How can I Buy Low and Sell High
Majority of market participant and especially new comers in the market believe that success in financial market counts when you can buy at the bottom and sell at the top. You open business channels and that's what you hear...people predicting top and bottom every single day. People show off how they predicted bottom or top.
No analyst can tell you to sell at the top and buy at the bottom. The problem is not with the analyst the problem is with you if you believe
— Deepak Singh (@smarket) January 18, 2016
Trying to buy at the Bottom or Sell at the top is the most futile exercise to do. It's not worth it. Then the question comes: What's the right question to ask
Where is the trend developing? And Is there complete disbelief there? How is market positioned - overowned/underowned? Is there any fundamental reason?
Here's one Example: Real Estate
First - there was a trend on Chart...Some major names broke out...main one Godrej Properties
One sector in India where there has been pretty visible breakout in stocks with huge volumes: Real Estate
All Bad news priced in?
— Deepak Singh (@smarket) March 23, 2017
I covered Real estate Sector on April 23. Read the complete article here.
The move was backed by Fundamental Reasons:
1. SEBI first allowed MF to invest in REIT in January
2. IRDA allowed Insurance companies to invest in REIT in March
3. RBI allowing Banks to invest in April
This resulted in strong Trend and it required: Follow the trend
Once a trend is established - these stocks even after making a move, become a low risk buy...because the race is on to own the sector in momentum. Example: Godrej Properties post breakout is up 35% in a month and a half. This is just one example.
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers