September 30, 2015

To earn profits, first learn to cut losses.

To earn profits, first learn to cut losses. 

Profits will automatically come.

Ultimately, you and only you, are the creator of your destiny.

You can, of course, blame your problems on someone else. But then, it is a choice you have already made.


kpl

Stocks changing more than 5% today

Hot stocks :: ROC > 5%

NOTE:
  • Code :: ROC > 5% ROC <-5 span="">
  • Text size refers to liquidity. Bigger the size, more the liquidity and vice versa
  • Risk management: never risk more than 1% of your capital on any trade

TATA STEEL technicals on different timeframes

Trend is down on daily charts. Close above 245 will be bullish.

BANK NIFTY one day after rate cut

Looking at SEP candlesticks, can you tell when the rate cut happened?


NIFTY monthly charts

- month has ended today so here is the monthly chart analysis
- NF has broken support at 8000
- this level will offer resistance for some time
- this month, break of 8000 did not attract much selling
- and closing is a doji with bullish tail


Market outlook

- trend is down on daily charts
- today nifty closed in the positive; AD was positive
- NF currently tracing out "f" leg of anticipated diametric
- this should get over soon and next small correction or "g" wave will start




NIFTY futures intraday charts

- initial bias bullish (gap up)
- lower tails on first 8-10 bars show buying
- today showing new method for small trades
- this is exactly similar to swing high/ low but on 1 min charts
- on 5 min charts, buy arrows are shown in black
- exit is when low of previous bull bar breaks.

This method is good for someone who likes to earn fast money in short time. Drawback is high number of whipsaws (none today though).



Registered research analysts rises to 121 as of July: SEBI

After markets watchdog SEBI made it mandatory for market research analysts to get registered with it from December 2014, the number of such persons/ entities rose to 121 till date, according to official data.

Till December 1, 2014, market research analysts were operating as unregistered and unregulated entities and there were instances of them misguiding investors.

While the number stood at just two in January this year, it rose to 121 as of end July.

According to the SEBI data, there are 121 authorised research analysts providing reports and services related to the securities market.

Morgan Stanley India Company, Edelweiss Securities, Barclays Securities, Angel Broking, Religare Capital Markets are some of the entities authorised to provide services as research analysts.

CAPITAL ALLOCATION- ITC, L&T – VALUE DESTRUCTION

When a company like Larsen and Toubro shouts about economic conditions being a matter of concern and is put forth as the reason for a poor financial performance, it is time to pause. A company’s poor performance can be on two counts- Poor economic environment or poor company circumstances.

Why I worry is because the company has an order book that is getting executed. So, to put up a poor show, it would imply that either the customers have called off their orders or are unable to pick up their bills.

If orders are getting executed as planned, but not getting picked up, it should mean a working capital tightness but should not impact the EBITDA margins. If EBITDA margins are poor the reasons are not the same. It could be pricing pressure (which means that poor profitability was written in the day the order was booked) or rise in input prices. To my knowledge, there has not been any appreciable rise in input prices over last two or three years. In fact, if we take commodity prices, they have been trending down.

September 29, 2015

India "Surprises" 51 Out Of 52 "Experts", Slashes Rates More Than Expected As Easing Bonanza Continues

Late last month, we asked how long it would be before the RBI hit back in the wake of China’s yuan deval.
The Indian government’s chief economic advisor Arvind Subramanian had just told ET Now television that India may need to "respond" to China’s monetary policy stance, and also hinted at further export weakness. It wasn’t hard to read between the lines: more shots were about to the be fired in the ongoing global currency wars.
Reinforcing that contention was the following from Deutsche Bank:

Market outlook

- trend is down on daily charts 
- today markets closed in the positive; AD was negative. 
- most probably, "f" leg of diametric has started 
- after this, one down leg "g" will be pending
- option writing points to support at 7500 and resistance at 8200.




NIFTY futures intraday charts

- breakout from initial trading range was bullish
- next buy signal just before 1 pm
- exit on trailing SL

NOTE: trading on "news" important event days is avoidable because of high volatility


Hourly charts show impulsive (fast) moves in UP direction... this is a bullish sign.


TATAMOTORS technicals

- trend is down on daily, weekly and monthly charts
- there is no buy signal anywhere
- next support on monthly charts is around 250 and then 200 levels

SEBI disclosure applicable


Monthly charts


Market outlook

- trend is down on daily charts
- today markets closed in the negative; AD was negative.
- markets tracing out "e" leg of diametric
- after this, one up leg "f" and then down leg "g" is pending
- option writing support 7500 resistance 8300

NOTE: for pattern to be valid, "e" has to be smaller than "c".



The Fog of Complexity

The Fog of Complexity

If you see a financial term or product that is too complex to understand, it's probably nothing but jargon invented to sell something useless


One of Warren Buffett's less well-known quotes is, 'If calculus or algebra were required to be a great investor, I'd have to go back to delivering newspapers.' To be a successful investor he hasn't needed any more maths than plain old addition, subtraction, multiplication and division. However, don't tell that to the professional peddlers of complexity that seem to infest the business of convincing people to invest. The other day, I came across an advertisement for an opportunity to learn about how 'gamma' could be used for financial planning, including, apparently, for mutual fund investments.

Read full article at https://www.valueresearchonline.com/story/h2_storyview.asp?str=28894

Why Retail Investors Are Moths To The IPO Flame

... Truth be told, the whole idea of an IPO itself has changed from one where companies came to the stock market to raise growth capital to one where promoters either want to cash in on their own holdings, or provide an exit to outside investors. Therefore, the primary market is no longer a place where investors undertake equity risk for the upside in a growth story.

Read complete story at http://www.outlookbusiness.com/perspective/why-retail-investors-are-moths-to-the-ipo-flame-1940

September 28, 2015

Hot stocks and charts

LAST updated: 28-SEP-2015 
  • These charts are for educational purposes only.
  • This is not a recommendation to buy or sell
  • Follow the trend... if stock is above last month's high, trend is up and vice versa.
  • Golden stoploss: min 10% or last month's low (long position).
  • Never risk more than 1% of your capital on any trade.
  • All charts are provided by icharts.in
ABB INDIA
ABB INDIA chart

HINDALCO trading below monthly supports

I expected supports to hold but that has not happened.

So trend is still down.

Next support around 40 levels.


SEBI disclosure applicable

AARTI IND closes at new high

While many stocks are making new 52 week lows or breaking their supports, this is one stock still making new highs.

Support 450-380.

Stock was below 100 in 2014!


SEBI disclosure applicable

Achhe din kab .....

Google automatically auto completes/ suggests appropriate word

NIFTY futures intraday charts

- initial trading range was 7855-7915 F
- breakout out of this range failed
- this breakout was a good example of fence sitters doing nothing but waiting for a breakout to take a short position
- short trade initiation was the only possible trade here
- personally I am not comfortable in trading days like this (just gut feel)



September 27, 2015

Some interesting monthly charts

SEBI disclosure applicable

ABAN - stock has lost more than 90% of it's value and is trading near multi year support.


September 24, 2015

Top gainers analysed

SOUTHBANK up 11%



NIFTY Fibonacci retracement levels

- correction so far is around 38% retracement level
- upto 50% level is normal


NIFTY weekly chart

- nifty continues to trade in falling channel
- channel formation has bullish implications
- confirmation will be breakout from upper trendline.


Market outlook + triangle

- trend is down on daily charts
- today markets closed marginally in the positive
- advance decline was marginally positive
- diametric view calls for triangle development (end stage)


Another possibility is triangle formation - this means some more up/ down possible followed by a breakout.



September 23, 2015

OCT series option writing trades

Today I wrote following stock option (calls). These are hedged by same qtty stocks in cash.



Market outlook

- trend is down on daily charts
- today markets opened gap down but closed near day's high
- advance decline was marginally positive
- note that this is the "e" wave of this correction
- two more legs - "f" (up) and "g" (down) are still pending.
- I do not expect 7500 to break (+/-50 points allowed)


NIFTY futures intraday charts

- did not trade long today so the comments below relate to hypothetical trades
- long above blue line
- green line is trailing SL
- cover on close


Hourly charts hint at some more correction. This view will get negated above 7900 F.

Logic: fall from 8100 is an impulse as 1-2-3-4-5. Most probably 4 got completed today and 5 will commence shortly (down). Hopefully this will be the last leg of this correction.


Covered call positions update

These are the calls I had written 2-3 weeks ago.


All these trades are hedged with delivery positions (same qtty).


And now covered all of them today morning. SBIN call writing was no profit no loss.


Average return is 4% this month - I am excluding any loss/ profit on delivery trade as stocks will be held for some time and I will repeat transactions next series.

These are links to the actual trades...

Sep 11, 2015
Option writing trade in TATASTEEL. Bought 1000 TATASTEEL around 243 (delivery) and wrote 1000 SEP 240 call around 11. Will hold this till expiry. If TATASTEEL closes above 243 this expiry: 1.I have to deliver the stocks I ...
Sep 07, 2015
Option writing trade in SBI. Bought 2000 SBI around 226 (delivery) and wrote 2000 SEP 225 call around 12. Will hold this till expiry. If SBI closes at 300 this expiry: 1.I have to deliver the stocks I own (no profit no loss as ...

Google fortune telling website

Ask a question. Any question and get fast answers. 


September 22, 2015

NIFTY 10000 ???

Conditions:
- 7500 should not break  (30-40 points here and there is ok)
- markets should close above 8000 next series

Do you remember this post? many people laughed at this post.





Diametric formation in nifty

- possible formation of diametric on nifty charts
- expected legs are shown
- current leg is "e" leg
- remaining legs are "f" and "g"
- after this, strong rally expected

Note: lines drawn are tentative and not indicative of reversal levels.


Market outlook

- trend is down on daily charts
- strong resistance developed around 8000-8100 levels
- next support 7500
- the longer it takes to break 7500 implies ending of correction


NIFTY futures intraday charts

- indicated yesterday "- ... high chances that markets will resume their down trend"
- markets corrected sharply once intraday support at 7975 broke
- next support at 7900 also broker and markets further 100 points
- immediate resistance 7840-7900 F for tomorrow


Hourly charts show support around 7660 F



Index Funds Are Nothing Special

An index fund is nothing special. It’s systematic, disciplined, rebalanced occasionally, transparent, low-turnover, low-cost, and low-maintenance. It’s one of the reasons they’re so hard to beat by even brilliant fund managers. You know exactly what you’re getting. Actively managed funds can do all of these things, even if they can’t exactly match the cost structure of an index fund. Instead of worrying about passive versus active, think in terms of disciplined strategies versus undisciplined strategies.
Also, there’s no such thing as passive investing anyways. Indexed investing doesn’t mean you can’t be active, just like investing in active funds doesn’t mean you can’t invest passively. Even those investors that rarely, if ever, make any changes and completely put their portfolio on autopilot have to make some decisions up front. There’s the target asset allocation, the fund types, asset location (tax sheltered or not), rebalancing intervals, and so on. Even the act of not making a decision counts as a decision.
In the future, simple portfolios will be extremely low cost while factor tilts will be cheaper than ever through a combination of competition and scale. Smart beta ETFs are already starting to turn a form of systematic active investing into this same type of process. But low cost and ease of access don’t stop investors from making mistakes. When the cost of a portfolio or a trade becomes a rounding error, it’s much easier to make changes. Emotions become the central component when costs are minimized. Behavior has always been more important than costs, but this will only be magnified as the cost structure falls. The biggest thing for investors is to understand what you own and why you own it.

September 21, 2015

Hot stocks and charts

LAST updated: 21-SEP-2015 
  • These charts are for educational purposes only.
  • This is not a recommendation to buy or sell
  • Follow the trend... if stock is above last month's high, trend is up and vice versa.
  • Golden stoploss: min 10% or last month's low (long position).
  • Never risk more than 1% of your capital on any trade.
  • All charts are provided by icharts.in
ARVIND MILLS
ARVIND MILLS chart

NIFTY futures intraday charts

- on intraday charts, today's moved looks like a corrective rally to Friday's fall
- this means high chances that markets will resume their down trend.
- today there was only one meaningful long trade which gave small profits
- of course, anyone buying with SL at day's low and exiting at market close would have earned good profits


On hourly charts, rally is a channelled move meaning corrective.

So expect downsides only if today's low breaks. Here correction to 7750 F is possible.



Goldman Calls It: No Rate Hike Until Mid-2016

... we got the latest confirmation that when it comes to policy, anything that Goldman wants, Goldman gets courtesy of a few clueless lifetime academics in charge of the US money printer.

With that out of the way, the only question that remains is not what will the Fed do, but what Goldman tells the Fed to do in 2015, or rather in 2016, because according to Jan Hatzius' latest note, one can forget about a hike in October or December, and instead focus on 2016, or rather the summer of 2016.
For the answer, we go straight to Goldman which in a rhetorical Q&A wonders "What were the most important things you learned from this week’s FOMC meeting?" to which the answer is "Mostly, the FOMC confirmed what we already knew."
Well, duh, the Fed merely read the script Goldman bad prepared - of course what the Fed confirmed what Goldman already knew. 
...
The punchline: Goldman no longer wants a 2015 rate hike, in fact any rate hike if it ever comes, will be in the summer of 2016:

September 20, 2015

Nifty Can Decline Below 7541 in Coming Days

Nifty Can Decline Below 7541 in Coming Days – EW Analysis on 20 Sep 2015

 | September 20, 2015
Nifty opened huge gap up at 7965 on Friday and bounced sharply till 8055 in morning sessions where it consolidated for a while but failed to sustain at higher levels and declined 90 points from high before closing 82 points up at 7981.
There was some confusion in pattern which I mentioned in my last analysis report but now we can see some clarity for next move on charts. So, today I am covering Nifty wave counts after July 2015 high 8665 as previous counts are same as I explained in my previous Elliott Wave Analysis Report of Nifty. Please read: Elliott Wave Analysis and Outlook of Nifty for All Time Frames as on 07 Sep 2015.
Nifty Elliott Wave counts for 21 Sep 2015
Nifty Elliott Wave counts for 21 Sep 2015
This is hourly time bar chart of Nifty covering move after July 2015 high 8655 which I am expecting as a start of downward impulse. Here it seems,

Ed Seykota quotes

Edward Arthur Seykota is a commodities trader. He holds a degree in Electrical Engineering from MIT and Management from the MIT Sloan School of Management, both in 1969.

In 1970 he pioneered systems trading by using early punched card computers to test ideas on trading the markets. Much of Seykota's success was attributed to his development and utilization of computerized trading systems to which he first tested on a mainframe IBM computer.

His interest in creating a computerized system was spawned after he read a letter by Richard Donchian (founder of turtles) on utilizing mechanical trend following systems for trading and also Donchian's 5 and 20 day moving average system.

These are some of his popular quotes:

September 19, 2015

Example of complicated/ messy chart

How do you read this chart? Whatever indicator you use, it is sure to whipsaw.



BANK NIFTY weekly charts

- as expected BNF bounced off 15800, an area of strong support
- now expect resistance around 18000 levels
- this level will not be crossed immediately so expect rangebound trading
- trading range is 15800 - 18000


NIFTY weekly charts

- NF continues to trade in "falling channel"
- this is bullish WHENEVER it ends
- retest of recent lows is possible
- if this happens, high chances of rally to upper trendline
- overall, look for a range of 7500-8400 for NEXT few weeks
- option writing will give good clues so watch for updates



Janet Yellen invokes China 16 times in 1 hour

China is spooking the almighty U.S. central bank -- and investors.

Federal Reserve chief Janet Yellen mentioned the word China six times and "global" (read: China) 10 times in her press conference Thursday. It's is a big change for the Fed, which barely talked about global worries before.

"Heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets," Yellen said.

The fears were strong enough for the Fed to leave its benchmark interest rate at 0%, where it's been since the depths of the financial crisis in 2008. It wants more time to see how the global headwinds abroad play out at home.

Read/ watch more at http://money.cnn.com/2015/09/18/news/economy/china-yellen-global-economy-worry/

Analysis Paralysis


Stop jugaad, we need the long haul: Raghuram Rajan tells India Inc

Saying there are “no easy paths” to the top, Reserve Bank of India Governor Raghuram Rajan today urged corporate India to avoid what he called was the “jugaad” mindset, or “working around difficulties by hook or crook” and putting pressure for “quick impossible fixes.”

Instead, what was needed, he said, was a “discipline to stick to our strategy of building the necessary institutions and creating a new path of sustainable growth where jugaad is no longer needed.”

For this, Rajan said, “we need the understanding and cooperation of business, not impatience and pressure.” Delivering the C K Prahlad Memorial Lecture here today, Rajan said that jugaad ends up encouraging an “attitude of shortcuts and evasions, none of which help final product quality or sustainable economic growth.”

Rajan Rajan was speaking after the markets rose on the US Fed Reserve’s decision not to raise interest rates and the rupee hit a one-month high at 65.17 to the dollar. His remarks come 10 days after the Prime Minister met India Inc.

Do countries have core competencies? Raising this provocative question at the end of his lecture, Rajan used it to underline the long haul rather than the short cut. “If we say we want to focus on national core competencies, every industry will be out to show why it thoroughly fits the bill — in the same way as every industry today wants to tell us why they especially deserve special tax benefits or interest subventions.

Read more at http://indianexpress.com/article/business/stop-jugaad-dont-pressure-for-shortcuts-we-need-the-long-haul-rajan-tells-india-inc/


The Fed Is Trapped: The Naked Emperor's New "Reaction Function"

When China transitioned to a new currency regime last month, what should have been immediately apparent to everyone, was that the Fed was, from there on out, cornered. Boxed in. Trapped. Screwed. 
We reiterated this earlier today as the market still seems to be quite confused as to what exactly happened that caused Janet Yellen to resort to what many thought was the most unlikely option going into this week's meeting: the "dovish hold", or, as Deutsche Bank recently called it, the "clean relent."  
What follows is a recap of just how we got to this point or, in other words, an explanation of how the FOMC missed its opportunity and became trapped in the wake of China's move to devalue the yuan. Following the recap, we present excerpts from Citi's take on the Fed's "new reaction function. For those familiar with the backstory and/or who have a good grasp on why it is that the Fed went the route they did, feel free to skip straight to the section from Citi and the subsequent discussion.
*  *  *
How did we get here?
Read full article at http://www.zerohedge.com/news/2015-09-18/fed-trapped-naked-emperors-new-reaction-function

September 18, 2015

BHEL quarterly chart beautiful

BHEL trading between 180 and 300... trade accordingly.


CASTEXTECH lower circuit everyday from 14-JUL


PFIZER closes at lifetime high

PFIZER closes at lifetime high - stocks closing at new highs are better than stocks making new lows.


And this is the monthly chart


MOST PEOPLE ARE FIXATED ON BEING RIGHT ALL THE TIME

“Why do you think unsuccessful traders are obsessed with market analysis? They crave the sense of certainty that analysis appears to give them. Although few would admit it, the truth is that the typical trader wants to be right on every single trade. He is desperately trying to create certainty where it just doesn’t exist.” 

Mark Douglas

FED no hike creates hanging man

- good news is sold into
- let's see how markets react next week
- caveat: recent up trend is small/ lacks strength so pattern can be unreliable