relative performance with respect to NIFTY, he would

have got out in early 2018 and avoided whole decline and underperformance for next 2 years

b. Entry: Further, in June 2020, would have taken entry based on outperformance to NIFTY and would have continued to outperform NIFTY

c. Average up: Whenever stocks relative performance came at par with NIFTY, it created a temporary bottom and next leg of run from there

2. Why relative performance matters:
NIFTY return itself has been respectable 12-14% over long term and if one can outperform this without much fuss and peace of mind with lesser churn, not a bad idea. Relative strength performance analysis helps to ideate the same

Currently, HCG has started underperforming NIFTY though not by a heavy margin but for last few months unless last few times when it rebounded quickly. No one will know the future but it is all about discipline of well tested rules which a protection cover to save from big falls

and ride big gains.
So, this was all about blending 2 concepts - relative strength and longer timeframes to simplify some of the concepts.

At Scientific Investing, we love to teach many such concepts and will be teaching in detail through our CMT level study sessions and much more in our practitioner membership. You can explore the same here.
learn.scientificinvesting.in/learn/SI-PRACT…

Also, we love to teach about rule building, quantification, back testing, building systems and algorithms picking such ideas in our QUANTS learning track. You can explore it here.
learn.scientificinvesting.in/learn/QUANTECH

Like and share if this was useful for wider reach🙏

Remember the key message - Its not about predicting a perfect buy or sell call or trying to predict HCG ka kya hoga. The key message is bigger and about patterns/rules/discipline and systems - focus there

Also, think more, conclude less - Killing all this analysis above - Why it looked so beautiful - because either the stock was in continuous uptrend or downtrend. The moment it goes no where for month doing criss cross, the rule may become pain in the ass which means it needs

more thoughts. Think about it. My goal is only to make you think and not talk about what will happen to HCG or what a great or crappy rule is this. There is nothing perfect but there are always better solutions n possibility for improvement