June 25, 2018

Traders Carnival: Jegan On The What, How, Why Of Options Writing

Jegan is an option trader and trainer. You can read more about him at http://itjegan.blogspot.com/

This video was recorded at Trader's Carnival 2018 in Mumbai.

Hot stocks and charts

LAST updated: 25-JUN-2018 

Market outlook

Daily charts:
- trend is down on daily charts
- today nifty closed 0.6% in negative at 10762
- AD was 1:3
- option writing support 10700 resistance 11000

- note nifty is taking support at lower trendline of rising channel

Prathmesh Godbole: Journey of a trader who likes to keep it simple

Q: What has been the outcome of the studies, how do you trade?

A: The outcome is a very simple process. I trade on two strategies. One is an intraday strategy using a one hour chart and the second one is a slightly longer timeframe strategy where I use the four-hour candle to trade. In the second strategy, I only use the Nifty futures to trade while in the first one I pick up liquid stocks from Nifty 50.

Both the strategies are more or less the same in principle. In the intraday strategy, I look for a big candle on the first hour, whose closing should ideally be above the previous day’s range. I take the trade above this candle with a 1:3 risk reward ratio. If the first candle is too big I wait for the second candle to form that offers a better risk-reward to trade. Like there was a trade I recently took where the first bar would have meant that the stop loss was nearly 2.5 percent away. I waited for the next bar which reduced the risk to 0.3 percent.

Normally this strategy does not throw up a trade every day, generally, it is around 2-3 trades in a week. Every month there are 4-5 stocks that have a strong trend.

But I have seen that at times I get in at the start of the trade...

Read more at https://www.moneycontrol.com/news/business/markets/from-nyu-to-trading-indian-markets-journey-of-a-trader-who-likes-to-keep-it-simple-2624931.html

Cup and Handle on NIFTY?

What is a cup and handle pattern?

What can a financial crisis lead to

Secret Dairy of Sanjay Lalbhai...nice read

It’s a huge weight to belong to such an illustrious family — especially when your history goes back almost 400 years and your great-great-great grandfather has been a part of Akbar’s court. But we were never made to feel like we had to live up to the past. We were given complete freedom to chart our own course. It was, of course, overwhelming to see top politicians walk in, including the likes of Prime Minister Jawaharlal Nehru, but then again, we were among the top 20 industrial houses in the country.

Growing up in that huge house, with a lush green lawn and a Chevrolet — the trappings of luxury were all there. Yet, I went to school on a cycle. My friends came from less privileged backgrounds, many lived in a one room-kitchen. And it never felt uncomfortable because the family never qualified who could be a friend. When the home-cooked food was laid out, I found a spot on the floor, just as hastily as the others and ate my fill. Maybe it was because dadaji lived a Gandhian lifestyle himself.

What a stickler for time he was! Dinner used to be served at 7 pm sharp. If you were late, you had to go hungry.

Read more at https://www.outlookbusiness.com/specials/secret-diary-of-an-entrepreneur_2018/there-are-no-exemptions-in-life-4413

June 23, 2018

NIFTY weekly technicals

- nifty at upper end of falling channel
- if channel is proven correct, then retest of lower trendline possible in next few months
- if not, then anything can happen (rangebound, new high, new high + rangebound, etc etc)

BANK NIFTY technicals

- trend is up
- index is rangebound between 25640 and 27000 for more than a month

Pedophrasty, Bigoteering, and Other Modern Scams (read FAKE news)

Pedophrasty: Argument involving children to prop up a rationalization and make the opponent look like an asshole, as people are defenseless and suspend all skepticism in front of suffering children: nobody has the heart to question the authenticity or source of the reporting. Often done with the aid of pictures.

Can also describe the exploitation of babies by professional beggars who rent them from their parents and use them as potent appendage in their trade(remember that children tend to grow and need to be replaced).

Pedophrasty is effective as it provides arguments to strike before the evidence is formed. People are moved into “doing something”.

Pedophrasts prey on our maternal (and paternal) instincts.

Pedophrasty has its most effects on actors, journalists and similar types who are intellectually insecure, deprived of critical judgment, and afraid of being classified as violators of some norm of political correctness. For instance, pedophrasty has been commonly used in the Syrian war by such propagandists as Julian Roepke continuously supplying the German public with pictures of dead children. Or the various lobbies hired by Saudi Barbaria (and allies), such as the Middle East Institute in Washington DC, to promote Sunni Islamist policies under the cover of “think tanks”.

Read more at https://medium.com/incerto/pedophrasty-bigoteering-and-other-modern-scams-c84bd70a29e8

Excellent example:

June 22, 2018

Hot stocks and charts

Hot stocks

LAST updated: 22-JUN-2018 

Market outlook

Daily charts:
- trend is down on daily charts
- today, NF closed 0.75% in positive at 10837
- so far, lower trend line is still providing support
- AD was flat (slightly negative)
- option writing support 10700 resistance 11000

Why the smartest people in the world have tons of books they don’t read.

Image result for bookshelf staircase

If you love to read as much as I do, walking into a bookstore as an adult feels exactly like walking into a candy store as a kid.

The shelves are lined with the wisdom of humanity, insights that each author has spent years refining. It’s all right there at your fingertips, condensed into a format that you can curl up with.

So naturally, you pull out your credit card or press the ‘Buy Now’ button.

And the books pile up. On your shelves. In your bedroom. In your car. Maybe even your bathroom.

The most dedicated book addicts find space where there was previously none:

And as the books pile up, so does your guilt. Guilt at not reading all of the books you buy. Guilt at not finishing the books you start.

If this describes you, I have good news for you.

Read more at https://medium.com/the-mission/the-way-you-read-books-says-a-lot-about-your-intelligence-find-out-why-c2127b00eb03

(Long) Tails, You Win

By the mid-1930s Disney had produced more than 400 cartoons – most of them short, most of them liked, and most of them losing money. Disney and his studio were nearly broke.

Snow White and the Seven Dwarfs changed everything. The $8 million it earned in the first six months of 1938 was an order of magnitude higher than anything the studio earned previously. It transformed Disney Studios. All company debts were paid off. Key employees got retention bonuses. The company purchased a new state-of-the-art studio in Burbank, where it remains today. By 1938 Walt had produced several hundred hours of film. But in business terms, the 83 minutes of Snow White was pretty much all that mattered.

Long tails drive everything. They dominate business, investing, sports, politics, products, careers, everything.

Rule of thumb: Anything that is huge, profitable, famous, or influential is the result of a tail event. Another rule of thumb: Most of our attention goes to things that are huge, profitable, famous, or influential. And when most of what you pay attention to is the result of a tail, you underestimate how rare and powerful they really are.

Read more at http://www.collaborativefund.com/blog/tails-you-win

Derivatives Rejig in India May Spur Squeeze in Beaten Up Stocks

Bears in some Indian companies, including a supplier of gas to homes and cabs in Mumbai, risk getting caught out when exchanges move to physical settlement of stock derivatives next month, says Emkay Global Financial Services.

The brokerage sees potential for a “short squeeze” in seven of 45 stocks whose contracts will be physically delivered July expiry onward. The companies have been analyzed based on valuations, open interest, institutional holding and price movement over past few months, Emkay said in a note this week.

Shares of BEML Ltd., a maker of earth-moving equipment, CG Power and Industrial Solutions Ltd., Mahanagar Gas Ltd., Godrej Industries Ltd., NHPC Ltd., Siemens Ltd. and Gujarat State Fertilizers & Chemicals Ltd. have slumped between 20 percent and 50 percent this year amid a selloff in the broader market. Traders will now be deterred from piling on bearish wagers on stocks that are already beaten down, according to Emkay.

Read more at https://www.bloombergquint.com/markets/2018/06/22/derivatives-rejig-in-india-may-spur-squeeze-in-beaten-up-stocks

Here's How PR Sundar Made Money by Trading in Bank Nifty Options on Expiry Day

June 21, 2018

Open interest distribution

Will 10700 break this series? Let's see...

Market outlook

Daily charts:
- trend is down on daily charts
- today NF closed 0.3% in negative at 10741
- AD was 1:2
- option writing support 10700 resistance 11000

- break from rising channel can lead to retest of 10400 levels

June 20, 2018

Market outlook

Daily charts:
- trend is down on daily charts
- today, NF closed 0.6% in positive at 10772
- AD was flat
- option writing support 10700

- lower trendline is offering support

In Charts: India’s Stock Market Is Driven By Traders From One City

A record number of Indians now have demat accounts but India remains a traders’ stock market driven by one city: Mumbai.

The nation’s financial capital consolidated its hold on the stock market trading, according to data from the regulator’s Handbook of Statistics 2017. The city’s share in turnover has grown for BSE Ltd., bringing it on a par with that of the National Stock Exchange, India’s largest bourse. Top six cities now account for over 71 percent of BSE and 84.5 percent of the NSE’s turnover.

Read more at https://www.bloombergquint.com/markets/2018/06/19/in-charts-indias-stock-market-is-driven-by-traders-from-one-city