Trading Strategies I followed to win CNBC TV18 Bull’s Eye stock trading show!

Techniques followed during the week for stock selection and trading strategy adopted that helped to win the stock trading show Bull’s Eye on CNBC TV18

It is exciting to participate in the stock trading game show but at the same time it is important to live upto the expectations of millions by not betting on lower probable trades. It is important to follow prudent risk and money management strategies. Market dynamics this time were different than that before in May 2016 when I won ET Now show with substantial margin.

For reference anyone wants to read about strategies followed then in May 2016 can refer the following link: Rules followed during ET Now game show where I won with substantial margin can be found in this link – Rules followed to win ET Now show by Huge margin

Following are a few strategies I followed for Bull’s Eye show on CNBC TV18. Notional amount of 400,000 was given that has to be spread across 4 different stocks on daily basis.

• Identifying overall market direction is most important as majority of stocks behave in close correlation to index even though magnitude of rise or fall might be different

•  It was challenging to catch hold of momentum stocks during the week of 12^th September 2016 to 16^th September 2016 as the main index Nifty was in absolute sideways direction after a sharp decline on 12^th September.

• During such scenarios it is better to bet on the outperforming stocks for going long and shorting the ones that hardly showed any pullback

• Key differentiator was managing to consistently perform rather than betting everything in one direction when the trend was not clear

• Techniques like Neo wave, Time Cycle analysis on very smaller degree helped me to gauge the market direction on last day of the week i.e. 16^th September when I was expecting a correction after a brief run up whereas other participants maintained all buy calls, I was short on 3 stocks and long on only 1 stock – Cox & Kings that has tendency to move independent to the main index

• During final hour of the trade there was sharp selloff on majority of stocks and at the same time Cox & Kings recovered sharply into positive.

Definitely there is element of lady luck that also worked in favor and after the tough competition, I managed to outperform and was declared as a winner.

You might not find specific techniques which I followed during the day but various tools that I believe and practice rigorously is Elliott wave, Neo wave, Time cycles, Channels and identifying the direction of main index for the day is crucial to understand if it is better to be tilted more towards long side or shorts.

Techniques were more or less similar to that followed during May 2016 – ET Now game show. Please refer this link – Trading Rules to follow

In a nutshell, it feels good to win another stock trading game show when millions are watching but trust me the pressure is equally high…Actual trading is no different and a clearly defined strategy should be in place before you place your bets! Happy Trading…:-) For more details visit Contact US

How to pick Momentum Stocks – Bajaj Finance or Reliance Capital?

Trading or Investment success depends a lot on Stock selection and Timing. In case of Investment timing can be off to some extent but in case of trading timing is again a very important element.

Now let us try to see a very simply method to select a stock either for Momentum trading or for Investment purpose. A few might not agree with the below methods if they are contrarian traders or value investors. But that is what results into market movement after all!

The below technique shows two well known companies – Bajaj Finance among the news post it touched 10000 mark giving exorbitant returns in just few years and the other one is Reliance Capital stuck in medium term downtrend post the top made in 2014.

We can clearly see inverse movement in terms of trend in both of these stocks and for a momentum player one should trade in direction of all the trends – short, medium and long term. Bajaj Finance has continued to be a strong outperformer and this stock rose by nearly 10% even after so many months of already up move.

Look at the charts carefully and let us continue our discussion:

Bajaj Finance and Reliance Capital line chart:

The blue line chart representing Bajaj Finance clearly highlights increase in momentum with each passing day. The valuation might not be justified that many fundamentalist might argue but the least line of resistance is on upside and any dips should be utilized as buying opportunity unless and until we see a clear reversal sign or formation of lower highs and lower lows.

I would rather avoid buying an underperforming stock like Reliance Capital both for trading or investment because the fastest way to see increase is share value is with the one which has least resistance on upside. In Reliance Capital each rise will be stopped even though temporarily by the supply from investors who are stuck in the stock for many months or years. This will result into intermittent pause or reversal on downside whereas if a stock is trading at new highs it is everyone’s guess how far and how fast it can go! Trust me catching a top in such outperforming stock is not possible and if someone claims to know he is probably just a novice.

Case in point: In stock market one should never try to think that the stock has already doubled so how far it can go… Bajaj Finance is a classical example that shows rise of more than 10 times in just few years and inversely one should avoid catching a low in falling stock by guessing how much more it can fall else you can be stuck in stocks like HDIL, Suzlon, Reliance Capital and many more that are still trading way below its top made in 2008, rest alone the opportunity loss for these 8 years!

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