Model Book - February 2024
Technical study of some of the
best-performing stocks of February 2024
Note:
1.
These are not stocks I have trade. These are just the model stocks – these are just stocks that did exactly what is expected of healthy stocks breaking out of healthy bases.
2.
These are not BUY/SELL recommendations.
3.
This has been made in an effort to study how the winning stocks ordinarily behave and perform, and to help improve your future trading results.
4.
For every successful swing trade, there are many that fail. Remember that risk management is always the first priority.
5.
A lot more goes into successful swing trading, and being aware of the environment and position sizing are two very important aspects.
Thank you!
Please let me know if this was helpful.
Feel free to reach out if you have any suggestions / questions.
You can reach me on Twitter (X) DMs - https://twitter.com/tradelyfblog
Model Book - February 2024
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58% returns in 10 days
IOB - Daily chart
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1. Long base of 131 days
2. On 29th January, the stock broke out from a tight consolidation 5-day consolidation on twice 3.3x the 20-day average volume.
3. On 1st February, the stock again moved on huge volumes after a 2-day halt. This is an optimal point to pyramid your existing position.
4. Finally on 8th February, after opening with a gap of 2.7%, the stock started selling off. This price action shows extreme weakness and coupled with the prior price action
shows signs of a climax top in the making. The right time to sell here would be when the daily candle confirms major weakness. For me, that point is an 8% intraday decline
in the stock.
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110% returns in 15 days
JUBLINDS - Weekly chart
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1. The weekly chart shows a long 168-day base.
2. The volatility can be seen contracting on the right side of the base and the stock broke out of the base soon after.
JUBLINDS - Daily chart
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1. Jubilant Industries broke out from a very tight consolidation within its base on 12th February. This move was on a massive 55.7x of the stock’s 20-day average volumes.
Such volumes are a clear sign of institutional buying, and the timing of this move - right after the quarterly earnings announcement - indicates institutional buying.
2. After a 1 day halt, the stock again started gaining on huge volumes on 14th February. A break of the previous day’s high at 773 is an optimal point to pyramid your position.
This day’s low can also be used as a point to trail your stop loss.
3. Thereafter, a similar pivot break happened on 19th February but the move was on lower than average volumes and hence not a valid pyramid point.
4. On 22nd February, the stock was assigned a 5% circuit limit and this is a time to start being cautious. You can either trim your position here if it is overweight or continue
holding but be ready to sell at the first signs of weakness. The last thing we want is to get stuck in back-to-back lower circuits.
5. On 27th February, the stock finally showed the weakness we were watching out for and this is my exit signal. Whatever happens after my exit is of no concern to me - the
priority is to protect my money which is at higher than usual risk because of the 5% circuit limit.
Model Book - February 2024
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61% returns in 29 days, trade still running
KSL - Daily Chart
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1. Kalyani Steels made a long base of 118 days from September 15, 2023, to January 10, 2024.
2. The stock broke out of its base on 9.3x of its 20-day average volumes on 11th January. However, it could not be bought there because of the huge gap-up.
3. The stock consolidated thereafter for 21 days and finally broke out on 2nd February. This can be the entry point but only with a small position size because results are due
the next day.
4. Earnings come out and the stock reacts positively, gaining 5% on the earnings day. However, there is no clear pivot here and additional buying will bring in unfavourable
risk in the absence of a low-risk entry point.
5. The stock continues moving up swiftly and finally breaks out of a pivot on 14th February. This is the ideal point to buy more of the stock with a stop loss below the
consolidation low.
6. On 23rd February, the stock breaks out of another short-term consolidation. This is another good point to pyramid your position and trail your stop loss to the low of the day.
The stock squats on the same day but this is not a good enough reason to close the position.
7. On 1st March, the stock breaks out of another short-term consolidation. This is once again a good point to pyramid your position and trail your stop loss to the low of the day.
8. The stock still hasn't given an exit signal after moving 61% in just 29 days.
Model Book - February 2024
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33.2% compounded returns in 19 days in 2 trades
INOXINDIA - Daily Chart
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Trade 1 - 5.3% gain in 2 days
1. Inox India made a 47-day base after getting listed on the exchange.
2. From 31st January to 5th February, the stock moved within a very tight range of less than 6%.
3. On 6th February, the stock broke from this tight range on more than 8x the average volumes and triggered an entry. The stock went on to close the day with close to 10%
gains.
4. The next day, on 7th February, the stock opened with a gap of 5% but gave up its gains, closing the day with less than 2% of gains. This is a bad sign, especially given that
we dont have a lot of profits to play with, and it would be wise to either trim the position here (if overweight), or set a trailing stop loss to the day low (if average of
underweight). This tighter-than-usual trailing stop loss also makes sense because the earnings announcement is due soon, and we will anyway be closing the trade before
earnings if strength is not seen.
5. Note that had there been a bigger profit cushion, there was no real need to trail the stop loss so close. The stock showed weakness but no major weakness warranting an exit
had there been a decent profit cushion.
6. The trailing stop loss got hit the next day closing the trade with a gain of 5.3% in 2 days.
Since the stock showed no major weakness, it should stay on the watchlist for a potential re-entry.
Trade 2 - 26.4% gain in 17 days
1. On 14th February, after the earnings announcement, the stock bounced back (referred to as tennis-ball action on the chart). A move above the previous day’s highs and on
larger-than-average volumes is a valid entry point here around the 1004 price point with a stop loss at the day’s low.
2. After a decent up-move post entry, the stock consolidated from 16th February to 22nd February.
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3. On 23rd February, Inox India broke out from its 6-day consolidation mentioned above. This is the optimal point to pyramid the position and also to trail the stop loss to the
low of this day.
4. The stock still hasn't hit the trailing stop loss and the trade should be active.
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61% returns in 29 days, trade still running
TAJGVK - Weekly Chart
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1. The weekly chart of TAJ GVK Hotels shows a long 182-day base.
2. There is a clear contraction of volume within the base until the first week of 2024.
3. Notably, all the bigger volume bars are green, indicating that there is an urgency to buy the stock and a lack of urgency to sell.
TAJGVK - Daily Chart
1. The daily chart shows similar volume action as the weekly charts - a clear volume spike on green days and muted volumes on red days.
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2. The stock broke out 2nd January and 24th January - both were valid buy points for somebody who likes to buy lower within the base. My personal preference is to avoid such
entries in most instances.
3. The stock gave a valid entry for the third time on 1st February. This move was on 3.2x of the average volumes.
4. The day after the breakout, the stock moved strongly but squatted before closing. However, there was a cushion of 8% in just 1 day which allowed holding the stock through
earnings without much risk of capital loss. For conservative traders, the position can trimmed or a stop loss can be set under the day’s low.
5. A very positive reaction to earnings was seen on 5th February and the stock gained 8% in the day, standing at over 13.5% gains in just 2 days. The low of this day can also
be used as a point to trail the stop loss to.
6. There was some volatility over the next few days but the low of the 5th February candle was never breached and therefore there was no reason to close the trade. Finally on
13th February, the stock staged a recovery run on huge volumes and the low of this day became the new trailing stop loss.
7. After moving sideways for a few days, the stock moved higher with tennis-ball action on 20th February. This can be the new trailing stop loss.
8. The stock pulled back a little but has still not shown any weakness till date (3rd march). The pullback has been on significantly low volumes and this is a good sign so far.
Model Book - February 2024
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31% returns in 12 days, trade still running
AVG - Daily Chart
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1. AVG Logistics made a short base of 40 days. As opposed to most other winners in this model book, this is a shorter base and a continuation buy in a prior uptrend.
2. After reporting a rise in consolidated net profit, AVG opened with a gap of over 6% on 15th February. This move broke the pivot but such a big gap-up made the stock
unbuyable on the day. However, this move suggests that the stock is a good candidate to be put on a focus list.
3. Just 4 days later on 19th February, the stock broke its pivot on 4.7x larger than average volumes. This is the ideal entry point. Later in the day, the stock lost some of its gains
and closed below the ideal entry point.
4. After 1 day of sideways action, the stock moved 13% on 21st February. The low of this candle now becomes an ideal point to trail the stop loss to.
5. On 26th February, the stock showed tennis-ball action, rising 19% after a two-day halt. The break of this 2 day consolidation is an ideal pyramid point here and the low of
this day is an ideal place for the trailing stop-loss.
6. The stock again goes into a consolidation. If history is to be believed, an up-move can be seen from the break of this consolidation. This will once again be an ideal point to
pyramid your position and trail the stop loss.
Model Book - February 2024
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37% compounded returns in 19 days in 2 trades
ENIL - Weekly Chart
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1. The weekly chart shows and 90-day long base in Entertainment Networks.
2. There is also a clear volume spike in the positive weeks and a volume contraction in the negative weeks.
ENIL - Daily Chart
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1. Entertainment Networks is a continuation buy. There has already been a ~20% move from the initial breakout. Being a continuat ion buy, it is prudent to size smaller than
usual on the initial buy.
2. After an 8-day tight consolidation from 25th January to 2nd February, ENIL broke out on 5th February. This move was on 4.4x the average volumes.
3. Just 2 days later on 7th February, ENIL squats more than 8% on significantly higher than average volume. This price action is very similar to the trade in INOXINDIA
mentioned above, and a similar exit rationale is found here.
4. Once again similar to the INOXINDIA trade, ENIL stages a strong upmove post earnings on 14th February which triggers a re-entry around the 285 price point. An earlier
entry can also be made here and gradual position building is also an option.
5. The stock then consolidates for three days before staging a quick 10% move 20th February. This is an ideal pyramid point and also presents an ideal point to trail the stop
loss to.
6. ENIL is still looking good and similar to AVG Logistics above, an up-move can be seen from the break of this consolidation. This will once again be an ideal point to pyramid
your position and trail the stop loss.
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Thank you!
Please let me know if this was helpful.
Feel free to reach out if you have any suggestions / questions.
You can reach me on Twitter (X) DMs - https://twitter.com/tradelyfblog
Model Book - February 2024
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