The chart always knows the news in advance

The Charts always know it all!!!

Today all the news channels and the news papers are carrying breaking news that the IRB MD has been cleared of all charges of the Pune – Mumbai express highway land acquisition case. Today the stock is trading at around the 254 levels.
Based on Technical Analysis, this stock had given a breakout on 7th May 2014 when the stock was trading at 124. The same had been advised on our website to our “Members”. Since then the stock has rallied over 100% in just over 3 months!!!

This clearly talks volumes of the conviction we have on “Technical Analysis” which time and again reiterates that the charts always know the news in advance.
So, the point is if all the stocks behave in such manner? No, of-course not. It’s only after the news is flashed that we come to know why we did get a price pattern breakout. This price pattern breakout happens only because of demand and supply which are the most important criteria for any price discovery. Breakouts are termed as breakouts since the clear winner stands out after a sustained war between the Bulls (Demand) and the Bears (supply). If one would have the art of spotting such winners the amount of money made is humongous. So, do all breakouts make money? Again the answer is no. Here we need to take help of simple maths and money management rules. We strongly advocate that money should be deployed on stocks which have a “Risk to Rewards” ratio above 1:3. The strike rate normally would be 50%, but then this simple math would do wonders, isn’t it?
Hence, following the Breakout stocks along with “Portfolio Management Rules”, the “Risk Management Rules” and the “Money Management Rules” is the ONLY key to success. Finally, always remember “Trend is your Friend”.

— Kiran Jadhav – CMD.
Precision Investment Services.
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