Ask Your Query
I have 300 shares of Infosys, and the price has touched ₹1,400 three times. I bought the shares at ₹1,280. What should I do?
Since the stock has touched ₹1,400 three times, it has formed a very strong resistance at that level. There might be a resistance zone there. First, you need to analyze what kind of candlesticks have formed at that level. Second, you can sell a portion of your holdings there. Based on the fundamentals, the company looks strong at that level, especially after analyzing its recent quarterly results.
How do you identify whether a resistance is actually a resistance?
Simply, when you see that a stock is showing signs of a reversal through multiple types of candlestick patterns, it can be considered a resistance. For example, candlestick patterns such as a Shooting Star or an Evening Star pattern may indicate that the price is facing resistance.
The second factor is valuation. Valuation can also act as a resistance. When a company's valuation is significantly higher than the rest of the industry, based on metrics such as DCF valuation, relative valuation, or the P/E ratio, it can also be considered a resistance for the stock price.
However, resistance is not a single line. It is usually a price range that is considered a resistance zone.
Can we make money through technical analysis?
If making money in the capital market is considered a long journey, then technical analysis is one part of that journey. It is one of the best ways to understand whether we can make money through the market.
Technical analysis can greatly help you in booking your target, placing a stop-loss, and identifying another entry point. However, relying entirely on technical analysis for every trade is not the right approach. Based on my analysis, taking every trading decision solely on technical analysis is a wrong process and has not proven to be consistently successful.
I have ₹3 lakh, and I want to hold this money for the next three months. Should I invest it in the stock market? If yes, what are my options?
It is generally not a good approach to invest money in the stock market based on a fixed time limit. The reason is that we do not know when we will achieve the desired returns or returns that meet our expectations.
In this particular case, it is better not to invest if you need the money after three months. However, if you are willing to take a limited capital risk of around 4–6%, then you may consider investing in a mutual fund, as it can be one of the better options. Alternatively, you can invest a portion of your money in large-cap companies. For example, you may invest only 50% of your capital in large-cap stocks and keep the remaining 50% in cash while waiting for better opportunities.
This approach is still risky, but it may help you manage your risk more effectively.
If the current market situation involves uncertainty, such as a war scenario or other major global events, investing becomes even riskier in any format. In such situations, simply holding your capital can sometimes be the best decision. Preserving your capital is also a winning strategy because, during difficult market conditions, you avoid losses that many other investors may face.
I have a salary of ₹42,000. How should I invest or manage my money?
Since you have a salary of ₹42,000 and are in the middle phase of your career—for example, around the age of 30—and your mindset is such that you are comfortable taking some risk, I would suggest investing around ₹5,000 to ₹7,000 every month through a SIP.
You can allocate 50% of your SIP to small-cap mutual funds and the remaining 50% to multi-cap mutual funds, as this can be a suitable approach.
If you are able to save an additional ₹5,000 to ₹10,000 every month, you may consider investing that amount in selected mid-cap stocks.
In this case, I am assuming that you have a relatively aggressive risk profile because of your age and your ability to take some risk. As time passes, observe how your investments perform. For example, when your stocks move up by around 10% or your mutual fund portfolio grows by about 3–4%, try to understand what factors caused those returns.
This is important because learning how the stock market works can help you make better investment decisions in the future. As your income and investments grow over time, the knowledge you gain today can become one of your greatest assets.
Which is better for the future: mutual funds or stocks?
I will not make this answer overly complicated. In my view, long-term investing in stocks can be better than investing in mutual funds. However, for that to work, you need to pay close attention to your investments and select the right companies. That is the most important part.
Sometimes, stocks can generate returns in six months that a mutual fund may take several years to achieve. However, you also need to understand when to invest and, more importantly, when to exit, because stock investing requires regular monitoring and adjustments.
On the other hand, mutual funds provide a more disciplined and systematic approach to investing.
If I had to suggest an allocation, I would recommend keeping around 60% of your investments in stocks and 40% in mutual funds. However, for long-term wealth creation, it is beneficial to invest in both. This allows you to compare their performance, gain experience, and determine which investment approach is ultimately more suitable for you.
How could Ola's stock price, which is currently trading at around ₹40, reach ₹100?
This type of analysis requires a great deal of in-depth research and intellectual effort. It also requires the ability to understand a business from multiple perspectives.
To determine whether a stock like Ola can reach ₹100, you need to predict how the business is likely to perform in the future. You must understand what could make it a stronger business, what management decisions could improve its performance, and what factors are currently affecting the stock negatively. You also need to evaluate how the company can overcome its challenges and move from a negative position to a positive one.
Such analysis requires a lot of attention and the study of multiple reports, including annual reports, quarterly results, credit rating reports, and other relevant documents. Even after reading these reports, you need to combine all the information and form a well-rounded conclusion. This process requires significant personal experience and judgment.
No tool or software alone can tell you with certainty whether a stock will be the best investment. That is why fundamental analysis is extremely important when evaluating a company's long-term potential.
Which analysis is more appropriate: technical analysis or fundamental analysis?
Simply put, you need to understand that technical analysis has its limitations. This is one of the most important points. No matter how many charts, candlestick patterns, or technical indicators you study, they all have limitations. At a certain point, technical analysis can only provide limited information.
On the other hand, fundamental analysis has almost unlimited scope. The reason is simple—you can never completely finish analyzing a business. Every month, new policies are introduced, new reports are released, and every quarter, companies publish new financial results. As a result, there is always new information to analyze and understand.
The more you improve your ability to analyze businesses, the better your investment decisions can become. Ultimately, the stock market follows the performance of the underlying business. If a company continues to grow its revenue and generate higher profits, no technical indicator or resistance level can stop the stock from rising over the long term.
That is why, in my view, fundamental analysis is much more important than technical analysis for long-term investing.
How do you understand the P/E ratio?
Many people believe that a P/E ratio of 20 or 30 is always considered good. However, that is not the correct way to interpret the P/E ratio.
The P/E ratio does not have a fixed benchmark because it varies from one sector to another. For example, infrastructure and railway companies may trade at a P/E ratio of around 10 to 20. On the other hand, semiconductor, chip, and EMS companies may trade at much higher P/E ratios, often ranging from 60 to 100.
The reason is that semiconductor and chip companies are generally expected to have much higher growth potential than infrastructure companies. Therefore, a higher P/E ratio does not necessarily mean that a stock is overvalued.
The P/E ratio does not define the quality of a company on its own. It is only one part of fundamental analysis and should always be evaluated along with other financial and business factors.
How should I track my portfolio?
There are several ways to track a portfolio because the approach depends on the type of stocks you own.
For example, if you hold stocks from the EMS sector, you should monitor which new companies are entering the industry. You should also keep track of government policies related to the sector, such as import policies concerning China, as China has a dominant position in the global EMS industry. In addition, you should follow any new government announcements or policy changes that may affect the EMS sector.
These developments can happen at any time, so there is no fixed schedule for tracking your portfolio. The frequency of tracking depends on the type of stocks you hold and the policies, industry developments, and other factors that are related to those businesses.
Ultimately, you need to understand the company's reports because they help justify its valuation. A company's valuation depends heavily on its future cash flows, and changes in policies, industry conditions, and business performance can significantly affect those future cash flows.
I own shares of JP Power, and the stock has shown highly speculative movements. It seems to make such moves every six months. Why does this happen, and how should I track this stock?
You need to monitor the trading volumes and understand what kind of market participants or groups are active in the stock. There are certain groups of stocks that often experience speculative movements, where trading volumes increase sharply and frequent buying and selling take place. We have seen similar patterns in many stocks.
However, the most important factors to track are the company's quarterly results, revenue growth, and overall business performance. You should also compare the company's valuation with that of its industry peers to understand whether the stock is fairly valued or not.
These are the key factors you should monitor while tracking such a stock. If you need a detailed analysis, we can provide you with a comprehensive report. Simply contact us on WhatsApp.
The Indian stock market has historically delivered around 12–15% CAGR. But how can I achieve a CAGR of 25% or 30% in my portfolio?
Achieving a CAGR of 20–30% or higher requires a great deal of attention and discipline. You need to build a carefully selected portfolio, for example, consisting of around five stocks from different industries. Then, you must continuously track every important development related to those companies.
At times, you may also need to partially exit your positions. For example, if a stock has gained 50% within six months, which is a remarkable return, you may consider booking profits by selling around 20% of your holdings. This can be an effective portfolio management strategy.
You also need to manage risk over different time periods and assess the potential impact of geopolitical uncertainties. It is important to understand how such events could affect a company's supply chain, investments, capital expenditure (CapEx), valuation, and overall business performance.
The key principle is simple: if you want higher returns, you must be willing to give significantly more attention to your investments. Higher returns require deeper research, continuous monitoring, and better decision-making.