For companies with strong business momentum, the time to buy usually is during sideways consolidation. e.g We saw a correction in Xpro India from levels of 1100 in March 22 to 650 kind of levels in May-June 22. Now it seems to be trying to gather some strength and has been in a tight range of 720-820 since past nearly 3 weeks. These are the types of consolidation one looks for accumulation if story is convincing enough.
Coming to Vadilal Inds, it has continued to be in a strong bull run and at some point of time go into sideways range which is when one can think about buying.
Or else one can use an appropriate moving average to add the stockā¦ Or a percentage fall from recent swing high. Usually strong trend stocks will not correct more than 20% from swing highs. (this is not a rule cast in stone, but an observation. )
Just to add to the examples, I can quote example of Flurochem. It too has had a phenomenal run up and results have continued to support stock price. There too if you see, level of around 3200 was a sort of strong resistance which got taken out and stock price went up above 3600 and then corrected. It is now stuck in a range of around 3330-3450. I prefer these kind of corrections to add to my positions on the way up.
Pyramiding a stock on the way up is also a special skill set and one can learn with experience and experimentation. All strong upmoves in stock prices are punctuated by brief or long pauses which is where we should look out to add. But it requires a high level of conviction and patience to do this type of stuff.
Subscribe To Our Free Newsletter |