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When To sell Stocks #Learning #StockMarket #StockIdeaswhen to sell a stock🧵 1) Repeated Corporate Governance issues - Exit a stock if there is news of repeated CG issues popping up every now and then. It takes a mountain to change a bad management. Better opportunities always exists. 2) If the financial performance of the company is declining - keep a watch on this over quarters to see if the performance in profits and sales is consistently going down. Attend AGM, Concalls to understand the reasons for same. 3) If the working capital days is increasing - keep a check on receivables days. A higher receivables days QoQ over a period, shows that working capital cycle is strained. 4) If borrowings increase - Check on if the borrowings have gone up due to capex or as a working capital effect. If for capex, check if company has ability to repay the same in a down cycle. Too much of leverage usually kills a business. 5) Key employees leaving the company in short interval of time - Often KMP like CFO, Compliance offer, VP, Director leave the company when they see something fishy in operations or when mgmt does not give heed to repeated red flag/warning. 6) When 5 yr Cash flow to operations(CFO)/EBITDA is less than 40% - There is no benchmark % for this but in my experience if the mgmt is not able to convert the profits into cash over a 5 yr period, it is better to exit the company. 7) When dividends are paid from borrowings - There are companies who often pay dividends from borrowings just to show they are shareholder friendly. Such companies usually bleed internally in their operations and over a point go bankrupt. 8) If Altman Z Score ratio (not applicable for financial companies) is <1.8 (in actual have it below 1.6). It uses profitability, leverage, liquidity, solvency and activity to predict whether a company has a high probability of becoming insolvent. Combine this with other factors 9) When the stock price reaches a point which no longer reflects the underlying business - This can be tricky as many a time stock price reflects sentiments of a proposed capex or potential opportunities for M&A/demerger been considered. Hence have sufficient Margin of Safety. 10) Hype & Hope story - Too much media attention can often lead to a hype created in guise of hope for a business turnaround which often leads to collapse once the frenzy fizzles out. Stay away or book profits from such moves. 11) When you feel like converting your trading position to investment position - Again having seen many (including myself at some point) convert trading position to investment, it has always lead to sunk investment. A trading stock hardly creates wealth in my experience. 12) Unrelated diversification by company - Example of Satyam is well known. Similarly when Avanti feeds acquired football team Blackburn rovers. Same with VRL logistics promoter announcing foray into airlines. Such unrelated diversification shows poor capital allocation. 13) When the investment gives you sleepless nights - Exit the investment at first go, if such investment keeps you awake all night.! If you have invested on a basis of thesis, stick on to such investment as long as rationale is playing out. 14) The company market share is falling - This might be due to competitor's entry into product lines or quality of product deteriorating. If the mgmt is not able to pull up its socks quickly, it might lose out a significant market share in no time with cascading effects. 15) When the company doesn't utilise the funds it was supposed to as per IPO - This applies usually for new IPO companies in first few yrs of Ops. If funds are utilised otherwise than for purpose it was raised for, Exit.! First signs of funds taken out of company by promoters. 16) Often investors sell stocks on basis of PE or on back of stock up in quick time. Many investors miss the journey of holding on to stocks for long time due to these factors. A company with high PE can continue to remain high for quite a long period of time without any correction. 17) At times, many of the above factors have to be combined to take a overall view. Likewise, better opportunities do come up as well for switch of stocks/industry bets. PF allocation as well matters along with diversification. Stick to your style of investing. 18) Selling stock is as important as buying one. Be invested as long as your rationale for investment and thesis is in place. Develop the urge of not selling stock when price is down but business continues to grow. Sooner or later, you will be REWARDED for your perseverance.!
NSE:NIFTYEducation
by Jordan_n-
One of my biggest lessons market taught me, read description.I always wanted more from the swing trades I took and I failed to recognise the right target for my trade which many times lead to the stock going down from a major resistance or a trend reversal because of the resistance zone because of which i had to lose a winning trade many times and with time and practice i realised what is best for me is to sell that stock in a major resistance if there is no sign if it will break the resistance such as accumulating volume, anyway i can buy the stock back if it manages to break the resistance , in the reference chart also we can see two major trend reversals because of the resistance.
NSE:GMDCLTDEducation
by Jayesh_chopra
2
Trend Continuation PatternBullish Flag Chart Pattern: Tata Chemicals Description: The flag represents a brief pause in a dynamic market move & one of the requirements for a flag pattern is that it should proceed by a sharp and almost straight-line move. It represents situations where a step advance or decline has gotten ahead of itself, and where the market pauses briefly to "catch its breath " before running off again in the same direction. Construction of Flag & Pole pattern: The flag resembles a parallelogram or rectangle market by two parallel trendlines that tend to slope against the prevailing trend. The flag usually occurs after a sharp move & represents a brief pause in the trend. The flag should slope against the trend. Volume should dry up during the formation & built again on the breakout . How to trade flag and pole patterns: The sideways period is often followed by another sharp rise. This is where the trading opportunity comes in. Once the flag pole and a flag or have formed, traders watch for the price to breakout above the upper flag/trend line. When this occurs, enter a long trade. Conclusion: 1-Flag patterns are a commonly used technical analysis tool and majorly a choice of breakout traders and swing traders. 2- Flag is formed when there is a minor profit booking in either an uptrend or a downtrend. 3- The pole is formed by a line that represents the primary trend in the market. 4- It is important that flags are preceded by a sharp advance or decline.
NSE:TATACHEMEducation
by Indrajit08
3
Spotting a simple positive trendDisclaimer - I am also a learner! and I am publishing this to share what I learnt with other learners and to get some comments from veterans of this field This is a simple positive trend prediction. I have started by just highlighting an assumed resistance and support by joining the highs and lows respectively. Then you can get a clearly idea that the current trend is a positive one. In addition to this trend recognition, the resistance of the stock once also became the support for the stock after a while, entailing that there is a positive trend. I hope my discovery was simple and valid for you guys and I am open to comments : ) Thank you!
I
by SMK98
Support and Resistance for 7 may 2021support and resistance analysis for 7 may 2021 previous day open 32915 previous day close 32875 previous day high 32956 previous day low 32564 support for tommorrow 32564,32240 resistance for tommorrow 33394 Wait for breakout or breakdown of support or resistance or treadline In candlestics look for pin bar or hammer or inside candle in support and resistance area NSE:BANKNIFTY Alawys remember to use stop loss while trading. Never trade with frustrated mind. Do be to gready. Always use proper money management. And never trade with money you cant effort to lose. ALWAYS REMEMBER INVESTING/TRADING IS BUSINESS WHERE U GET PAID FOR BEING PATIENT NSE:BANKNIFTY
NSE:BANKNIFTYShort
by diptanshusharma97
IRON FLY STRATEGY FOR NIFTY 10 MAR EXPIRYIron Fly is a non directional strategy that works very well in a sideways market. I was of the view that the market would be sideways for the reasons mentioned in the video. This worked very well for the weekly expiry and it is used very often in confusing markets such as this. This was one of my first attempts at vocally explaining strategies so I may not have been as clear in the details. Let me know if you have any questions about this strategy in the comments. Please LIKE if you would want to see more content like this. :)
NSE:NIFTYEducation
by ArcherDAVIS
1
BANKNIFTY update...Take a look. Big momentum..BANKNIFTY is doing a retest.. now it can go either up or down. .but by studying level from 13 December 2020 to 6 January 2020 .there are about more chances to succeed in retesting and NIFTY is also going up. when price crosses ichimoku cloud and trend line you must short ..There will also be a good target if it succeeds in retesting. .according to me take entry at somewhere around 32201 rs and target 1 be 32426 rs and target 2 be 32633.
NSE:BANKNIFTY
by Still_Learning_Akhil