07 Nov 2021 | Trendline Investor | Newsletter 23
Can Nifty head towards 18300 again?
Disclaimer: I am not a SEBI registered advisor and this newsletter is for educational purposes only
Hello <<First Name>>,
I hope you had a wonderful Diwali! 🎉
Welcome to the 23rd edition of the Weekly Trendline Investor Newsletter. In this edition you will find the Market outlook and my Top 4 stock picks for the week. Hope you enjoy!
Markets in consolidation mode:
Nifty opened the week on a positive note reversing strongly from a short term trendline support and continued to consolidate in this holiday-shortened week.
I believe this consolidation might continue for a few more days before we break out and head higher towards levels of 18300 again in the coming weeks.
18300-350 can act as a short term resistance above which 18600 can be seen again.
Levels of 17450-17600 can act as a short term support in Nifty.
The market breadth continues to consolidate given the weak markets.
As I always say, there are pockets of strength in the market and if you are able to spot them then you can still continue to make money slowly and steadily even in a weak market.
You can find all the daily YouTube live sessions (every Monday to Friday at 11PM IST) along with the review of my ‘Trade with Trendline Investor’ portfolio (which is up 21%), on my YouTube channel. Do check it out.
Top 4 Stock Picks for the week
For the 88 stocks recommended in the past editions, the below chart highlights the overall stock performance. A total of 28 trades have been closed.
Best performers 🏆:
Gokul Agro is up 55%
Kitex is up 42%
VIP Industries is up 39%
McDowell is up 39%
Worst Performer ⚠️:
1. Caplin Point Laboratories Ltd 🧪
Caplin Point Laboratories Ltd is engaged in the manufacturing and sourcing of APIs, finished formulations, R&D, clinical research with presence in Latin America, Africa, USA.
The company has increased its Sales from 80 crs in 2011 to 1061 crs in 2021and increased its profits from 8 crs to 314 crs in the same period with operating margins in the 30% range.
Technically the stock has been trending in a parallel channel and broke out from a 4.5 year long consolidation in Jul’21 and has been consolidating for the last 4 months. The stock is looking good to head towards levels of 1250 and higher in the coming years.
2. Orient Electric Ltd 💡
Orient Electric is one of the leading consumer electrical brands in India with a diverse portfolio consisting of fans, lighting, home appliances and switch-gears.
The company has been doing well financially and increased its sales from 212 crs in 2017 to 2033 crs in 2021 and increased its profits by 8x and reduced its debt from 211 crs to 61 crs in the same period.
Technically, the stock has been in a steady uptrend since listing and is looking very good on charts and looks like targets of 500 can be seen in the coming months.
3. Garden Reach Shipbuilders & Engineers Ltd 🚢
Garden Reach Shipbuilders & Engineers Ltd is a premier shipbuilding company in India under the administrative control of the Ministry of Defence, primarily catering to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard.
The company Sales have been steady since 2018 around the 1350 cr mark. However, the operational metrics seem to be improving significantly in the last few quarters which has led to a 400 bps increase in operating margins in 2021.
Technically, the stock is breaking out from a 2 year symmetrical triangle and looks good to head towards 350 and higher levels in the coming years.
4. T.V. Today Network Ltd 📺
TV Today Network is primarily engaged in broadcasting television news channels, radio stations and newspaper publishing in India.
Financially, the company has been seeing a slight increase in Sales and profits over the last few years and nothing exciting otherwise.
Technically, the stock retested a multi-year support zone in Mar’20 and has reversed strongly since and has been consolidating for the last 6 months.
The stock is looking strong again and can head towards levels of 450 and higher in the coming months.
Trend Following Series
Many of you have written to me in the last couple of weeks, asking me how beginners should approach the markets and how to start learning technical analysis.
One of the best places to start, is my blog which provides a structured approach to technical analysis with several examples. So if you have not read the basics of technical analysis yet you can find it here, in which I have covered some important yet basic principles of charting and more.
Until next week..
Your Trendline Investor!
For any queries, please contact me on twitter @dmdsplyinvestor using hashtag #Asktrendlineinvestor.
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