bountyhunter21

CNX Metal - A brief Analysis based on Momentum & RS

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This is a brief analysis on the metal sector NSE:CNXMETAL and why one can consider a buy, where to buy, when to buy and how to buy.

WHY ONE MUST CONSIDER BUYING
Below are the returns of most indices over a period of time. Nifty Metal has performed well and on the basis of momentum principle we assume that the probability of uptrend continuing would be High. But we do not just jump into the trade. We must always have a defined risk appetite based on our degree of tolerating risk and we must stick to our appetite at all times. Hence we limit our risk by entering long or short at high probability zones. One may say that the index will revert to the mean after performing well. That may be true but we have seen price continuing to rise giving huge returns and so we have to look at high probability zones for keeping our risk to the bare minimum while taking our chances that is on offer. Trading or Investing is based on probability and expectations and so the best we can do is limit our risk while taking as many chances of gains we can have possibly based on our allocation and other restrains. Price continue to trend many times giving humongous returns and all we can do is take the positive expectations while keeping our risk at the minimum
Scrip Daily Weekly Monthly Quarterly Yearly For Period
NIFTY SMLCAP 50 0.86% 3.19% 8.92% 8.07% 0% 95.32%
Nifty Metal 3.85% 5.42% 24.81% 30.43% 4.42% 94.69%
NIFTY SMLCAP 100 0.86% 3.16% 9.60% 9.52% 9.30% 90.96%
Nifty Auto 0.34% 0.96% 13.01% 10.87% 6.30% 86.81%
Nifty IT 0.71% 2.11% 4.51% 9.57% 39.66% 84.24%
Nifty Midcap 50 1.45% 2.27% 15.98% 15.97% 15.11% 81.89%
Nifty Pvt Bank 0.97% 1.07% 23.63% 38.71% -7.75% 81.10%
Nifty Pharma 1.43% 2.38% 4.96% 0.24% 46.78% 78.51%
Nifty Bank 1.21% 1.07% 23.63% 37.75% -8.12% 72.73%
Nifty Commodities 1.17% 1.99% 11.46% 15.85% 5.01% 71.62%
Nifty Fin Service 1.61% 0.19% 22.36% 34.03% -2.20% 69.12%
Nifty 50 1% 1% 11.55% 15.47% 6.73% 66.48%
Nifty Energy -0.26% 2.42% 9.13% 8.78% 2.75% 63.07%
Nifty Infra 0.71% 0.77% 9.65% 11.38% 5.42% 61.48%
Nifty Next 50 0.90% 0.78% 10.38% 11.66% 6.64% 61.25%
Nifty Realty 0.77% 1.25% 11.50% 20.08% -14.77% 49.11%
Nifty MNC 0.82% 0.84% 5.28% 5.88% 7.59% 47.49%
Nifty Consumption 0.63% -0.20% 7.08% 7.26% 8.31% 44.80%
Nifty Media 0.59% 1.11% 4.38% -4.30% -17.87% 43.57%
Nifty FMCG 0.83% 0.79% 7.72% 6.23% 5.24% 32.45%
Nifty PSE 0.88% 3.40% 14.58% 15.65% -18.98% 29.93%
GOLDBEES 0.61% -1.99% -3.11% -2.81% 24.64% 18%
Nifty PSU Bank 1.93% 4.75% 22.10% 20.48% -39.03% 17.90%

Period - March 24 2020 to Nov 26 2020
When to Buy, How to Buy, What to Buy








We can do a similar relative analysis of Jindal Steel, JswSteel , Hindalco and others. I will leave it to you.
You can take trades based on any system you like. See to it that the system you use has a inbuilt mechanism to restrict losses by keeping your risk to the bare minimum. Take trades in lower time frames like H/15M/5M and sometimes lower. Analysis is to be done on Higher time frames. Remember HTF and LTF will depend on your philosophy and period of holding/type of trade. Look for retracements to enter longs or shorts on the high probability zones to keep the drawdown to minimum so that you have peace of mind :)

This is one of the method I use to select sectors and hence stocks for both trading and Investments. There would be a lot of questions and hopefully I would love to address them in future tutorials/Analysis.

All the best to Y'all!