There are some trading decisions you make can be filled under “Insufficient Evidence” category. Here you have to make decisions based on common sense rationale. Data centric analysis will always point towards negative bias and you will never be able to find the reason for another 50% or 100% rise in the stock next day or week or month or year later.
Is it called gambling to buy such stock then?
One should rather plead the fifth than answering such question 😉 To justify the sane investing / trading rationale for such decision, we would say, no it is not gambling but rather calculated speculation with strict risk control. If you are betting the house on some shoddy penny stock then it is gambling. But putting a tiny bit of your investment portfolio on a stock which has very limited downside but huge upside potential then it is good speculative technique.
In case of Unitech Limited stock, there is no point in looking into the numbers because they are just simply bad. But if something has survived more than a year or two assimilating all sort of news then there are more probability of it going up than going down.
We did a similar but more convincing trade in Amtek Auto and little part of the gains from that trade can of course finance another speculative trade in Unitech Limited 🙂 Such rounding bottom formations can provide huge gains if things work out.
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