Swing Trading Portfolio Remains Resolute Despite Muted 2018

An honest post analysis is very vital for investment success. We had a muffled 2018 where major indices such as the Nifty (3.15%), the Sensex (5.91%), Nifty Midcap (-15.42%), and Nifty Smallcap (-29.08%) gave modest returns. We outperformed the key indices as our Swing Trading portfolio generated a return of 40.72%.

Markets were weighed down by volatility in 2018 and we used short-term trends to our advantage. We learned that in an uncertain environment where macroeconomic conditions are not conducive to a bull market, it is important to not waste time in identifying multibagger stocks; rather, accumulating small gains could also help you in beating the market.

Below is the list of our best additions and removals in 2018.

Best Additions

Add Date Remove Date Symbol Stock Name Entry Price Exit Price % Change
8/23/2018 8/24/2018 BBTC Bombay Burmah Trdg Corp 1749 1951 11.55
8/7/2018 8/10/2018 GOACARBON Goa Carbon Limited 665 738.37 11.03
10/26/2018 10/30/2018 STRTECH Sterlite Technologies Ltd 336.4 369 9.69
10/30/2018 11/2/2018 VIPIND Vip Industries 437 470 7.55
11/16/2018 11/28/2018 DABUR Dabur India 391 417.25 6.71
10/30/2018 11/09/2018 DIVISLAB Divis Laboratories 1453 1550 6.68
11/16/2018 12/4/2018 BAJFINANCE Bajaj Finance 2400 2540 5.83
10/16/2018 10/17/2018 NSE:VMART V-Mart Retail Ltd 2040 2155 5.64
11/26/2018 12/6/2018 HINDUNILVR Hindustan Unilever 1,740.00 1828 5.06
8/28/2018 9/5/2018 BHARATRAS Bharat Rasayan 7225 7621 5.48
04/10/2018 4/18/2018 SUDARSCHEM Sudarshan Chemicals Ind 497 610 22.74
04/05/2018 04/17/2018 Escorts Escorts 887.9 993 11.84
6/7/2018 6/12/2018 QUESS Quess corp 1138 1264 11.07
8/7/2018 8/10/2018 GOACARBON Goa Carbon Limited 665 738.37 11.03
04/10/2018 4/12/2018 TATASPONGE Tata Sponge Iron 1034 1141 10.35
23/02/2018 26/02/2018 VENKEYS Venky’s India 3067 3377 10.11

Bombay Burmah Trading Corporation Ltd

The stock was added on August 23 as it showed strong accumulation for the past few trading sessions as evidenced by its strong price action volume. We bagged ~12% in two days and removed it on the second day as the stock came under some profit booking. It corrected ~40% after removal.

Goa Carbon Ltd

The stock was added because of its strong price momentum and its strong bearish trend reversal; the reversal was confirmed once it bounced back from its 50-DMA. We gained ~11% in three trading sessions, after which we removed it at its 200-DMA resistance. The stock fell ~36% after our removal.

Sterlite Technologies Ltd

The stock was added after it reclaimed its 50-DMA; post addition, we made ~10% in three trading sessions. We removed the stock on October 30 once the short-term rally was over. It fell 23% after our removal.

Vip Industries

The stock was added after it reclaimed its 200-DMA on above average volume. It surged 7.55% post our addition. We removed the stock as its price strength started looking weak. It fell 18% post removal.

Dabur India

The stock was added on its 200-DMA retake. We held the stock for a week as it retook its 50-DMA as well, but removed it on November 28 as the stock triggered stop loss and showed downside reversal thereafter.

Divis Laboratories

The stock was added on its strong 50-DMA retake and we removed it after nine days. After the removal, the stock has corrected 7%.

Bajaj Finance

The stock was added on its 50-DMA retake and we gained ~6% in approximately two weeks. We removed the stock on December 4 when we observed that the stock lost its winning momentum. Later, the stock corrected 8% after our removal.

V-Mart Retail Ltd

The stock was added on October 16 when it showed a trend reversal. However, we removed the stock the next day, adopting a conservative approach thus booking a gain of ~6%.

Hindustan Unilever

We added the stock when it bounced back from its 5-EMA with above average volume and booked 5.06%. We removed the stock on December 6 when the it became volatile.

Bharat Rasayan

We added the stock when it bounced back from its 5-EMA on above average volume. We removed the stock once it started losing its price strength felt that it had lost its strength in terms of price and volume. It corrected ~25% after our removal.

Sudarshan Chemicals Ind

The stock was added when it bounced back from its pivot price on above average volume and we successfully booked profits of 22.74% in a week. The stock  corrected 37% after our removal.

Escorts

The stock was added when it started its upward move from its 5-EMA mark on above average volume. We removed the stock when it lost its momentum. Later, the stock corrected by 45%.

Quess Corp

The stock was added when it bounced back from its 50-DMA on above average volume and we removed it when it was at its peak. Later, the stock corrected 54%.

Goa Carbon Ltd

The stock was added when it bounced back from its 50-DMA with above average volume and we removed it when it was facing resistance at its 200-DMA. Within three trading sessions, we were able to make a gain of ~11%.

Tata Sponge Iron

The stock was added after it breached its 50-DMA and within two trading sessions, we are able to make a gain of ~11%. Later, the stock corrected ~36%.

Venky’s India

The stock was added when it broke out of its 12 week long flat-base consolidation. Within three days, we were able to gain 10.11% profit. After our removal, the stock corrected ~47%.

Best Removals

Add Date Exit Date Symbol Stock Name Add Price Exit Price Change After Removal
8/20/2018 8/23/2018 YESBANK Yes Bank 401 390 -52.74%
10/10/2018 10/11/2018 BEPL Bhansali Engr.Polymers 135 129 -31.16%
8/23/2018 8/24/2018 BBTC Bombay Burmah Trdg Corp 1749 1951.7 -33.54%
8/21/2018 8/23/2018 ESCORTS Escorts Limited 901 895 -19.30%
8/28/2018 9/5/2018 BHARATRAS Bharat Rasayan 7225 7621 -30.25%
8/28/2018 9/4/2018 PEL Piramal Enterprises Ltd. 3,132.60 2,971 -22.92%
8/31/2018 9/3/2018 VGUARD V-Guard Industries Ltd. 226 218 -0.05%
8/29/2018 9/4/2018 M&MFIN Mahindra & Mahindra fin 485.3 476 -3.90%
9/21/2018 9/26/2018 BIOCON Biocon Ltd 684 714.95 -14.40%

Yes Bank

We added the stock as it bounced from its 20-EMA on above average volume, but it made a climax top the very next day and triggered the stop loss. The stock gradually fell and breached its 50- and 200-DMA. The stock corrected more than 17% after our removal.

Bhansali Engr.Polymers:-

We added the stock intraday once it crossed its 50-DMA on higher volume. However, the stock could not close above its 50-DMA and as a result, it triggered stop loss the next day. After the removal, the stock went down and moved to into a correction. The stock corrected more than 30% after our removal.

Bombay Burmah Trading Corporation Ltd

The stock broke out of a consolidation base pattern and gave us the expected return intraday. We booked  profits in the scrip the moment we observed profit booking. The stock corrected more than 30% after our removal.

Escorts Ltd

We added the stock after it bounced from its 50-DMA on above average volume.Post addition the stock failed to move up and hit our stop loss and we removed the stock from our portfolio, consequently the market moved into correction in the month of September and the stock corrected ~18% hence forth.

Bharat Rasayan

The stock showed a trend reversal after earnings and we took the position once the stock bounced back from its 20-EMA on above average volume. Later, we booked profits in the scrip as it showed signs of technical weakness. The stock corrected more than 25% after our removal.

Piramal Enterprises Ltd

We added the stock after it bounced from its 20-EMA on above average volume; however, it made a climax top the next day but closed in the lower half. We removed the stock that day in a loss. After our removal it further broke its 50- and 200-DMA and went into a correction, falling more than 30% after our removal.

V-Guard Industries Ltd

The stock posted strong top-line and bottom-line earnings and also bounced from its 200-DMA but closed marginally below that level however due to heavy sell off the market moved to a correction and the stock triggered our stop loss and slipped more than 30% post our removal.

Mahindra & Mahindra Fin

The stock bounced from its 50-DMA, but due to the NBFC crisis, it pulled below its 50- and 200-DMA as a result of which we removed it from our portfolio. It corrected more than 15% after our removal.

Biocon Ltd

The stock gave us good returns even when the market was in a correction. It fell drastically once we removed it due to technical weakness. The stock corrected more than 15% after our removal.

In 2019, markets are expected to remain volatile, mainly due to global weakness as well as the general election in India. It is highly advisable to follow the stop-loss rule to prevent capital erosion. In trading, following the Nifty’s resistance and support level is the key. In a volatile market, swing trading strategies could help one in generating an alpha, provided traders are disciplined and don’t succumb to biases.

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