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How do I select a price and time to buy any
stock for long term investment?
People often ask me about , at what price and at what time should they buy stock for long term investment . In stock
market , identifying correct entry and exit points are very important . Even if you buy a stock which has a very strong
fundamental base , even then it is important to buy the stock at correct price to maximise your gains .
Please note , this guide is only for long term investors . Here is the day trading strategy that i myself
First and foremost thing -- Before we learn about selecting the price and time at which we have to buy
the share , It is very important to ensure that the share is fundamentally strong.
How to identify Fundamentally strong Stocks ?
There are 2 ways to select stocks that are fundamentally strong
Learn fundamental analysis yourself and then put up efforts
Pick Up stocks that the major mutual funds have in their portfolio.
The second method is most easy and reliable and requires very less efforts. Its not a rocket science that
Mutual funds which are putting hundreds of crores of rupees in the market , will always invest after
completely studying and analysing the fundamentals of the company . So we ourselves can add those
stocks in our portfolio and can be ensure that they are fundamentally strong .
How To find Stocks that major Mutual funds are
Step 1 . Go to www.moneycontrol.com
Step 2 . Click on Mutual funds Tab
Step3. A webpage will open - Showing the list of top mutual funds . For reference ,see the pick below
Step 4. Click on any of the mutual fund . For example. I clicked on Birla SL Frontline Equity (G). The
following webpage will open .
Step 5. Click on Holdings Tab in extreme left box and it will show the list of all the stocks which that
particular mutual fund is holding in their portfolio.
BOOM !! We found large number of fundamentally strong stocks in less than 5 minutes and that too
without having any knowledge of Fundamental analysis .
Click on Each Mutual fund and find their stocks in less than 5 minutes . Isnt that great :)
Just identifying the stocks and buying them wont fetch you maximum returns . It is very important to Buy these
stocks at a specific price to earn most out of them .
When to Buy fundamentally strong stocks for long term ?
For this , I follow only 2 methods and these methods have always worked well for me .
Buy the stock when weekly RSI touches 33 or goes below it.
Buy when stock starts trading below its intrinsic value .
Lets learn both the methods in detail.
Method 1 - Buy when Weekly RSI Touches 33 or goes below it.
RSI stands for relative strength index . It is a technical indicators which is used by traders to identify whether the
stock is over brought or over sold. This is the most popular indicator and can be found easily on any charting
OUR RULE : Buy the stock everytime its RSI touches 33 or goes below . This method actually works
and can give you unexpected returns .
Step.1. Open Any charting website . Here , we have used investing.com . You can also go for icharts.in and many
Step 2, Open the Weekly chart of the stock you want to buy along with RSI
Step 3. Wait and Buy the stock only when its RSI reaches 33.
Lets back Test this method on Infosys
In the above chart , we can clearly see that whenever RSI touches 33 or goes below it , stock creates a bottom and start
If someone would buy the stock , when RSI was above 33 , then He/She will loose the potential profit in the long run
and will also have to see some downfall below his/her buying price.
Things to Keep in Mind
Make sure that you picked up a fundamental stock.
Have long term horizon . Atleast 1 year .
Do not get affected by day to day fluctuation in the stock price .
Method 2 - Buy when stock starts trading below its intrinsic
Intrinsic value is the true value of stock . It is the value which shows the real worth of the stock or company .
Market forces of demand and supply make sure that stock trades on its intrinsic value some day . If stock trades above
its intrinsic value , then there are chances that if stock falls , it may move towards its intrinsic value . In the same
way , if stock is trading below its intrinsic value , then market forces will make it to trade around its
This means that if any fundamentally strong stock falls below its intrinsic value , then it will
definitely bounce back towards its intrinsic value .
I am sure it is very simple .