My Method

What I understood reading books and observing the markets over a decade … is In long term, price follows earnings which is reported Quarterly. So this is what I call the FA signal. For the remaining of 89 days, stock price moves here and there, based on supply and demand without any solid reason behind them. This is the noise. One need to remove these noise from the price movement to get a feel of where the stock is going. TA makes meaning out of this noise and makes profit.

I collect watchlist of stocks from Result performance, Expert Picks, Recommendations from fund houses etc … and buy the first lot at a technically opportune time

When it reaches at a predetermined Target Price I sell all and buy 75% Quantity Quantity the same day at current market price

Now the safety factor achieved is 29%

Used to go on doing the same profit booking system till I gain confidence in the stock … if a stock retraces and comes back to the cost of holding price …. I exit without any hesitation.

After two profit bookings … a stock shall normally never make a loss again as the position building is gradual by averaging on the rise …. Unless otherwise there is a very valid reason I do not average on the way down

I have tried to explain with three stocks my profit booking analogy,,, hope it is understandable

After er a reasonable size is built up in a stock … it becomes part of the long term portfolio. It is a very boring process …Like stamp collection, it is a stock collection process

Once a stock enters into the Long Term Portfolio, I trim/add based on market condition. I book profit when the valuation goes beyond justifiable fundamentals … Like I did in Berger paints and start a SEP for the same amount booked …

I am happy with this process …. any suggestions welcome

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