4th Consecutive positive close – Hold for short term

Blog meant for 22 Nov 2017 Wednesday

Dear Friends,

Nifty went up by 28 points to close at 10327. The rise was helped by positive global cues in Asia. As of now, European and US markets are trading around 1% higher and hence our markets could also open positively tomorrow.

For the last four days, Nifty has had positive closes continuously. However, the rise has not slow and steady and not huge rises. We have to see if the markets can continue the rally or will it consolidate a bit in the next few days.

The analysis for tomorrow for short term as per technical analysis is as follows:

Nifty is in Hold zone.

THE HOLDS ARE- AXIS BANK, MARUTI, SBI, TCS, TITAN, INFOSYS, M&M, RELIANCE, HDFC BANK

THE DON’T BUYS ARE- YES BANK, VEDANTA, HDFC, ITC, HINDALCO, ASIAN PAINT

SELL – Kotak Mahindra Bank (As mentioned in the blog yesterday, the blue had gone just above the red line yesterday and today the stock fell and hence it has come down to Sell indication. Sometimes when you do not sell when the Sell indication arises, the stock may fall further and make you feel that you made a mistake of not selling on the previous day).

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Question of the Day – 

Question – Is it better to buy companies which are prices at very low like Rs.50, 100 or 200 rather than buying the shares of companies whose share price is high like Rs.800, 1200, 1500 etc?

Answer –

This is a very interesting and common question that many new investors have.

New investors usually have a small amount to invest in Stock Markets. They may have only Rs.2000 or 3000 every month to invest. Hence, they usually feel that if we buy shares of a company which is Rs.200 per share, then they can buy 10-15 shares rather than buying only 1 or 2 shares of a company which is priced at Rs.1100.

Although, the above makes sense when you look at it in layman’s perspective, it is not a good idea once you understand Stock Markets more deeply.

For example, it is like saying that it is better to buy 1 acre of land in a rural area rather than a small plot of land in the city. For the same investment, we may get a large piece of land in a village and may get only 600 sq.ft in the city. But, the prospects of appreciation will be definitely more in the city than in the village.

This is the logic of investing in bluechip companies even if their share price is little high. Buying shares of companies which are not performing well in terms of profits just because they are very cheaply priced is a common mistake many people commit when they do not know much about Stock Markets.

Buying companies which are leaders in their respective sectors will ensure that even if you do not make huge profits, the chance of losing money is very less.

When you buy small, unknown and risky companies, you may make a huge profits if the company does very well but there is a very high chance of losing a lot of money if those companies perform badly in the future.

Also, ignore SMSes which suggest you to buy shares of certain companies promising huge appreciation in a few days. These are all ways to ensure that innocent investors lose money and help other criminal minded people make money in the process.

Hence, be careful about this mindset when you invest in the future.

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The above stocks are for tracking and watching purpose only. You need not buy all the above stocks for short term. Only stick to the list of companies which were suggested during the Workshop and Buy them only when the Buy indication arises for them.

All the best.

Dr Bharath Chandra and Rohan

Please do not comment on the blog. Any questions or clarifications can be asked by sending us an email with your registration number given to you during the Workshop. Questions without quoting registration number will not be answered.

(The above comments are only the personal views of the authors of this blog. Please do your own research before taking any investment decisions. The reader of this blog must understand and take full responsibility for the Profit or Loss made by taking actions based on the above views)