December 11, 2019

Gormint Mathematics

December 10, 2019

CSB below listing after getting listed at 40% premium

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.7% in negative at 11857
- AD was 5:13

- option writing resistance 12000
- swing low around 11800 spot

- note trend is already down on hourly charts

NOV 2019 was best month for the two wheeler industry



Read complete thread at https://twitter.com/JEEVANRATH/status/1202932886866776069

December 9, 2019

Learn Renko Charts from experts at nominal fees

This is what a typical option writing trade would look like

Net MF inflows at lowest in NOV 19

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed flat at 11937
- AD was 7:11

- option writing resistance 12000

- VIX up 8% today
- of late, this is showing wild swings

10 Things (Foreign) Fund Managers Say and What They Actually Mean

“What we have witnessed is a 10 standard deviation event”

“This didn’t show up in our backtest”




“The rise of passive investing and quantitative easing has materially distorted how markets function”

“Performance hasn’t been great”.



 “Cognitive diversity is incredibly important to us” 

“We have one woman on the team”.


Read more at https://behaviouralinvestment.com/2019/12/04/10-things-fund-managers-say-and-what-they-actually-mean

Why is diesel demand contracting in India

India’s demand for diesel is slowing as the country’s car fleet shifts predominantly to gasoline, trucks get more efficient and solar pumps displace diesel-fed units across the countryside.

The combination of these changes has led analysts, academics and company officials to speculate that diesel demand growth in the world’s third-largest crude oil consumer may have peaked, with significant repercussions for the firms that produce and sell the fuel.

WHY HAS DIESEL DEMAND FALLEN?

In addition to the longer term trends mentioned above, 2019 diesel demand was also curtailed by a prolonged monsoon which brought rural demand to a near standstill this autumn.

Widespread flooding hampered mining, construction and freight movement across parts of the country.

Slowing factory output also stymied diesel demand.

India’s industrial output fell at the fastest pace in more than six years in September, while power demand in October posted its steepest decline in over 12 years.

Read more at https://in.reuters.com/article/india-diesel-explainer/explainer-why-indias-diesel-demand-is-contracting-and-what-it-means-idINKBN1Y80BL

December 7, 2019

Asit Baran Pati | An options buyer journey to financial freedom

............. The ‘Probability of Profit’ also known as POP in the trading world is only around 30 percent for an option buyer. POP is the probability of an option closing ITM on expiry. It also indicates that a trader will make a profit or barely breakeven only 30 percent of the time. This is also the reason why option selling is catching up as their POP is 70 percent.

In trading, POP is all that matters. For an option buyer, it goes down with time and for an option seller, it increases with time. Thus, for an option buyer, it becomes imperative to trade only when the momentum is good. The Greek gods that an option buyer can worship are Delta and Gamma while Theta is their biggest enemy.

An option buyer should not hold his position for a long time as Theta or time decay starts playing on the position and erodes its value. Secondly, an option buyer should buy such an option which has more intrinsic value than extrinsic value – which means a slightly in-the-money (ITM) contract. Further, your timing should be such that the momentum is strong and is building up. One needs to exit the trade as the momentum slows down. The only way an option buyer can end up with a winning trade is if the underlying stock or index moves significantly in his direction.

If you are buying option in a trending market the Greeks Delta and Gamma in an option premium will ensure that they not only nullify the effect of Theta but also overpower it. I always enter a trade where the momentum is about to enter an active zone..........

Read more at https://www.moneycontrol.com/news/business/markets/asit-baran-pati-an-options-buyer-journey-to-financial-freedom-4708501.html


What fund managers said and what they meant

NIFTY weekly charts

- trend is up
- this week was a full bar reversal of prev week bar
- close was below 12000

BANKNIFTY charts

- trend is up
- support 31000

- on hourly charts, BNF is in sell mode with SL 32200 spot

Will new/ increased GST rates lead to "stagflation"?

Stagflation = stagnating economy + persistent high unemployment and inflation

Stagnating economy = declining GDP, IIP, demand, reducing consumer spending etc

This is a nightmare because measures designed to solve one problem usually lead to another bigger problem.

Now GST rates are being increased because of falling tax revenues (drop in demand). Increase in GST rates will be lead to higher inflation and even more reduced demand thus creating a vicious circle.



Read more at https://economictimes.indiatimes.com/news/economy/policy/gst-rates-set-to-increase-as-council-eyes-major-revamp/articleshow/72410952.cms

Sebi scans matrimonial website to nail fraudster in front-running case

Sebi found out that the PAN provided by Avi was registered in Vaibhav Dhadda's name. His passport details named Alka Dhadda as his mother. Further, his profile on the matrimonial site showed Alka as his mother. Also, she used the email id avidhadda92@gmail.com.

The market watchdog said Vaibav was operating from Hong Kong and had access to the trading accounts of his mother and his sister Arushi.

The market regulator pointed out that there was aprima facie case of a trading pattern that had emerged in the accounts held by Arushi and Alka. It claims that the Dhaddas' modus operandi was to start picking up a stock just ahead of a buy placed by a Fidelity group entity on the same scrip. Likewise, the family would start sellling a particular stock just ahead of a sell order placed by the Fidelity company on the same scrip.

Read more at https://www.business-standard.com/article/markets/sebi-scans-matrimonial-website-to-nail-fraudster-in-front-running-case-119120501537_1.html

December 6, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.8% in negative at 11888
- AD was 5:12

- swing low support around 11800

- wild swing observed in VIX for past few days
- today it ranged from -9 to + 3 creating havoc in option pricing

- option writing resistance 12000


Worrying trend in personal loans and unsecured credit

Millennial lives and the new age debt trap

...A few months after Mahapatra’s first brush with new-age credit, he got to know that many of his friends who’d also taken loans from the same fintech firm had started getting calls from recovery agents. “Their pocket money wasn’t enough but they didn’t realize how high the interest was. They hadn’t even informed their parents. The interest kept mounting and they were just not able to repay," he says.

Mahapatra gave Mint access to a WhatsApp group where students and young professionals, who have been unable to repay their loans, discuss the harassment they’re dealing with. “When I saw the torture people on the group were subjected to, I closed my ongoing loan and uninstalled the app. The problem is huge and has penetrated deep within the student community," says Mahapatra. One of the members of the WhatsApp group, Kishore (name changed), is a 21-year-old student preparing for MBBS in Kota, Rajasthan. Kishore would take loans from the fintech firm very often to meet his lifestyle expenses: from going out with friends, ordering take-out food, and so on. But the last time he borrowed ₹2,000, he wasn’t able to repay.

“I am a student. How can I repay if the amount keeps increasing?" says Kishore. The fintech firm tried to recover the loan, but when Kishore still didn’t pay his dues, he started getting calls from recovery agents. “The agents are threatening to inform all the contacts on my phone about the default. They can do this because I’d given the app access to my contacts. I’d also uploaded a video on the app promising to repay all my loans on time and accepting all the terms and conditions. The agents are blackmailing me with this," says Kishore.


Read more at https://www.livemint.com/news/india/millennial-lives-and-the-new-age-debt-trap/amp-11575474961876.html


December 5, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.2% in negative at 12018
- AD was 4:5

- VIX was volatile... up 12% one time, it closed marginally in negative
- VIX has been volatile past few days

- today was weekly expiry day
- as expected, this happened between 12000 and 12100

- bias is bullish for next week with 12000 expected to hold