MULTIBAGGER

STOCKS
Zafar Shaikh
Founder & CEO INVESYS
 Hello!
I am Zafar Shaikh
▪ BE (MECHANICAL)

▪ PROFESSIONAL TRADER & INVESTOR

(15 YRS EXPERIENCE)

▪ FOUNDER & CEO - INVESYS

Zafar Shaikh
MULTIBAGGER STOCKS
CAGR ( COMPOUNDED ANNUAL GROWTH RATE )

• CAGR is most important factor in wealth creation

• Higher the CAGR faster the wealth creation

• CAGR depends on:

• Price Appreciation
• Time

• Reasonable CAGR for wealth creation?

MULTIBAGGER STOCKS
RICHEST INVESTORS

Approx.CAGR 22% Approx.CAGR 40%

MULTIBAGGER STOCKS

HOW TO ACHIEVE HIGH CAGR?

FOUR CRITICAL DECISIONS

• Buy Right Stock – Stock in Uptrend

• Buy at Right Time - Beginning of New Trend

• Abort Non Performing Stocks – Save Capital & Time

• Exit at Right Time – Rotate Capital to New Trends

MULTIBAGGER STOCKS
BUYING THE RIGHT STOCK – UNDERSTAND THE TREND

TATA STEEL JUST DIAL

31/3/2015-Rs 316 31/3/2015-Rs.1323
31/12/2017-Rs 698 31/12/2017-Rs. 522
RETURN +120% RETURN -61%
MULTIBAGGER STOCKS
BUYING AT THE RIGHT TIME

SESHA PAPER SESHA PAPER

31/1/2011-Rs.227 31/3/2016-Rs.227
25/10/2017-Rs.770 25/10/2017-Rs.770
CAGR +20% CAGR +118%

BUY HERE
BUY HERE
MULTIBAGGER STOCKS
DUMPING THE STOCK WHICH DOESN’T PERFORM AS PER EXPECTATION

ANILLIMITED ANILLIMITED
31/12/2015-Rs.314 31/12/2015-Rs.314
31/08/2016-Rs.232 25/10/2017-Rs.29
RETURN -26% RETURN -90%
TIME SAVED 14 MTHS TIME LOST ????

SELL HERE
STILL HOLDING?
MULTIBAGGER STOCKS
BOOKING PROFIT EFFICIENTLY AT RIGHT TIME

LUPIN
LUPIN
29/05/2009-Rs.156
29/05/2009-Rs.156
29/01/2016-Rs.1710
31/12/2017-Rs. 885
EXIT 2 -CAGR +43%
CAGR +22%

LUPIN
29/05/2009-Rs.156
31/08/2010-Rs.356
EXIT 1 -CAGR +93%
STILL HOLDING?
MULTIBAGGER STOCKS
THE BULL & THE BEAR – BENNER CYCLES

LUPIN
LUPIN
29/05/2009-Rs.156
29/05/2009-Rs.156
29/01/2016-Rs.1710
25/10/2017-Rs.1026
EXIT 2 -CAGR +43%
CAGR +25%

LUPIN
29/05/2009-Rs.156
31/08/2010-Rs.356
EXIT 1 -CAGR +93%
STILL HOLDING?

BULL MARKETS TOPS – 8 TO 10 YRS

BEAR MARKET BOTTOM – 8 TO 10 YRS

MULTIBAGGER STOCKS
THE BULL & THE BEAR – BENNER CYCLES
2018 ??
2008
LUPIN MAJOR TOP
LUPIN
29/05/2009-Rs.156
29/05/2009-Rs.156
29/01/2016-Rs.1710
25/10/2017-Rs.1026
EXIT 2 -CAGR +43%
2000 CAGR +25%
2009
1992

2001 MAJOR BOTTOM

LUPIN1993
29/05/2009-Rs.156
31/08/2010-Rs.356
EXIT 1 -CAGR +93%
STILL HOLDING?
RSI AVERGAE BELOW “50”
STARTING POINT FOR PRIMARY BULL MARKET
MULTIBAGGER STOCKS
MULTIBAGGER TREND TYPES
HDFC BANK TATA MOTORS

LUPIN
LUPIN
29/05/2009-Rs.156
29/05/2009-Rs.156
29/01/2016-Rs.1710
25/10/2017-Rs.1026
CAGR +43%
CAGR +25%

PERPETUAL CYCLICAL

LUPIN SAIL
HDFC BANK
29/05/2009-Rs.156
31/08/2010-Rs.356
CAGR +93%
STILL HOLDING?
MULTIBAGGER STOCKS
SOME STATS

 ANALYSIS OF BSE STOCKS WITH HIGH LIQUIDITY – 1745 STOCKS

 STOCKS GIVEN MORE THAN 500% RETURN SINCE 2008 – 441

 STOCKS MEETING SET-UP CONDITION (RSI AVERAGE < 50) – 397 (90%)

 AVERAGE RETURNS – 1554%

 AVERAGE RETURNS (EXCLUDING TOP 10) – 1192%

 AVERAGE HOLDING ( ENTRY POINT TO PEAK) – 16.6 QUARTERS

 STANDARD DEVIATION OF HOLDING PERIOD – 8.1 QUARTERS

MULTIBAGGER STOCKS
HOW TO IDENTIFY MULTIBAGGER STOCKS AT RIGHT TIME?

Two Approaches

• Fundamental Analysis

• Technical Analysis
MULTIBAGGER STOCKS
FUNDAMENTAL ANALYSIS

• FINANCIALS – Balance Sheet, Profit Loss , Cash Flow

• Price projections using Future Sales & Profit

• Advantages – Accurate Financial Picture, Easy for Stock

Valuation, Can Project future financial trends

• Disadvantages – Difficult for Layman, Time Consuming, No

Guarantee of price rise, Not useful for identifying Trend,
Entry timing OR Exit, Future financial may deteriorate
MULTIBAGGER STOCKS
TECHNICAL ANALYSIS

• CHARTS– Price Trends, Patterns ,Indicators,

• Price projections using charts & trends

• Advantages – Leading Indicator, Easy to understand, Takes

Less Time, All Trading Action captured in price, Easy to
project price trends, Good for timing

• Disadvantages – No connection with fundamental, Difficult

for valuation, Can lead to choosing financially weak stocks
MULTIBAGGER STOCKS
THE SOLUTION?

• Our Unique Approach

• Techno Fundamental Analysis
• Combine Technical & Fundamental Analysis

• Two Step Process

• Select stocks based on chart
• Perform Fundamental Analysis on selected
stocks
MULTIBAGGER STOCKS
TECHNO FUNDAMENTAL ANALYSIS - THE PROCESS

• ENTRY SET-UP

• FINANCIAL HEALTH CHECK – FUNDAMENTAL ANALYSIS

• ENTRY CONFIRMATION

• LOW RISK ENTRY

• INITIAL & TRAILING STOP LOSS

• PROFIT BOOKING
MULTIBAGGER STOCKS
CHART SET-UP FOR STOCK SELECTION

ENTRY SET UP - QUARTERLY CHARTS

• STOCK IS IN DOWNTREND OR SIDEWAYS TREND FOR LAST 5-10 YEARS.

• RSI AVERGAE DIPS BELOW 50.

• FROM LOWEST POINT OF LAST 5 YEARS, PRICE STARTS TO RISE AND

CREATES PRICE PIVOT

.
 MULTIBAGGER STOCKS
STOCKS SELECTION FOR MULTIBAGGER

DOWNTREND FOR LAST 5 YEARS

PRICE PIVOT

STOCK RISES FROM BOTTOM AND

FACES RESISTANCE CREATING PRICE PIVOT

TRIX BELOW“0”- CORRECTION COMPLETE

RSI AVERAGE BELOW 50

MULTIBAGGER STOCKS
QUALITATIVE ANALYSIS OF ENTRY SET-UP

• STOCK IS NOT HITTING ALL TIME LOWS

• RSI AVERGAE DOES NOT FALL BELOW 40

• DROP IN PRICE FROM TOP , THOUGH SUBSTANTIAL , IS NOT VERTICAL

• PRICE IS CONSOLIDATING, RATHER THAN FALLING

.
MULTIBAGGER STOCKS
QUALITATIVE ANALYSIS OF ENTRY SET-UP
GOA CARBON GITANJALI

LUPIN
LUPIN
29/05/2009-Rs.156
29/05/2009-Rs.156
29/01/2016-Rs.1710
25/10/2017-Rs.1026
CAGR +43%
CAGR +25%

LUPIN JP ASSOCIATE
HEG
29/05/2009-Rs.156
31/08/2010-Rs.356
CAGR +93%
STILL HOLDING?
MULTIBAGGER STOCKS
FUNDAMENTAL ANALYSIS

• FUNDAMENTALS ARE LAGGING / FOLLOW PRICE

• CONNECTED INVESTORS BUY BEFORE BIG QUARTERLY RESULTS

• BIG INVESTORS BUYING CAN BE IDENTIFIED BY QUALITATIVE ANALYSIS OF

PRICE PATTERN

• BEST QUARTERLY RESULTS HAPPEN AFTER SUBSTANTIAL PRICE MOVEMENT

• WAITING FOR GOOD QUARTERLY RESULTS CAN CAUSE OPPORTUNITY LOSS

• ONLY BASIC HEALTH CHECK OF STOCK IS SUFFICIENT

• MARKET REWARDS STABILITY AND GROWTH IN EARNINGS

 MULTIBAGGER STOCKS
FUNDAMENTAL ANALYSIS – KEY POINTS

• EARNINGS GROWTH – MOST IMPORTANT PARAMETER

• SALES TO MARKET CAP > 1

• PE RATIO BETWEEN 5 TO 15

• OPERATING MARGINS > 5%

• DEBT TO EQUITY < 1.5

• DEBT SERVICE RATIO > 2

• PRICE TO BOOK < 2

• POSITIVE OPERATING CASH FLOW

MULTIBAGGER STOCKS
ENTRY PIVOT –MONTHLY CHART

PRICE RISES FROM LOWEST POINT OF LAST 5 YRS

FACES RESISTANCE AT CERTAIN PRICE LEVEL.

CURRENT CANDLE LOW IS BELOW PREVIOUS CANDLE LOW.

THE HIGHEST PRICE IN ENTRY PIVOT FORMATION IS TREND

BREAKOUT POINT.

IN NEXT FEW CANDLES, IF PRICE HIGH CROSSES TREND BREAKOUT

POINT AND PRICE CLOSE IS ABOVE RESISTANCE, THEN ENTRY IS
CONFIRMED.
MULTIBAGGER STOCKS
ENTRY PIVOT

1) PRICE RISE AND

RESISTANCE
3) PRICE PIVOT BREAKOUT

PRICE PIVOT

2) CANDLE LOW BELOW

PREVIOUS LOW
MULTIBAGGER STOCKS
TARGET

TARGET FOR MULTIBAGGER STOCKS ARE CALCULATED BASED ON

FIBONACCI PROJECTIONS.

HOWEVER, TARGET BASED ON LINEAR PROJECTIONS ARE TOO

SMALL.

HENCE USE TARGET BASED ON LOG PROJECTIONS.

IMPORTANT FIBONACCI EXTENTIONS : 162% , 200% , 262%, 424%

TO CALCULATE TARGET, NOT HIGH AND LOW POINT OF LAST 5

YEARS AND APPLY LOG PROJECTIONS.
MULTIBAGGER STOCKS
TARGET

3) TARGET 1 – RS 400
ACTUAL HIGH - 500

1) RECORD HIGH OF
LAST 5 YEARS

2) RECORD LOW POINT OF

LAST 5 YEARS
MULTIBAGGER STOCKS
INITIAL STOP LOSS

DURING CORRECTION, PRICE FINDS SUPPORT AT 10 SMA LOW.

ATR (AVERAGE TRUE RANGE) INDICATOR CAPTURES NORMAL PRICE

RANGE OF CANDLE.

AS A MEASURE OF SAFETY, KEEP INITIAL STOP LOSS AT A PRICE OF 1 ATR

BELOW SUPPORT LINE OF 10 SMA LOW.

YOU CAN CALCULATE STOP LOSS VALUE BY SUBTRACTING ATR VALUE

FROM VALUE OF LOWER LINE OF 10 SMA CHANNEL.

INTIAL STOP LOSS RISK BASED ON THIS STRATEGY IS 30%.

HOWEVER, THIS STOP LOSS IS VERY RARELY TRIGGERED. HENCE, NO NEED

TO WORRY ABOUT BIG STOP LOSS.
 MULTIBAGGER STOCKS
INITIAL STOP LOSS

RIDE THE TREND USING

1) ENTRY POINT THIS
STOPLOSS LINE

INTIAL STOP LOSS – 1 ATR

BELOW LOWER LINE
MULTIBAGGER STOCKS
TRAILING STOP LOSS

AS TRADE MOVES IN TO PROFIT, KEEP RAISING STOP LOSS.

WHEN TRADE STARTS TO MOVE IN PROFIT, SLOPE OF 10 SMA LOW ALSO

BECOMES POSITIVE AND IT STARTS RISING.

FOR TRAILING STOP LOSS, IN BEGINING PHASE, FOLLOW THE SAME

STRATEGY OF KEEPING STOP LOSS 1 ATR BELOW LOWER SUPPORT LINE.

DURING THIS PHASE, IF PRICE LOW TOCHES LOWER SUPPORT LINE, YOU
CAN TIGHTEN STOP LOSS TO CANDLE LOW AFTER CANDLE IS COMPLETED.
MULTIBAGGER STOCKS
TRAILING STOP LOSS

TIGHTEN STOPLOSS TO
TOUCHPOINT LOWS OF
LOWER CHANNEL LINE

LOOSE STOP LOSS – 1 ATR

BELOW LOWER LINE
MULTIBAGGER STOCKS
PROFIT BOOKING
LET YOUR PROFITS RUN AND BOOK PROFIT ONLY WHEN TREND MATURES.

PREMATURE PROFIT BOOKING IS REASON CREATING WEALTH THROUGH

STOCKS.

THERE IS NO PERFECT INDICATOR TO IDENTIFY EXIT NEAR THE TOP.

WE RELY ON COMBINATION OF 2 EXIT STRATEGIES FOR PROFIT BOOKING.

1 ) AFTER RSI AVERAGE BECOMES OVERBOUGHT AND RSI CROSSES BELOW RSI
AVERAGE, TAKE SL BELOW PREVIOUS CANDLE LOW FOR 50% OF THE POSITION.

SOME TRENDS MATURE AT THIS EXIT SIGNAL AND DO NOT CREATE NEW HIGH
FOR NEXT 3-5 YEARS.

B) FOR REMAINING 50% POSITION, KEEP FOLLOWING LOWER LINE OF 10 SMA

LOWAS STOP LOSS AND EXIT POSITION AFTER PRICE CLOSES BELOW THIS LINE.

THIS STRATEGY WILL ENSURE THAT YOU REMAIN INVESTED IN THOSE STOCKS
WHICH KEEP RISING FOR 10 YEARS OR MORE.
MULTIBAGGER STOCKS
PROFIT BOOKING

EXIT 1

2) BOOK
50% PROFIT

1) RSI OVERBOUGHT
AND RSI CUTS BELOW
AVERAGE
MULTIBAGGER STOCKS
PROFIT BOOKING

EXIT 1

2) BOOK
50% PROFIT

1) RSI OVERBOUGHT
AND RSI CUTS BELOW
AVERAGE
MULTIBAGGER STOCKS
PROFIT BOOKING

EXIT 2

2) BOOK
1) RSI OVERBOUGHT REMAINING
AND PRICE CLOSE 50% PROFIT
BELOW LOWER
CHANNEL LINE
THANKS!
Any questions?
You can find us at :

[email protected]
7028159879
9284885218
WWW.INVESYS.IN