October 30, 2014

Market outlook

Trend is up and will reverse on close below 7800. Above 8200, rally possible to 8500 spot.

Any correction from here will likely form a higher swing low (ideally around 7800 or above).

Option writing points to support at 8000 (NOV series).



October 29, 2014

Market outlook

Trend is up and will reverse on close below 7800.

Option writing points to support at 8000 (NOV series).

October 28, 2014

Hot stocks

AMARAJA BATTERIES - Stoploss 560

AMARAJA BATTERIES chart

Market outlook

Markets close above 8000 first time this month. So while technically the trend has shifted to "buy" on EOD charts, one has to consider the previous day's bar high at 8060 showing selling.


October 27, 2014

HIND UNILEVER update

Stock lost 5% today... this is a big move for this stock.

Now ast buy signal was around 600-620 levels. Close below 710 will trigger a sell signal for this stock.



Markets form "dark cloud cover"

Markets form a "dark cloud cover" or "piercing bar pattern". This happens when we have a nice gapup opening followed by a selloff which closes within the range of the previous day's candlestick.

Because of above, preferred strategy on EOD charts is to do nothing and let markets give some clear direction. As of now, I expect markets to be directionless between 7800 and 8200.

October 26, 2014

Do you get scared after you take a position?

Do you get scared after you take a position?

If yes, then something is wrong with the way you are trading.

Most probably, the fear is because you are trading against the trend and/ or you are trading a position far beyond what you should ideally be doing.

If you are comfortable with your position, it means you have the trend in your favour (known often in hindsight) or because your positions are so small it is unlikely to cause any material loss in your capital.

If the latter is true, there is a high chance you stand to make good money not necessarily in this particular trade but over a large number of similar trades.


Weekend update

Current trend is down and will revert to buy on close above 8000 spot.

Note strong resistance at 8200 levels.

Option writing points to support at 7800 (OCT series).

October 21, 2014

Stocks for long term investment

These are some stocks I will be investing over the next 2-3 years. I already hold many of these stocks as a part of my long term investment but I will be adding more over the next one year.

There is no TA here... only some basic very simple FA.

All these stocks (with 2-3 exceptions) belong to well known reputed business groups, have been in existence for decades, have good products, are dividend paying and are highly liquid.

It does not matter whom you follow as long as ...

It does not matter whom you follow as long as you learn to manage the risk in your trade.

Follow anyone.... any analyst, any TV call or call from any forum... it does not matter. Just control the risk.

If you cannot control the risk part of a trade, chances are you will be out of business very soon.

It is not a coincidence that the most successful traders are also excellent at managing risks.

So whatever you do, make sure you do not risk more than 1 or 2% of your capital on any trade.

This process also sets you up emotionally for a loss so if it comes you are not in pain and know that you have take the hit. Since you are losing only 1% of your capital, booking a loss becomes far more easy.