Whenever you find a sector in favour, you will find froth. Initial phase of the rally is with disbelief, then it progresses with acceptance, and then comes frothy narratives. Order book investing is a kind of frothy situation. But this kind of stuff can also keep going on for months, before shit hits the fan.
Riding momentum is a specialised skill. It’s not everyone’s cup of tea. While riding momentum, many a times there will be extreme discomfort while justifying valuations. (Does not mean we have to ignore fundamental picture altogether). But we should know that these kind of rallies tend to last much longer than what most people expect.
What I do is plan staggered exits once I see parabolic moves start happening. ( with sector in fancy, usually there are parabolic breath taking climatic moves… e.g mazgaon dock … )
After that even if stock price trends to go higher than my sell price, I don’t regret my decisions, because we cannot sell at the absolute top.
Above is the kind of framework I use while riding momentum stocks and sectors.
Railways, defence seem to be the sectors in fancy as of now. And some of the stocks are in the parabolic upmove phase. One needs to exercise caution while making a fresh entry.
For KVB details, you can look up chart posted in Bull therapy thread. The chart is posted with details.
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