The Sensex is about to reach 30k. Is it risky to invest now? stocks to buy.
Is it risky to invest in the Index Futures? Yes.
Is it risky to invest in Index stocks? No.
Is it risky to invest in Nifty Mid 100 and Nifty SML 100? Yes.
Is it risky to invest in individual stocks in Mid cap and Small cap? No.
Sensex in near 30k and Nifty is above 9k for a reason.
The reason is the clear road map ahead for the Indian Economy, Good monsoon prediction, Weak crude oil prices and visible trend in the global commodity prices.
The government is really striving to punish unorganized sectors and black market. All the listed companies are very well organized and are gaining from this move.
Sectors can be easily picked to invest these days.
Strong Global commodity prices: Buy Metals and sell tyres.
Weak Global Commodity Prices: Buy Tyres and Sell Metals.
Real Estate, Housing, Hotels, Infrastructure, EPC construction, Construction material, Cement, Plastics, Chemicals, Agriculture, Agriculture chemicals, power, Oil Marketing, textiles, logistics, FMGC, and Finance related to the listed sectors, etc are all on the bull run due to good government policies.
How to pick Stocks to pick within a sector?
- Market Cap > 200 crores and good trade volumes.
- Stock trading near 52 week high (5–10% from highs).
- 30 days moving average > 50 days > 150days > 200 days. and stock should not be far away from its 30 day moving average. (max. 10%)
Check P/E ratio (yearly) , Price to Book, Debt to equity, Profits and Interest paid, Return on Equity, Return on capital employed, cash flows, EV/EBITDA, Quarterly and Yearly results for increase in sale and profits (QoQ and YoY).
Once you are satisfied with these parameters. Then compare fundamentals between stocks in the same sector and choose 4–5 top stocks in the sector.
Now compare stock returns in last 30 days, 3 months, 6 months, 1 year and 5 years.
Some stocks would have given a strong breakout and some stocks might be strong technically to move up and give a strong breakout. Just buy stocks that are technically breaking out of moving range and stocks that have been consolidating for quite a while.
Some examples of such stock picks are:
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