One Cycle that Defines Everything in Markets

Oct 23, 2020

Apurva Sheth, Editor,Profit Hunter Pro

I've been writing about cycles over the last few months.

I've covered cycles across time frames and asset classes like the 8-year cycle in Sensex. It can even help you identify multibaggers.

You can watch the video.

Apart from this I have also written about the 32-month cycle in Auto index, the 22-month cycle in Metal index, and the hidden patterns in bitcoin as well as gold.

Despite writing so much on cycles over the last few months I'm guilty of missing the most important cycle of all.

This cycle defines everything in markets.

If you could master this cycle, then nothing can stop you from making huge profits.

--- Advertisement ---
iPhone Maker Targets EV Sector - What's in it for You?

The electric vehicles gold rush is REAL...

Just recently, Foxconn, who build Apple's products including iPhone, shocked the world by introducing 3 electric vehicle prototypes.

Yes, the massive opportunity in the EV sector is undeniable.

We have uncovered a hidden way to tap into the EV opportunity the right way so you could potentially stand to see life-changing gains in the long run.

And we're going to reveal all details about the EV opportunity in an online special event coming Monday.

Register for it asap using the link below.

YES, Book Me a FREE Spot
------------------------------

All publicly traded financial securities repeatedly go through this cycle without fail.

The Four Phases in a Cycle

I have illustrated below the four phases that a stock goes through during its life cycle. The cycle repeats itself after the stock goes through all these four stages.


Stage 1: Accumulation

This is the first stage in the cycle of the stock. The stock consolidates in a range after a prolonged downtrend. It finds buying interest near the lower end of this range.

Value investors who find the stock attractive enter when the general mood of the majority is still negative.

Stage 2: Uptrend

In the second stage, the market condition improves, and the negative sentiment begins to recede.

EV Stocks: A Hidden Way to Tap into the Massive 15x EV Opportunity

The stock starts trading above its most recent highs. It begins forming higher tops and higher bottoms. This attracts momentum investors into the stock.

Stage 3: Distribution

The strong uptrend in the previous stage attracts common public in the stock. At the same time, smart investors start reducing their positions gradually.

Every successive rally now becomes difficult to come. Falling volumes on rallies gives us an indication of the exhaustion of the trend.

Stage 4: Downtrend

Lack of a substantial upmove unnerves buyers. They become restless and exit the stock at negligible profit or at a loss.

--- Advertisement ---
iPhone Maker Targets EV Sector - What's in it for You?

The electric vehicles gold rush is REAL...

Just recently, Foxconn, who build Apple's products including iPhone, shocked the world by introducing 3 electric vehicle prototypes.

Yes, the massive opportunity in the EV sector is undeniable.

We have uncovered a hidden way to tap into the EV opportunity the right way so you could potentially stand to see life-changing gains in the long run.

And we're going to reveal all details about the EV opportunity in an online special event coming Monday.

Register for it asap using the link below.

YES, Book Me a FREE Spot
------------------------------

There are several who think on similar lines. They start selling their stock at lower prices. Falling prices attract short sellers who drive the prices further down at greater speed.

The stock eventually bottoms out and starts trading in a range giving birth to a fresh cycle. Stage 1 resumes once again.

So, this a trader's perspective of the most basic and important cycle in the markets based on price action. But that's not the only cycle that exists in the market.

A business also goes through a similar lifecycle. There are four phases in the business life cycle just like a stock: start-up, growth, maturity, and decline.


A stock's life cycle offers opportunity to make money to all types of investors in each phase.

You should take advantage of it.

Warm regards,


Apurva Sheth
Senior Research Analyst, Fast Profits Report
Equitymaster Agora Research Private Limited (Research Analyst)

PS: Tanushree was live at the Explosive Profits Summit yesterday. Watch it here...

Recent Articles

Why Tata Motors can be India's Tesla October 21, 2021
With a 70% market share can Tata Motors do a Tesla in India?
4 Reasons why India's Tesla Could be far More Profitable October 20, 2021
Why it is extremely speculative to bet on Tesla's long-term profits.
The First Among Equals in India's EV Ecosystem October 19, 2021
The real EV winners are unlikely to be the names you hear about in the media.
Tata Motors: Investor's Envy, Speculator's Pride October 18, 2021
Is the company's valuation of its EV business a fair one?

Equitymaster requests your view! Post a comment on "One Cycle that Defines Everything in Markets". Click here!