3 stages of a stock

Unlike a girl in her twenties who goes through hundreds of different moods in a day, a stock goes through only three moods in its entire lifetime:

• 🟢 Bullish Phase – It’s rising, attracting attention, and everyone-wants-it stage

• 🔴 Bearish Phase – It's falling, nobody wants to talk about it, and suddenly all the YouTube videos recommending it are gone.

• ⚪ Sideways Phase – It’s doing nothing. Neither rising nor falling.

Every stock, across all markets big or small, Indian or international dances between these three phases. Some do it quickly. Some take their sweet time. But no stock can permanently stay in one phase. Eventually, it moves on.

You lose capital in bearish phases.
You lose time in sideways phases.
And both losses hurt your compounding journey.

The key to winning in the market?
Stick with stocks in their bullish phase.

Now by bullish phase I don’t mean constant green candles one after another, but their overall trend needs to be upwards.

How to identify which stocks are most bullish currently?
That’s where momentum comes in.

Momentum helps you measure a stock’s bullish strength. That’s it! Stronger the momentum score of a stock stronger is it’s bullish phase. Momentum helps filter out the stocks in their bullish phase from the entire stock universe.

Just becasue a stock goes up 5% one fine Monday morning does not mean it has high momentum! A stock needs to consistently show upmoves across various timeframes to exhibit high momentum.

A system that prioritizes holding stocks going up and not relying on many other jargons has proven to be a winner over a number of years.

Isn’t it interesting we covered a topic on how to make money in the stock market using simple english and logic and not needing to use hundreds of finance bro words. Investing is simple if one wants it to be.

That's it for today, if you want to see how a momentum system helps me make money just subscribe below and I’ll send over my latest momentum portfolio.

-Manish