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Stock Bottom Fishing Techniques are favorite among the investors. In this video, i will share a 7 points checklist that can help an investor to find the bottom of the stock. Recently, In my Live Streamings, i shared that the ITC and CIPLA have made their bottoms. These stocks gave a profit of around 20% to 25% in the last 10 trading sessions. I received a lot of queries on Stock Bottom Fishing Techniques.
1. Futures data in the derivatives: The short positions were created in ITC. The squaring off of the existing short positions indicates that the bottom of the stock is very near. Normally, fresh positions are created on reverse side i.e. long positions are created for next month’s expiry in the case of ITC
2. Volume is a very important criterion to find out whether the up move or down move will sustain or not. If the move is not supported by volume then it will not sustain.
3. Normally, a stock or index which shows a sharp move will consolidate and form the bottom. There was a sharp fall in the ITC, therefore, an accumulation stage signals that the Stock Bottom Fishing Techniques
4. The delivery %, traded value and the no of trades increase near the bottom of the stock. In the case of ITC, there was a significant buying by the big players near the bottom of the stock.
5. If the call writers start closing their positions then it means the bottom is very near. Also, an investor will observe fresh put writing simultaneously.
6. Maximum pain point can also confirm whether the stock has formed its bottom or not.
7. In case of a buying by the big players, you may observe that stock will list under the most active securities. Indirectly, it also implies that the big players are active in that particular stock.
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