Stock Picking Using Chatgpt (AI): Multibagger Stock Finding Strategy

We all dream of catching those multibagger stocks, right? You know, the ones that can multiply your investment many times over. But finding such gems involves quite a bit of legwork, like doing fundamental analysis, checking out the company’s management, and diving into technical analysis. Wouldn’t it be awesome if there was a simpler way to spot these winners early on?

Well, you are in luck! Today, we are going to show you how to use ChatGPT and TradingView to make this whole process a lot easier. By the end of this article, you will know how to create a Pine Script that helps you identify potential multibagger stocks early, giving you clear buy and sell signals. Let’s get started!

Step 1: Define Clear-Cut Rules

First, we need some simple rules for our strategy. We will focus on the momentum factor, which is all about catching stocks that are on the rise. Here is our game plan:

• Buy Signal: Enter a stock when it breaks its 52-week high.
• Sell Signal: Exit the stock when it falls below its 52-week low.

This way, we are betting on stocks that are already showing strength and riding them until they show signs of significant weakness.

Step 2: Use ChatGPT to Generate Pine Script

Now, let’s get ChatGPT to help us create the Pine Script code. We will ask it to write a script that:

• Buys a stock when it breaks its 52-week high.
• Sells a stock when it drops below its 52-week low.

Here’s how you can prompt ChatGPT:

“Create a Pine Script for TradingView that gives a buy signal when a stock breaks its 52-week high and a sell signal when it drops below its 52-week low.”

ChatGPT will then generate the code for you. Just copy this code.

For example,

Step 3: Implement the Script in TradingView

Next, head over to TradingView. If you are not already using it, TradingView is a fantastic platform for charting and analyzing stocks. Here’s what you need to do:

1. Open the Pine Editor: At the bottom of the TradingView interface, there’s a tab called “Pine Editor.” Click on it.
2. Paste the Code: Copy the Pine Script code from ChatGPT and paste it into the Pine Editor.
3. Add to Chart: Click “Add to Chart.” This will apply the script to your stock chart.

Now, the script will calculate the 52-week high and low prices. You will get a buy signal if the stock’s price closes above the 52-week high. If it closes below the 52-week low, you will get a sell signal.

Step 4: See It in Action

Let’s look at a couple of examples to see how this works:

• Cochin Shipyard: Our script gave a buy signal at 194 rupees around August 2022. Since then, the stock has been on an upward journey, hitting 2,100 rupees. That’s a massive gain!

• Reliance Industries: The script gave a buy signal in 2015 and a sell signal in 2020, helping you capture significant gains over the years.

You can try this with any stock — Mid-cap, Large-cap, you name it. For example, when Zomato breached its 52-week high of around 77.60 rupees, the script gave a buy signal, and the stock has been trending up since then.

Fine-Tuning Your Strategy

Want to tweak the strategy a bit? Maybe you don’t want to wait for the stock to hit its 52-week low before selling. You can adjust the script to exit if the stock falls below its last 20-week low instead. This way, you can lock in profits sooner.

Just change the sell parameter in the Pine Script from 52 weeks to 20 weeks, and you will see the sell signals adjust accordingly. This is already made in the chart of Zomato example shown above.

Putting It All Together

Combining technical analysis (for entry and exit points) with fundamental analysis (to pick solid stocks) can help you build a portfolio of potential multibaggers. Websites like Screener.in are great for analyzing stocks based on fundamentals. Once you have a list of good candidates, apply your TradingView strategy to manage your trades.

That is it! By following these steps, you can simplify the process of finding and trading multibagger stocks. Give it a try, and you might just catch the next big winner!

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.