Abstract

Kapil Shah (Kapil) had started investing in the share market in his mid-twenties and had seen some ups and downs over a decade. Kapil then decided to overhaul all his existing stock positions on the increasing prospects of the Narendra Modi led National Democratic Alliance coming to power in India in May 2014. On the election results day – May 16, 2014 – he bought ten stocks to ride the possible development wave agenda of the new government. However, by the end of February 12, 2016, his portfolio had generated a return of only 1.96%. Things became tough for Kapil as repayment for a loan fell due on August 22, 2016. Kapil wanted someone’s help to ensure he generated good returns from his portfolio so that he could repay the loan by liquidating a part or even his complete stock portfolio. For this, he contacted Dhaval P Vyas Investment Research, one of the leading financial consultancy firms in India. Based on Kapil’s profile, Dhaval P Vyas suggested that Kapil drop six underperforming stocks and purchase six stocks which he expected would perform better in the future. What should Kapil do now?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• To understand how to do client profiling before deciding on the risk and return matrix for the client
• To learn how to use various technical analysis tools and technical analysis software to recommend any stock to a client
• To find out how and why the technical analyst selects any particular stock to buy/sell.

Keywords

Moving Average; Support level; Resistance level; Trend Line; Dow Theory; Trend Analysis; Technical Analysis; Trading Strategy; Stocks Scanning; Uptrend; Downtrend; Patterns Recognition; Chart Patterns; Fibonacci; Trend Reversal.