Hi NT,
It seems Goenka Diamond has come under the Ketan Parekh scam scanner and has touched the 20% lower circuit. What does your Trading System say regarding this issue ? Will it go down further tomorrow ?
Thnx n BR
SA
Hi Sanju. Yes, that was the adverse news I was referring to. Today the stock has bounced back on good volumes. Yesterday (when you asked me this question on whether the stock will go down further today) my opinion was yes. It did go down to a low of 145 in the morning and then went up. Point is its impossible to predict stock price when such kind of news breaks out. It could very well have hit 20% LC for the next few days.
Now we probably need to see if the stock consolidates and stabilizes a bit. Right now its too volatile to trade. When you enter you need to be confident that the stock will go in the direction you enter. It may not but that initial confidence at entry has to be there. I dont have confidence in this stock at the moment that it will go up. So I will wait till the opportunity is right with this one or look for alternatives which are better and dont have the newsflow overhang. We are not making extra money by trading Goenka, right?
Basically, the stock should be begging you "buy me please, I am going up" rather than you begging the stock "I have bought you. Please go up". Once you understand this and develop the patience and mental resolve needed to put this into practice, your trading results will improve dramatically. There are so many good stocks out there that we dont need to be worried about 1 particular stock. Too many times people are married to a stock for some emotional reason and want to make money by only buying that particular stock. Thats a recipe for disaster over the long term.