Monday, October 19, 2015

My Exit Strategy in a Stock.


Hello Mahesh Ji, 

What strategy do you follow to exit from any share in case of loss. 
In case of profit also what is the right time to exit. With the Base Price and NRPS it is very helpful to buy the share. But it is not very clear when to exit even in your book their is nothing sure written about it when to exit. 
Thanks, 
Manish 
Registration ID - 14581 
1. Respected Manish ji Namaskar
 My exit strategy is very simple in case of profits it depend on 3 points
 ( New readers please read my book or read these basic terms of my theory for understand this article here are the link of my basic terms http://www.maheshkaushik.com/2015/06/how-to-read-my-research-reports-terms.html

  • The period of one year is over from my buying ( you may skip this point ) I wait one year because I need tax free long-term capital gains on my investment but if you want to pay flat 15 % income tax on your STT paid short term capital gain then you may book your profit earlier. 
  • I calculate NRPS again and if I found that CMP is cross this NRPS then I think this is the time to book profit for example recently my wife book profit on onmobile global which she buy one year ago @31.65 on basis of this article from me http://www.maheshkaushik.com/2014/09/onmobile-global-ltd-31.html  Now if you calculate NRPS then you find it 37.88 only so NRPS is down from 41.43 to 37.88 and CMP of onmobile global is 98.95 so why not she book her 212.63% tax free profit ? 
  • I again calculate base price, let us see above exaple again . Onmobile global base price on my recommendation date is 41.20 so she buy 20% below the base price @ 31.65 but when we calculate current base price then it is 48.93 So why not she book profit when share is traded near 100% up from base price 
Hope you understand my exit strategy in case of profit.

Exit Strategy in case of loss:-
1. Promoters holding is reducing more then 1 % for example see this Rei agro example
2. Year high/ low ratio is cross over 2  in down-trend means stock down more then 50 % from his year high then I immediate book loss and follow reverse trading theory which I describe in my book.

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