Is this the right time to buy stocks? Anupam Singhi of O’Neil Capital decodes
The ideal time to buy leading stocks — those with strong earnings, sales growth, and institutional sponsorship — is when they break out of a solid price base on heavy volume, with the market in a Confirmed Uptrend, says Anupam Singhi, CEO & Chief Investment Officer, O’Neil Capital Management India.
«Since most stocks tend to follow the market's broader trend, buying during a market correction means fighting a negative tide. It is more prudent to wait for the market to confirm a rally, ensuring you buy when success probabilities are at their peak,» he says. Edited excerpts from a chat:
How attractive does Nifty look after the recent correction? Are you cautious or bullish at this stage of the market?
Rather than attempting to predict market narratives, we focus on responding to market trends and monitoring evolving conditions. At any given time, there are reasons to be either cautious or optimistic, but we rely on well-defined rules. At O’Neil, we follow a structured approach to identify market trends. Currently, the Nifty’s recent low of 23,263 is considered a correction low. A Rally Attempt will be identified if the Nifty closes in the green or in the upper half of the day’s range and holds above this low for three consecutive sessions.
A Follow-Through Day—a gain of 1.5% or more on higher volume than the previous session—would then confirm a Confirmed Uptrend. Our studies show that P/E ratios alone are not decisive in stock selection. Many top-performing stocks had above-average P/E ratios before achieving
