Nifty dynamic move from 18^th Sep to 22^nd Sep: Though the markets saw a fall of almost 160pts on Friday 22^nd Sep we ended on the winning side on the CNBC Trade show. How? Let us have look on what were the strategies followed to maintain our consistency to manage positive returns on the amount of Rs. 400000

The most important thing that I personally follow is to understand the direction of major index before stock selection on each day. This helped me to gauge out of 4 stocks to pick daily, how many we need to have on the buy or sell side.

Notional amount of 400,000 was given that has to be spread across 4 different stocks on daily basis.

18^th September trades: During the week Nifty had been constantly struggling to cross above the important resistance level of 10135- 10155. We mentioned the importance of these levels even in our daily Equity research reports. Nifty was consolidating in a range between 10050 and 100130. A breakout above 10155 was needed to see a further uptrend. The sectors that we were focusing on were Housing Finance, Auto, Gas Distribution on the Buy side as these were the sectors that were out performing and could have managed to achieve the specified target. Stock tips – Buy DHFL, IGL, TVS Motors, Sell Apollo Hospitals.

19^th September trades:  Nifty had a positive closing in previous session and thus we maintained our strategy to keep 3 stocks in buy and one on sell side to hedge the entire portfolio. On second day once again I selected LT Finance which showed outperformance along with PFC and Biocon which were exhibiting short term breakout.  Within the same sectors also there can be some laggards and hence based on the same Repco Home finance was given on short side.

20^th September trades: Based on the sideways action at higher levels in Nifty, we try to find out the strong momentum in select stocks. On the basis of the same Bharat Forge, STAR and Tata Chemical were preferred to give on buy side. On sell side LIC Hosing finance was given due to its weak structure.

21^st September trades:  Although the market were struggling to maintain the upside trend, on observing the rally given by the Pharmaceuticals sector for 2 consecutive days we decided to focus more on Pharma stocks as they had been gaining momentum. We also included Bharat Finance as one of our picks on the buy side since the stock was outperforming and had made  a Flag pattern on the charts to see a breakout on upside trying to takeout its 52week high. To overcome any kind of disruption in the market trend we again preferred to have one stock on the selling side. Stock tips – Buy Dr. Reddy, Torrent Pharma, Bharat Financial Inclusion, Sell LIC Housing Finance.

22^nd September trades:  Stock tips – Buy Ajanta Pharma, Biocon, Bharat Financial Inclusion, Sell Repco Home Finance. Since Pharma as a sector was outperforming we remained bullish and gave a buy call on Pharma stocks while being bearish on Repco Home finance being the underperformer. Even though the markets witnessed a sharp fall, we managed to restrict our losses for that day as our focussed remain on the Pharma space.

Overall, I managed to go long on Pharma on most of the occasions and short the underperformer on each day to hedge the portfolio to some extent that helped me close positive for the entire week when the other contestant closed in red 🙂

The above strategy clearly highlights the fact that knowing the direction of major index is extremely important even when individual stocks have their own technical picture. These stocks lose their identity if the major undercurrent or index tone is strongly trending in one direction.

Evaluating individual stock technical charts are also important but identifying the number of stocks to be on the buy or sell side on each day based on overall market tone was the key to trading success during the week.

For reference anyone wants to read about strategies followed 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

Another Bull’s eye trading strategy followed in September 2016 – Trading strategy to win September 2016

Bull’s eye trading strategy followed in September 2016 – Trading Strategy to win February 2017

The above is just to share across my personal experience during these shows.

Post the break of 10040 on Nifty we have been bearish all the while and the same has been mentioned in our daily equity research report – The Financial Waves short term update