Stock Selection List Short Term Study (2 Weeks Timeframe) for 15-Sep-20

Since mid of August, I have started doing this as a study so the readers of this blog can learn along with me. I am also giving valuable list of stocks for quick profit. If anyone bought Kiriindus and Trent on the morning of 25th August as they showed up in 24th August list, they would have gotten a profit of 4-6% by evening.

I got inspired for this selection when I once noticed Indigo on daily chart and next day bought its CE at 9 and sold at 18 after few hours. Later traded TNPL, INFIBEAM, DIAMONDYD, JOCIL, BLISSGVS, ATULAUTO, during mid weeks of August and booked about 5% profit in a short time. Every stock may not rise the very next day. But I observed the potential for a rise in the next 10 days, on few stocks over a historical period of five years. Thus I decided to make such list everyday and trade familiar stocks or observe them for building trading watchlists to grow familiarity to trade later.

Today's short term selection list for short term study (2 weeks timeframe). Their performance will be reviewed after 28-Sep.

company symbol today's close price % rise today

AARVEEDEN 12.8 2.4

CAPLIPOINT 584.4 5.6

DTIL 249.1 1.2

ELECTCAST 17.1 6.5

GAYAPROJ 17.9 5

IFBAGRO 353.4 9.2

INDHOTEL 103.3 0.6

INDOTECH 103.2 7.4

KOKUYOCMLN 66.2 16.1

LAOPALA 225.7 7.9

RAJTV 40 10.5

SMSLIFE 497.6 10

UNICHEMLAB 260.4 5

VETO 47.1 8

VSSL 76.1 4.2

ZYDUSWELL 1780.6 7.3

Same table as a picture.

Commentary:

Few days ago I bought shares of AIAENG instead of LAOPALA. I wanted to select between the two. I checked their company names in google news and found about quarterly results news. The performance and potential for AIAENG seemed better than LAOPALA. Indeed AIAENG moved first. By morning today I was seeing 7% gain from the purchase price. But LAOPALA despite lagging for few days, it bucked the trend today by rising 8% and making into the list. Between the two stocks, I have known Laopala from a long time and would have picked it for long term SIP, if I had to. The lesson I learn from not only this day but also earlier months and years is that it is better to stick to stocks that we have identified to be better performing over years of observation. We learn their pattern and can easily decide to hold or sell without confusion when they pullback. It is not easy to with new stocks.

What I am realizing these days is that identifying such potential stocks for long term is better done in real time by intuition than simply studying massive historical data and trying to filter stocks from them. Even studying news and research reports doesn't help much. We have a stock like Lincoln Pharma for which fundamental researchers would give good information but the stock doesn't move like a growth stock. That is because it deosn't have investor interest. I have introduced this term in this post few days ago.

I was one of the very few people from a large cohort who continued to do something in the market after more than a decade because I always believed I have some intuition that helps me. Recently I did research into intuition based trading vs. algorithmic (or mechanical trading systems) and realized that I don't have as much intuition as I thought.

Then I thought my intuition was good for long term investing. I also thought I could detect change in market sentiment when it changes from bullish to bearish and vice versa. Now I realized that this detection is from intuition which I can do in real time but can't figure out how I did by looking back at historical data. Same way identifying potential long term stocks, short term growth stocks, is also intuition based. Sometimes I get it. But because of the mix of different information, short term lists, learning every week, I didn't realize I am messing up long term trading.

Now some things are becoming clear. The list we get here is not necessarily the one to select. We can use this list to see which sector stocks are showing and buy stocks from that sector which are in our identified long term watch list. Or the watch list of shares with investor interest. For example, Shredigcem I told about having investor interest, is such an example, albeit not the best stock in such sample. Last few days it kept going up and today it almost retraced half of its fall. There are other stocks like TNPL which I took from this list and it is not recovering. One setback for TNPL is high dividend payout. A mistake I did with it is that, I took entry into it second time after I made profit first time. These stocks definitely give a chance the first time. For the second time, third time, etc., they have to be identified into our list of stocks with investor interest. Few weeks was a short time for that.

On the other I tried Finpipe and sold before it rose 7% one day. It fell again to same levels where I bought initially. It rose again (yesterday made it to list again) to levels where it was on the day of 7% rise. I knew Finpipe from several years, so picking that over TNPL would have been the right thing to do. Because having observed its price movement, I would be able to decide to hold for a second/third chance to exit, simply based on intuition, no calculations or seeing charts or checking news required. With TNPL I would only be confused checking news, charts or any information.

This is the way traders can learn the importance of intuition and apply it in trading decisions.

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