Sequoia Capital

Business School
 Catalogs

01 Global Perspective 02 Deeply Cultivate

India

03 Quality Stock 04 Trading System

Analysis
Global
Perspective
Stocks rise as investors weigh producer prices
and other macro data
Benchmark U.S. stock indexes ended higher on Wednesday as markets
assessed the latest batch of economic data, including October producer
prices and retail sales reports.

In economic news, producer prices unexpectedly fell month-on-month in

October, the largest drop since April 2020, while annual wholesale costs
rose less than expected.

The Bureau of Labor Statistics reported that the U.S. producer price index
fell 0.5% last month on a seasonally adjusted basis, reversing a 0.4% gain in
September.
Domestic News ：

Dr. Reddy's Laboratories launches wearable device for migraine management, shares rise

India's RPP infrastructure projects win multiple orders, hitting 4-year high

Pennar Industries shares surge on fresh orders worth Rs 669 crore

Indian Oil shares rise after govt cuts windfall tax on crude oil

India's DCM Shriram Industries surges in second-quarter profits, shares rise

Suzlon wind turbine range listed on government, MSCI shares rise

Deeply Cultivate India
 Raise stock price
Test transaction
Clean market
Open a position to absorb chips

The business school cooperates with major domestic institutions and securities firms! In
STARTECK, which was jointly laid out at 2:00 this afternoon. In the early trading, our
business school trading department and the trading funds of major institutions began to open
positions to absorb chips, and used part of the funds to slowly enter the market in batches,
as shown on the left side of the picture rectangular place. After getting enough chips, we then
started to test the transaction, mainly testing the selling pressure from above, as shown in
the red circle in the picture, which proved that the stock's pull-up was not strong. Then we
began to clean up the market behavior and controlled the stock price to maintain a sideways
state. Let the impatient retail investors hand over more chips, as shown in the rectangle on
the right in the picture. And finally arranged all students to enter the market at 2:00 pm. Then
our business school used a small part of the funds to enter the market and started to
increase. And the stock price began to rise linearly. Until the daily limit! Finally, used small
amounts of funds to raise funds to protect the market and seal the daily limit until the market
closed!
Cross-week gold stocks
The Trading Department of the Business School will lead the students
who have not bought, at 2:00 tomorrow afternoon to arrange a cross-
week gold stock! Don't miss the time when the time comes.

From this event, everyone can find the huge gap with the old
students. Our business school also promoted this event for a week.
Our business school did its best to make all the preliminary
preparations, and the students just need to show their execution
ability! Even on this point, there are still many people who fail to do it.
Everyone should reflect on themselves.

STARTECK is the research result of high-quality underlying stocks

obtained by our investment research team from the Economic
Research Institute of Sequoia Capital Business School through
multiple field surveys and repeated reasoning and verification. All
students must cherish it! No external rumors are allowed! Because it
is a trade secret belonging to our Sequoia Capital Business School.
Once it is found to be leaked, our legal department will initiate judicial
proceedings to pursue criminal responsibility for the relevant
personnel!
The unknown side of the stock market
In order to make money from retail investors, institutions are constantly studying the
psychology and behavior of retail investors. Retail investors might as well consider
themselves as institutional investors and study the psychology and behavior of
institutions, so that they can survive in this world full of traps, frauds, deceptions
and be invincible in a market full of rumors.

Institutional investors, for example, if they want to make a medium- to long-term

stock, they must first find one that is the right size, does not have to great prospects,
but will never go bankrupt within a few years. Then I go to visit the owner of the
company, tell him that I want to invest in his stock, and ask him to cooperate. How to
cooperate? That is, when I am raising funds, try to keep the performance as flat as
possible in the announcement, or hide the profits appropriately. This is easy for the
company to do, as long as the report is appropriately adjusted.
The game between institutions and retail investors is
concentrated in companies with small capitalization

For companies with large equity capital, most of the main holders of stocks are
institutions or major shareholders in the primary market. The chips owned by retail
investors are too small to attract the interest of institutions. In other words,
institutions primarily play games with other institutions. In this case, it doesn't
matter to the institution whether retail investors hold the stock or not.

The places where institutions and retail investors compete are in companies with
small capitalization, because retail investors hold more stocks. If an institution wants
to complete a round of "cutting leeks" process, it must collect enough chips, which
is the so-called fund accumulation.
Institutions do everything they can to bring down stock prices

Institutions have many ways to compete with retail investors, using their financial
advantages to sell stocks in large quantities and achieve sharp declines. They can
also join forces with companies to release bad news to suppress stock prices. They
can create a technical breakdown, causing panic among retail investors... In this
process, I believe that the vast majority of retail investors will become seriously
emotional and be forced to admit defeat and hand over their "chips."

Institutions may also create a downward trend in the stock price rebound, and some
determined retail investors may continue to cover their positions in order to reduce
the cost of holding positions. After retail investors finish covering their positions
and institutions create another big downward trend, it is hard to say whether retail
investors can still hold on firmly.
Retail investors are trapped, institutions leave the market,
and the stock price will remain stable!
Anyway, the institution has plenty of funds to play. If it doesn't work once, it will try a second time until it gets enough
chips to achieve market control. At this time, the institution will control the market and pull it up according to the original
plan. In the end, those retail investors who are determined not to sell will ride on the institution's coattails, harvest "leeks"
together, and make a lot of money. New retail investors who enter the market will be deeply trapped when the stock price
drops.

If retail investors unite and fight the institutions to the end, then the institutions will have no choice but to run away.
However, due to the suppression of the stock price by institutions and the departure of institutions, the stock price will
remain in a state of calmness, like a dead electrocardiogram. As a result, retail investors who are united will be trapped.

In such a speculative casino market, retail investors cannot beat institutions. Although there are many retail investors but
they are all in disarray. If all retail investors can unite as one, there really is nothing that institutions can do. The problem
is that retail investors cannot be of one mind, but institutions have many ways to do this. Retail investors hold on to the
stock and don't let go. Institutions pull the price up slightly to tempt new retail investors to buy, and then sell at a high
level. If the market is repeatedly pushed downwards, some retail investors will always flee after each time the market is
lured in. This repeats until most retail investors sold at a loss.
Why do most retail investors not make
money in the stock market?
After an institution chooses a stock to enter, it is like a businessman choosing a shop. After renting or buying it, it
becomes a part of his life. Buying and selling stocks means purchasing and shipping. Generally speaking, it takes a
long time to operate, several years or more.

The key here is the store’s pricing power. Your goods were first approved in this store, which means that your cost,
quantity, price and other commercial data are not confidential. The store owner naturally knows everything. When
business is slow, the boss will let you know. Are you selling to people who might be selling to the store? Absolutely
not.

In other words, the shop owner’s activities are behind the scenes, but your activities are under the eyes of the shop
owner. Which one is better and which one is worse? It’s clear at a glance.

Another point that is more important is the time concept of passers-by and shop owners. The store owner is a long-
term business owner. He can operate the business one by one or sideways for several months because he has a fixed
location and fixed goods. What about the passers-by? If the goods are not disposed of in time, food and clothing will be
in trouble immediately. The asymmetry in status makes it difficult for retail investors to make money from institutions.
However, institutions have pricing power and it is relatively easy to make money from retail investors.
High Quality
Stock Analysis
This stock is provided by student with account G89214, and the stock name is SUZLON.

The stock is in a strong rise. According to the golden section, we can see that (this will be
explained in detail in future courses) every time the stock price breaks through an important
pressure level, it will open up new room for growth, as shown in A, B, C in the figure. And the
price has always been running above the 24 moving average, and has recently broken
through C, then we need to focus on the 44.2 line pressure above. Which is also the final
point of this round of large-scale rebound! There is a high probability that it will go out of
sideways or callback trend.
This stock is provided by student with account G89216.
The stock name is IDFC FIRSTB

The stock is in a rising callback stage. The 24-day moving

average is flat, and the overall trend is volatile. The recent
highs of the band have gradually moved downwards,
showing a slight weakness. Only when the price breaks
through the downward sloping blue line, it can officially
enter the upward trend. So we need to focus on the
pressure at the center of the red circle in the picture.
This stock is provided by student with account
C2315.
The name of the stock is Mahindra & Mahindra

The stock is in the rising sideways stage, with relatively

small amplitude. It is divided into four levels based on
historical trends. The current price has successfully stood
above the red horizontal line, and a bullish engulfing
pattern has appeared. You can buy it. You need to pay
attention to B and C above. If you are at a pressure level,
refer to the historical market, and if you want stocks that
will rise sharply, then go for stocks that have broken
through the box or stocks that have experienced big ups
and downs. If you want to operate stably, focus on these
types of stocks. The risk is very low, and the profits are
gradually increasing. In the case of compound interest, it
will not be too small.
This stock is provided by student with account D60392, and the stock name is YESBANK

The stock price began to rebound rapidly, and directly broke

through the high point of the left band, as shown at B in the figure.
This is now the first rebound. Generally, the intensity will not be
too strong. You should pay attention to reducing some positions
when a red candle appears at any time, and wait for the follow-up
to step back again. Position C is the area to cover the position
again. Just focus on the pressure level of the blue line at the top!
This stock is provided by student with account D60432. The stock is named BMW.
The stock has recently successfully broken through the highest pressure level in 2021, and it
still jumped upwards in a strong way. The next day, the cross star covered part of the gap.
This is also equivalent to a retracement to accumulate strength and increase the subsequent
rebound. Momentum, as shown at A in the picture, is a buying opportunity. If the subsequent
rebound is weak, there is a high probability that it will go out of the shock trend. Once the
stock price breaks through the shock again, it will be a position to cover the position again, as
shown at B in the picture. You can pay attention to it in the future!
This stock is provided by student with account A21039.
The stock name is POONAWALLA

The stock is at the top and has fallen back under pressure. The recent
rebound has begun to strengthen, and it has successfully stood on the
middle blue horizontal line. This is a signal that the stock price has
turned to an upward trend. However, after all, this is the first rebound,
and the intensity will not be too great. Therefore, there is a high
probability that you need to step back to accumulate strength before
you can have greater rebound momentum. As shown in the figure, you
need to focus on the point A where you step back, which is the most
stable spot to open a position.
This stock is provided by student with account D60300, and the stock name is TINNARUBR

The stock is in an upward trend and has recently

broken through new highs, opening up new room
for growth. As shown in the figure, point A is a
buying opportunity and is currently in its first
rebound. Pay attention to the historical trend.
Every time it breaks through a new high, the
stock price rebound that lasts for about 5 trading
days will reach near the top, so the stock also
needs to pay special attention. Once it starts to
stagnate, you need to pay attention to reducing
your holdings, and then observe whether it stays
in B and fluctuates sideways or returns to A.
Trading System
Clean Market
Institutions control the stock price to cause large fluctuations,
allowing investors who are not firm in holding shares (not
particularly optimistic about the future market rise) to sell the
stock, and investors who are firmly optimistic about the stock's
rise to buy the stock. It reduces the selling pressure from above
for stocks that institutions are about to push up (everyone is
optimistic about the market outlook, so fewer people will sell
stocks during the rise), thereby achieving the purpose of rapid
stock price rise. Generally there is a bottom cleaning market and
a rising cleaning market.
Prerequisites for market cleaning
1. The prerequisite for market cleaning is that institutions have
purchased a large amount of chips in advance, and there will
be a large trading volume at the opening position, and the
stock price will often rise in volume.

2. Cleaning the market does not mean selling a large amount

of chips. Sometimes there will not be a large trading volume,
and it will often shrink and fall.
The purpose of cleaning the market
The main purpose of institutions cleaning the market is to raise the average holding
cost of retail investors and squeeze out retail investors who follow the trend in the
short term, thereby reducing their own pressure to raise the stock price.

1. Clear the chips: One of the purposes of institutions cleaning the market is to use
various means to drive out the shareholders who bought in advance and prevent
them from making too much profit.

2. Increase the cost of retail investors: In the process of cleaning the market,
institutions must not only wash out those retail investors who are not confident in
holding shares, but also allow new buyers to enter the market.

3. Reduce own costs: Institutions adopt top-down market cleaning techniques and
can also gain the benefit of buying low and selling high.
Commonly used market cleaning techniques in the market

For us, even if we do not control individual stocks,

when we trade individual stocks in the future, how
should retail investors respond to these market
cleaning techniques of institutions?
Sideways shocks clean the market

For some low-value stocks that are favored by the market,

institutions often use sideways consolidation to clean up the
market. Because for this kind of individual stock, if its stock price
is suppressed, the chips will be bought at a low price by retail
investors and other institutions. Therefore, institutions will
deliberately create a long-term consolidation pattern, severely
damaging the confidence and patience of other investors in
holding shares, forcing them to give up their illusions and hand
over their chips.
Shrinking and falling, cleaning the market

If the stock price of an individual stock is falling, the trading

volume will become less and less, which is significantly lower
than the normal level. There are various signs that this price at
this time is most likely an institution carrying out market cleaning
actions. There is also a prerequisite here, that is, before the
stock price falls back, there must be an obvious wave of heavy
volume increases. Because the increase in volume can indicate
the entry of institutional funds.
Cleaning the market while pulling up

There is a situation in the market. For institutions that are weak and lack
the ability to control the market, they often adopt the method of raising
prices while cleaning the market. Specifically, institutions will control the
stock price to oscillate greatly every day, and at the same time make the
candle lines appear in an alternating red and green pattern, but the
overall trend is gradually upward. In this case, the graph shows more of
a oscillating rise or rising channel, and the vertical distance of the
channel will not be very large. In this case, sensitive and suspicious
investors will panic and hand over their chips after making profits,
indirectly achieving the institution's purpose of cleaning the market.
Digging a big hole to clean the market

This is a common method used by long-term institutions. After absorbing a certain

amount of chips, the institution will use bad news or adjust the index to fall, causing
the stock price to fall back. Often, this kind of price drop will be relatively large, and
even break down certain support levels, forming a downward false breakthrough. Of
course, the reason behind it may also be that institutions are unwilling to forcefully
support the high stock price, and they are not willing to have too many followers to
buy this stock.
Red candle cleaning market
When the stock price slowly rises, and the institutions do not hold many chips, they will use
the index to adjust the decline or the institutions themselves will deliberately clean the
market. At this time, red candles appear, and the stock price trend is extremely bad. This
bad situation often lasts for 1 to 3 trading days, but the stock price will then rise rapidly
amidst the hesitation and fear of retail investors, without giving retail investors the
opportunity to buy the bottom. Usually this kind of market cleaning will not be carried out for
a long time or relatively deep. Generally, as long as the market timing is right, it will quickly
increase the stock price.
Thanks