This week's newsletter, I want to start by talking about one of the essential pillars of succeeding in the stock market and it has very less to do anything with the technical analysis but more with the human psychology. When I stepped into the field of capital markets I saw many people boasting about their foolproof strategies, how they have grown their account by executing a 95% accurate strategy. Many people with less experience in life or more affinity towards greed get lured by such statements and enter in the stock market with the get rich-quick dream to later find out the reality. Because they are only focused on the good side of the stock market but fail to take into account the bad side of this beast. I won't say it is a bad side, rather it is our mindset which works in favor or against but not the stock market. Stock market has been working in cycles from last 400+ years since it was first started operating in 1602. You can read more about it here. So, when we acknowledge the fact that we can not make money in every trade or investment then we plan for the contingency, the events that we can not comprehend. That's where the risk management comes into picture.
Below are some of the trades from 2024 where I booked a small loss and got out before the disaster. Tata Consumer Product Ltd., Aditya Birla Capital Ltd., Adani Green Energy Ltd., Amara Raja Mobility Ltd., Bharat Dynamics Ltd. fell badly after the exit ranging from -26% to -54%. My view is from the trading standpoint but I am sure investors do also employ some sort of risk management framework for their investment. Is this the only way to manage risk? No. There are other ways as well, placing a logical stop loss is one of them. But having a risk management plan is necessary and it will help you make positive return on your portfolio.





Fig:5 Bharat Dynamic Ltd. dived by -48% from the exit price
Indian stock market
NIFTY 500 is still below 20/50/200 day moving averages. Not many stocks are doing well. Very few stocks go up on one day but don't see the follow through buying the next day. It's a very difficult environment for swing and positional traders to make money on the long side. Hence, we are still maintaining our cautious stance on the current market scenario.

Interesting charts to watchout Patanjali Foods Ltd. creating an ascending triangle pattern. The stock looks bullish above 1867 which is the high of 13 Jan - 17 Jan week. Week's low i.e. 1750 should be the level where the risk management plan should kick-in.

Fig:7 Ascending triangle pattern in Patanjali Foods Ltd.
The next one is Vishal Mega Mart Ltd. IPOed on 18 Dec 2024, the stock is moving on the upside by creating the higher low. The stock looks bullish above 110, 105 should be level where risk management plan should kick-in. Such young stocks lift off aggressively even in bear markets.

Fig:8 Price holding up at higher level
Stocks with strong catalysts
Mazagon Dock Shipbuilders Ltd.
The Ministry of Defense (MoD) on December 30 said it has signed two contracts worth approximately ₹2,867 crore to enhance the operational capabilities of Indian submarines.
The first contract, valued at ₹1,990 crore, was inked with Mazagon Dock Shipbuilders Ltd (MDL), Mumbai, for the construction of an air independent propulsion (AIP) plug based on technology developed by the Defense Research and Development Organization (DRDO).
The second contract, worth ₹877 crore, was signed with Naval Group, France, for integrating an electronic heavy weight torpedo (EHWT) system, developed in collaboration with DRDO, into Kalvari class submarines. Mazagon Dock's order book position remains strong at ₹39,872 crore at the end of the quarter.

Bharat Dynamics Ltd.
Bharat Dynamics Ltd.(BDL) has bagged an order worth ₹2,960 crore for medium range surface-to-air missiles (MRSAM) from the Ministry of Defense.

Fig:10 MOD notified about the deal with BDL on X

Fig:11 BDL QoQ EPS growth saw the increase by 1570% in Sep 2024 earnings
As of September 30, Bharat Dynamics had a total order book of ₹18,852 crore, while the order pipeline for the next two to three years stands at ₹20,000 crore. Aeroflex Industries Ltd.
The price and volume reacted strongly on the earnings release hence it is worth keeping on the priority watchlist to watchout for a low risk, high reward opportunity in coming days when the overall market environment improves.

US stock market Dow Jones Industrial Average Index showed signs of reversal. US market seems to be reacting positively as they are approaching the Jan 20, the day Trump will take charge of the US President office.


US stocks marched higher on Tuesday amid renewed optimism over the potential for a trade deal between the US and China. Technology, financial and health care stocks powered much of the rally in S&P 500 index . The wave of buying also drove a 334-point gain for the Dow Jones Industrial Average. Both nations are trying to reach a deal before March 1. That’s when additional tariffs will kick in, escalating the conflict and further hurting companies and consumers with higher prices on materials and products.
On-point analysis posted in Discord community At the beginning of last week we analyzed some of the stocks based on their technical and fundamental parameters and posted in our Discord community, here are some of the stocks which gave the positive feedback from the US stock market showing the improving sentiment as Donald Trump becomes the 47th President of United States. Learn more about our Discord community.




This brings us to the closure of this week's newsletter. I hope you enjoyed reading it as much as I enjoyed writing it. To continue receiving it you can become the part of Eight Figr League and know the pulse of Indian and US stock markets, get daily updates, learn fundamental and technical analysis, connect with me over video call.
You can also connect with me over LinkedIn and X(Twitter). You can also watch me speaking on YouTube about trading, investing and mindset. I'm a student for life, so don't hesitate to send over your views or sources to help me enlighten myself.  If you are a beginner and want to learn how I do what I do. The below series of blogs will help, to be read in chronological order:
Thank you for your time. Have a great week ahead in creating sustainable wealth!
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