Buy these Stocks After the Union Budget

Jan 25, 2022

Brijesh Bhatia, Research analyst

The union budget is here and as always, it will bring great opportunities for traders in the market.

I'm sure you would like to take advantage of these opportunities to make fast profits.

Well as your editor, I've here to help.

I have used point and figure charts to develop a trading system which identifies the best budget stocks to trade tomorrow, post the budget.

In this video, I'll show you how I did it as well as the stocks that you should keep an eye on.

Watch the video and have a profitable budget day!

Hello viewers. Welcome to the Fast Profits Daily. Myself Brijesh Bhatia.

Well markets have been volatile ahead of union budget. Last week, we had Fed meeting. We had Ukraine issues, Russia-Ukraine issues. We had inflation, US inflation issues. We have dollar index moving about 97. We have US 10-year yield moving higher, and all sort of things are boiling up to the higher volatility.

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We have seen volatility has been increasing to around 30% in the CBOE VIX. Even if you look at the India VIX, it has been at the higher levels. And again, if you look at India VIX, we have union budget, which is scheduled tomorrow, and the volatility is probably likely to stay higher for more couple of days.

In this video, I'll be discussing what are the stocks where the set ups are very, very strong. You should look for buying opportunities post budget when the volatility settles down. So I have defined one of the systems where I filtered the stocks from Nifty 100 basket, midcaps, and smallcaps. So let's understand the setup that I'm talking about.

So this is basically I'm using point and figure chart and comparing relative strength index over here. The performance metrics I'll be using and I will be giving a score. So first I will be using the percentages 0.25% by 3 and 1% by 3, which are generally for short, medium term. 2% is slightly for medium term. 3% is for long term. I will be giving a score to each and every aspect on how I will be showing the tabe.

Scoring Method

Look at the scoring system over here. If you look at the left hand side of the chart, where the score is indicated as 2, it means that when the setup is breaking out and when the prices into the column of Xs, which is trending higher, the score is given as 2.

The score of 1 is given where the breakout has happened but the prices are in the column of O, which means there could be retracement happening, post the break out and that's the reason why I am giving the score of 1 over there.

So as to the short to medium term and long term parameters which I'm using, I will be using this scoring system, and each timeframe 0.25% will be given the score of 1 or 2. 1%, 2%, and 3% depending upon 1 and 2, it will be different.

So I have identified some of the best scoring where the scoring is between 7 and 8, with 8 being the highest because if you look at the 0.25 and the scoring of 2, the 1% score of 2, the 2% score of 2, and 3% score of 2, it sums up to 8 points.

So let's look at some of the stocks where you should keep an eye for the post union budget. So first let's look at the Nifty 100 basket.

Stocks setup from Nifty100

There are a few stocks, which are as per the scoring system gaining a strong momentum. So if you look at the Nifty 100 basket, ONGC leads the table with 8 scoring points. Bank of Baroda, Adani Green, Chola Financial, SBI, Bandhan Bank and Maruti. These are the few stocks which are indicating that the short to medium term and long term, the setup is a very, very strong and an 8 score which means that the short term, medium term, and long term, all the prices are in the X column.

The score of 7 here means that if you look at the 0.25 is given 1, which means that after a break out, it has been retracing. But the medium term and long term are still into the bullish scenarios.

Stocks setup from Midcap Stocks

Onto the midcaps. If you look at the midcap basket, the stocks which I have filtered down are Indian Hotel, Tata Power, Canara Bank, OIL, and AU Bank. These are the few stocks which has been filled out as per this scoring system and the parameters.

Stocks setup from SmallCap Stocks

From the smallcap basket there are stocks like TV18 Broadcast, Poonawalla, Sharda Cropchem, MMTC, DCM Shriram, IDFC, PFC, Power India, BDL, and Praj Industries. So you need to keep a watch on these stocks where the setups or the momentum is there and the volatility is slowing down. When there is a dip into the market, you can accumulate for a medium to long term perspective.

So this is again some of the stocks which are defined as per the system, though we are not indicating the target and stop loss. In case you can manage that and think the fundamentals of the companies are strong, the technical scoring system is giving an excellent opportunity. So you can look for such kind of setups post union budget.

Signing off Brijesh Bhatia.

Warm regards,

Brijesh Bhatia
Brijesh Bhatia
Research Analyst, Fast Profit Report
Equitymaster Agora Research Private Limited (Research Analyst)

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