Knowledge Centre

What is the Right Time to Sell Your Stocks?

Updated on 30 January 2017

It’s been always difficult to predict the right time to sell the stocks. To ease the problem our research team uses technical tools for stock analysis. With our stock advisory services, you can know what needs to be done and when it needs to be done. Below are the few stock trading strategies by our research team suggesting when you should sell your stock.

  • Target Price: The target price or the valuation of the company is determined after considering the performance and profitability of the organization. When the stock hits the target price as suggested by our research team, exit from the stock.
  • Change in Fundamental: If the fundamentals of the company have changed then the stock should be sold. By fundamental change, it means a negative change which would slow down the growth of the company. The change can be due to the entrant of a new competitor, a defect in company’s product, declining sales, corporate governance issue, etc.
  • Better Opportunity in Other Stock: If there is a better investment opportunity in other stock which can give higher returns then, the profit should be booked in current stock and the funds should be diverted in the new opportunity available.
  • Dividend: When the rate of dividend is falling gradually or eliminated then, it is preferable to exit the stock as it’s a sign of financial difficulties that are waiting for the company in future.
  • Stop Loss: When the stock you invested in, hits the stop loss it is not preferable to remain invested in the stock. Stop loss can be considered at 10% drop in price in comparison to investment price. If you prefer to remain invested then that should be based on your ability to tolerate the risk.
  • Rebalancing of Portfolio: If your portfolio consists of investment in one particular sector then rebalancing should be done to diversify it. All investment in one sector can prove fatal if there is some negative inflow of news.
  • Market Sentiment: It often happens that stock falls even when the company is performing well. The reason behind it can be the market sentiment. If the index is falling down and bears are active in the market, it is preferable to exit the stock at that point of time and re-enter the stock at lower levels.
  • Hype: When the stock has rapidly risen due to some news inflow and media attention, it is the right time to sell. This is because such hype always attracts inexperienced investors, who sell the stock when the hype is over and then sudden fall in stock price takes place.

Indices Master is a SEBI approved leading stock investment advisor. With our technical and statistical analysis of various scenarios, it becomes easier for you to arrive at a right decision.