NIIT stock has rallied 66% since first week of September 2020. This rally came on back of 100% move the stock had already made from March 23 lows to an all-time high. NIIT success once again reiterates the power of price action and why one should pay attention to a stock when it makes an all-time high.
NIIT Price Action Case Study
I pay close attention to a stock that makes a new high and has a sectoral theme/fundamental bullish newsflow behind it. NIIT offered such an opportunity during the first week of Sep 2020. Here’s the image of what I recommended back then.
Let us see what NIIT stock has done since then: NIIT stock has rallied from 120 to 200 levels
Source: Chartalert.com
It has been a picture-perfect breakout move and NIIT since then has rallied 65%+. It seems more momentum is in the offing. This example proves once again that the Breakout to new high is the starting point of a new trend. Buying a breakout stock is like planting a small plant and then watching it grow like crazy over the next 6-9 months.
Fundamentals don’t drive stock prices.
How people perceive those fundamentals drive stock prices.
As a market participant/trader, keep an eye on how the market views the fundamentals than being obsessed with your own version of fundamentals. It means look at the price action and it tells you without bias what the market thinks about the stock. Once you read the price action, go and find the reason why the market has such a view on the stock, and be aligned with it.
This is the level one mind training every individual requires to be in sync with market thinking. This is the real fundamental of Investing. I call it Science of Stock Price Action
If price action fascinates you – then Science of Stock Price Action is a great place to start.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purposes. 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