Picture a fast bowler with exactly one delivery. Quick, straight, on a good line and length. It works, until the batters figure it out. A few overs in, they know precisely what is coming, and even a well-bowled ball starts getting picked off for boundaries.
Now give that same bowler a second delivery, a slower ball, a yorker, anything that is not his stock ball. He does not need to bowl it often. Just knowing he might is enough to make the batter hesitate for a fraction of a second before committing to a shot. That hesitation is often the difference between a boundary and a wicket.
Another weapon in the armoury does not replace your main skill. It just makes the person carrying it far harder to play against.
Most equity investors are one-delivery bowlers. Fundamental analysis is their stock ball, and it is usually a good one. Technical analysis is the variation most of them have never bothered to learn.
And in this newsletter, I will share with you two weapons – Technical Analysis & Options Selling, which can improve your investing outcomes.
Technical Analysis – The First Weapon
Fundamental analysis answers one question: is this business worth owning? Revenue growth, margins, management quality, valuation. Most long-term investors are generally good at this. It is the part of the job everyone respects, and the part everyone was taught to focus on.
Technical analysis looks at a stock’s past price and volume to guess where it’s likely headed next, and how strong that move could be. It’s not a guarantee, just a view based on how similar patterns have played out before.
Fundamentals decide what you buy. Technicals try to answer when. You can identify the right business and get the valuation right, and still buy at the wrong point in its price cycle, a mismatch that can shake your conviction long before the fundamentals get a chance to play out.
Most investors are comfortable with fundamental analysis. Technical analysis, on the other hand, gets filed under “that’s for traders” and left there.
But even a basic layer of technical analysis, added on top of what you already do, can change how well those decisions play out.
A Real Case
The Infosys test, early 2023.
Infosys cut its guidance in early 2023. The stock fell nearly 25% and then went nowhere for months. Two investors looked at it around the same price, with the same information in front of them.
One waited. She watched the weekly chart, saw no sign that the fall had stabilised, and stayed out. Months later, the stock built a base and started climbing again on rising volume. She bought then, at a slightly higher price than the bottom, but with far more confidence that the worst was over.
The other bought immediately because the valuation already looked cheap. The stock kept falling for weeks after his entry. He was not wrong about the business. He was early, and being early can feel identical to being wrong until it is not.
Both approaches can work. What matters is knowing which one matches your temperament, and whether you were watching the chart closely enough to even notice the choice existed.
Illustrative example for explanatory purposes only. Not a recommendation to buy or sell Infosys or any other security.
The Six Technical Checks
None of this replaces your fundamental research. Think of it as a second opinion from the chart before you commit capital, and nothing more.
Options Selling – The Second Weapon
We know that many long investors, when they hear about Futures or Options, they simply close their minds because they think it’s for speculation.
But that’s not why Options exist in the first place.
Options were built as insurance. A farmer worried about crop prices falling before harvest, or an importer worried about a currency moving against them, could pay a small, known cost upfront to protect against a bad outcome. If the bad outcome never showed up, that cost was the only expense. If it did, the protection paid for itself many times over.
Somewhere along the way, that original purpose got buried as the world started using options as a tool to speculate.
For an investor, the more natural role usually isn’t the one buying protection. It’s the one selling it. Insurance needs two sides, someone paying the premium, and someone collecting it. If you already have the cash set aside to buy a share, or already own shares you would be happy to sell one day, you can be the side that receives this premium.
We will not get into the mechanics of options selling here. For now, the only thing worth taking away is that most investors who use options sensibly are quietly on the selling side, collecting a premium for a promise they are already comfortable keeping, not placing a bet on which way a stock will move.
The Trading Titans Magazine
The work behind this newsletter.
This newsletter only scratches the surface. Our team spent months building this Investor Special edition of Trading Titans Magazine built entirely around this idea: technicals analysis and options selling as tools for long-term investors.
The edition walks through the Six technical checks using examples of Nifty, Bank Nifty and stock charts. It also includes a scored checklist so you can test any stock against a momentum or a value approach before you buy.
Later, we have also covered a couple of Option Selling Strategies that will help you improve your returns.
We didn’t want this to be another PDF you skim once and forget. Every section comes with a video, so you can watch the setup on a real chart, not just read about it.
So I urge you to download this magazine and take out time to study it and implement it in your investing journey.
If you enjoyed this newsletter, feel free to share it with your friends and family using the link below.
Vijay
CEO – InCred Money
P.S. I share my thoughts on Investing and the Economy regularly. You can follow me here.
