Nothing happens overnight. Trends take their own sweet time to develop and as they develop, they offer multiple opportunities along the way to participate in the market.
One trend that was obvious for quite a long time and is Work in Progress: Retail Financial market Participation
I have been tweeting this trend for a long time but when it comes to investing, you have to pay attention to it only when the market recognizes it. It did back in Sep 2020, and I wrote this blog with CDSL as my top recommendation
CDSL stock by September had already rallied to 400 but a breakout to a new high is usually the starting point of new momentum. The stock did not disappoint and I am glad I recommended the stock at 440 and now it’s trading at 1400 in less than a year.
https://stateofthemarket.s3.ap-southeast-1.amazonaws.com/2021/Indianstockmarket/July/DMP/CDSL1.png
What do we learn from this price action? Never underestimate the trend and pay attention to the story.
Also, never get disappointed because there is always another opportunity waiting for you.
BSE was the next big opportunity. People who have been following me on smarketpremium.com can understand how aggressively I recommended BSE at multiple price points from 200 dma and breakout.
This was my note on BSE when it was at 700
Now let’s say you missed BSE too…there was another opportunity of CAMS.
CAMS is India’s largest Mutual Fund Transfer Agency that provides MF Services & Statements. Service partner to AIFs, Insurance Companies, Banks & NBFCs
I recommended CAMS at 1300 on 01 Nov 2020
I have not even talked about IEX, MCX, etc opportunities which I also covered.
Lots of you ask what does reading price action means. This is exactly what it means…read price action, understand the idea/story the market is falling in love with, and then chase every idea that belongs to that theme. What’s amazing…the market keeps exploring ideas that are connected to the big picture theme and hence new opportunities keep popping up.
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