How Best to play the Railway theme?
Via Sectoral Fund/ETF
“You can do anything, but not everything. Allocate accordingly.” — David Allen
Disclaimer: Nothing discussed or written in The Technical Take is a BUY or SELL recommendation.
So the markets are at a crossroads.
We have bounced off the March bottoms and nearing a bigger resistance.
A breakout of which could signal more bullishness.
Bull runs are great.
But it brings with with it, a set of problems of its own.
Reminds me of the railway move early in the 2023 bull market.
While identifying which groups will lead may be a simpler problem, which individual names will be leaders is quite a task.
As such, there is always a possibility that you may not get into the leader or get in late.
Then there is another thing.
FOMO. Every time a probable leader breaks out or does well, there is this slight dose of FOMO.
Well, you can choose to buy all the stocks from the group, but that will bring another set of problems. More names, less allocation. More names, less attention per name. For a swing trader, it surely is a recipe for mess.
Defence is a really good example of this problem.
We sort of know that it is a leading group. But unsure about the leaders to a certain extent.
So what is the Solution?
Play the group via its ETF/Mutual fund.
That’s what I did with Defence as well.
What about Railways?
I was pleasantly surprised to discover that Groww has an ETF for Railways. Its called
GROWRAIL (Groww Nifty India Railways PSU ETF)
Here are its top 10 constituents:
PROS:
Lets you play the sector via a single click.
Helps with FOMO
CONS:
poor liquidity. So you wont be able to size more.
Less allocation to favorable names.
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Anyways
I am writing this post very much off the cuff, as I dont want to repeat what happened with the Defence article.
I was waiting to write the perfect article and it never left my drafts
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