Published on: December 1, 2023
Investing and trading can feel like dancing through uncertainty, where every step holds a mix of excitement and anxiety. Every investor has these questions in mind:
How can I time the market for the best entry?
What’s the optimal stock selection process?
If you are grappling with these dilemmas, this is your ultimate guide, offering clarity and direction to solve the maze of financial decisions.
My Funda-Techno Approach
In October 2023, when the Nifty was hovering at sub-19,000 levels, I visited our Forum, to share my insights on navigating market complexities.
Being a Fundamentalist, sitting in a room of chartists, and sensing that the market might be nearing its bottom, I crafted an approach that harmonises fundamental analysis with technical analysis, aptly termed the Funda-Techno approach.
Identifying Resilient Stocks
The first step involved pinpointing stocks that had not succumbed to the pressure and broken their previous swing lows, demonstrating their ability to withstand market downturns.
Unearthing Financial Strength
Well, the animal within roared, I shifted my approach to fundamental analysis to refine the stock list with filters on the companies that reported quarterly results and achieved a 10% YoY growth in PAT.
In an environment characterised by pessimism when markets were falling, these companies stood out as beacons of optimism, signalling their financial strength and potential for growth.
Harnessing the Power of Radar
To simplify the implementation of this strategy, I recommend our product Radar by Definedge Securities, a tool specifically designed to streamline decision-making processes. Radar empowers investors to identify stocks that align with their investment criteria effectively.
Relative Strength: A Measure of Outperformance
The next step entailed evaluating the Relative Strength performance of the selected stocks against the Nifty benchmark. This analysis narrowed the list to 67 companies that consistently outperformed the market giant, showcasing their ability to deliver superior returns.
Time for some Triumphant
With markets soaring to unprecedented heights, the Funda-Techno approach has proven its efficacy.
This strategy has successfully guided investors following me towards profitable opportunities, highlighting the potency of blending fundamental analysis with technical insights.
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