Free Report: The 2020 Smallcap Guide

The 5 Best Trading Opportunities I've Spotted

Sep 13, 2019

Apurva Sheth, Editor,Profit Hunter Pro

Last week I showed you 5 charts of automobile companies which are presenting the biggest opportunity in the market. The news flow in auto sector is very negative right now. But it pays to be greedy when everyone else is fearful.

Today I will show you 5 more charts which includes auto and auto ancillary companies. These stocks also present big opportunities in the market right now.

First, I'll give you the backdrop to this.

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Auto sector is going through a rough patch. There have been layoffs and production cuts in many auto companies. The demand for automobiles and two-wheelers is lackluster. Many automobile dealerships are shutting down as its becoming difficult to sustain.

Retail investors are not ready to touch an auto stock even with a ten-foot pole. But remember it's darkest just before dawn. I believe it's time to be greedy.

Here's why I believe auto stocks could generate massive gains over the next few months.

 

The BSE Auto index goes through greed and fear cycle every 32 months. I picked the major top of April 2006 as the end of greed phase in the sector.

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The sector trended downwards for 32 months until December 2008. I have drawn the next vertical line there. This line marks the end of fear phase and beginning of greed phase.

I have followed the same approach and drawn each vertical line at an interval of 32 months.

I have marked the greed phase in green and fear phase in red.

You will notice that the index was in fear phase since December 2016. It has lost 21% in this fear phase.

But the good news is that the fear phase ended in August 2019. The index will stay in the greed phase till December 2021.

This means that the worst of the fall might already be behind us. There's enough time left for a turnaround even if the index dragged lower for a couple of months.

But it's not just about the index. Stocks in the auto and auto ancillary space are also going through a similar cycle.

Today, I will share charts of 5 more stocks in our very own style 'more visuals, less words'. So here we go...

1. Bajaj Auto

 

2. Tata Motors

 

3. Bharat Forge

 

4. Bosch Ltd.

 

5. Exide Industries

 

Now here's a summary of the 10 auto and auto ancillary stocks. You can print this table and paste it across your workstation. Paste it at a place where you can see it easily and frequently.

These 10 stocks should be in your watchlist for the next 32 months.

Stock Name % Gains in Greed Phase of 2006 % Gains in Fear Phase of 2008 % Gains in Greed Phase of 2011 % Gains in Fear Phase of 2014 % Gains in Greed Phase of 2016 % Gains in Fear Phase of 2019
Ashok Leyland 290% -70% 231% 1% 270% -11%
Bajaj Auto NT -32% 705% 25% 46% 11%
Bharat Forge 470% -80% 242% 55% 126% -11%
Bosch Ltd. 434% -1% 133% 50% 111% -29%
Exide industries 215% 76% 229% -17% 65% 6%
Hero MotoCorp 259% -2% 173% 16% 49% -9%
M&M 530% -57% 438% 51% 17% 1%
Maruti 443% -44% 118% 76% 178% 16%
Tata Motors 328% -83% 379% 196% 19% -74%
TVS Motors 184% -86% 421% 84% 310% 10%
Average Returns 350% -38% 307% 54% 119% -9%
NT - Not Traded

Warm regards,

Apurva Sheth
Apurva Sheth
Editor and Research Analyst, Profit Hunter Pro

PS: Rahul Shah, Co-head of Research at Equitymaster, will show you how to potentially double your income in a reasonable period of time. Read more about Rahul's Automatic Income strategy.

PPS: In difficult market conditions like today, identifying profitable trades requires a proven trading strategy. This is exactly what I have developed for you. Read more about my trading strategy here...

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1 Responses to "The 5 Best Trading Opportunities I've Spotted"

Abubakar khan

Sep 17, 2019

I did not get your 5best trading stick yet pls send me the copy at earliest thanks

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