List of stocks from trendlyne by relative strength is system driven…But once list is made, after that manually we have to apply stage analysis.
Earlier my buying and selling rules were arbitrary and I used to enter just by looking at Stage 2…But during bull market you will find , may be 200-300 stocks out of nifty 500 in stage 2 and obviously , you cant invest in 200 stocks, So we have to screen them to bring that number down to 15-20 maximum. For that what I have started doing is , since I have decided to sell the stocks whenever it breaches 30 week EMA, that same logic I will apply while entering…in the sense, I will try to enter as near possible as 30 week EMA. If you recall, in stage investing,one rule was, entry should not be late. So if current price is lets say at 25% above its 30 week EMA and suppose I enter at current price, then I will be selling that only when it breaches 30 week EMA, means 25% below my purchase price…That would destroy my capital by 25%…Hence better to invest when current price is closer to 30 week EMA, may be within 5-10% . so maximum loss I would be incurring is 10% when 30 week EMA gets breached. But also there are some exceptions. Some good stocks always maintain 20-25% Gap with its 30 week EMA even during short term consolidation…In that case you can keep the entry flexible…
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