How am I handling this Phase?

Good Morning,

I’m currently on vacation and travelling right now, so I thought I’d pen down my thoughts on how I’m handling this phase of the market.

As usual, I scan every day without fail. I constantly look for stocks that are within 20% of their one-year highs.

You may ask: since the broad market is weak, won’t many stocks fail this scan?

Here’s where the second filter comes in — I also look for stocks that are among the top monthly gainers. So I run two scans every day: one for relative strength and the other for monthly gainers.

Together, these two scans give me approximately 100 names every day, during the current market phase. In a healthy market this goes till 250.

From this list, most of my energy goes into finding “sister stocks” — especially for the maximum number of stocks passing through a particular industry. My aim is to spot the industries having maximum stocks because the money is flowing to that sector.

You could say that in the drowning Titanic climax scene, I’m looking for the beacon light of Rose and heading straight to her as a rescuer.

I am constantly watching for flash signals from the stronger stocks within the strong industry groups.

I do this exercise every single day.

Remember, my key focus is on the top 3–5 industry groups. I then hunt for the leaders in those groups and start with a test size of 5%. If the trade moves in my favour later, I add to the position — taking it up to 10% or even 15%.

The basic scans automatically guide me toward the top industry groups. Yes, I will definitely buy a bit late compared to someone who loves bottom-fishing, but my strength lies in position sizing.

I can make up for late buying by adding a bigger position size when the move confirms.

Knowing the strengths and weaknesses of your system is the key here. Not having a system at all is a much bigger problem.

Let me summarise it:

•  Industry groups / themes / sectors

•  Relative strength → strong industry groups

•  Focus on the top 3–5 industry groups

•  Hunt leaders with a small initial size (4–5%)

•  Try to add up to 15% on the next pullback / confirmation

I have a platform where I teach in depth about my risk management techniques (which have once again protected me from a major drawdown), right stock selection, entry, exit, and position sizing. We meet live every week to handle queries, and we also have a dedicated Telegram group where I share my insights.

Do check it out: www.chartitude.com

Thanks!