What does a Multibagger stock mean?
Any stock which generates returns in multiples of its price can be termed as a multi-bagger. However, in the stock market, this term is usually associated with stocks giving returns in excess of 10 times its price (i.e. ten baggers and above).
How to identify a multi-bagger stock using the Cycle app:
Cycle app has been designed to help users identify & shortlist multibaggers for their long term portfolio. The steps to follow are:
Shortlist a stock based upon the following two basic criteria:
- It must have BUY signals under all 3-time frames (Short, medium & Long term).
- It must have a minimum CRS rating of 80.
Once the stock is selected, take note of the “stop-loss” mentioned under the Long term BUY signal and use it in future, if necessary.
After buying this stock, keep a close watch for any signal change under its “LONG TERM” time frame and exit (book profit) once the signal changes to Wait.
Here, it must be noted, that although the app is designed to benefit the users in identifying multi-bagger stocks, market risks cannot be overruled and hence the success rate of 100% cannot be guaranteed. Therefore it is imperative to act in accordance with prevailing situations:
| Long Term Signal | Price Trend | Inference |
| BUY | Decreasing | Exit when stop loss hits & re-invest elsewhere |
| BUY | No change (2-3 months) | Exit & re-invest elsewhere |
| BUY | Increasing | Stay Invested |
| WAIT | N/A | Book Profit & re-invest elsewhere |
Remember!
A stock turns into a multi-bagger in future over a period of time (usually 5-10 years) and hence patience is the key to success.