December 10, 2018

NSE holidays for 2019

- there are 5 holidays falling on a Monday or Friday
- rest all are in middle of week

- enough time to take that break
- hopefully funded by the market

- on a different note, I will be completing 25 years of marriage on 19th April 2019. This day is a holiday!
- the irony is my wife is a Catholic and Good Friday is a day of mourning for Christians.


Read more at https://www.nseindia.com/content/circulars/CMTR39612.pdf

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 1.9% in negative at 10488
- AD was negative at 1:4
-VIX was flat in morning but increased by 10% towards close

- note my trend will turn down on close below 10430
- I expect recent lows to break.. let's see.

- trend has already turned down on lower degree timeframe charts

- option writing support 10000 resistance 11000

December 9, 2018

Which pharma stock to buy? CIPLA, SUN PHARMA or DIVISLAB

Simple rule.. buy stocks making new highs... not new lows.

Stocks making new lows are excellent shorts.

Note... I prefer long trades in stocks as upside is unlimited. But you must trade right.

CIPLA


Main benefit of technical analysis over fundamental analysis

... the main benefit of technical analysis over fundamental analysis is that the charts provide a very specific right or wrong point where protective stops can be placed and monetary losses can be limited. As you'll see shortly, the limitation of losses is paramount to the success of a trader and an investor, both financially and psychologically.

People may be forewarned of situations such as the collapses of Bear Sterns and Enron by the deteriorating price action. Knowing when one is wrong using fundamentals, though, is a very grey area. Depending on the style of analysis employed, the lower a share price goes below its valuation may mean the better value the stock becomes. On the other hand, it may mean the valuation was incorrect to begin with. It's a hard ask for any analyst to amend his or her analysis and valuation in the face of a plunging share price – they are usually only forced do so after the fact and after the monetary damage is done.

Read more at http://www.vfmdirect.com/info/successful_stock_trading.pdf

This options trader has a unique strategy to double money in 2 years — check it out

I went to the US and got trained with the best. I enrolled for a course with SMB Capital founded by Mike Bellafiore author of One Good Trade and The Playbook, for a structured program in trading. I also went through the course offered by the famous Dr. Van Tharp.

SMB has a very intensive and structured training program where they take you through the entire trading process. We worked from 6.00 in the morning to 9.30-10.00 pm every day. Those under training were attached to one of the 6-7 super traders who were all multi-million dollar traders.

Every morning the super traders came up with a list of what was called ‘stock in play’. These were based on analysis and certain setups which picked up stocks that the team felt was likely to see increased activity during the day. The team leader would then discuss it with his team and how they should handle it.

These were generally intraday or swing trades which the traders held for 2-3 days. I was not comfortable with this trading style. One day, during lunch Seth Freudberg who was heading the options desk asked me if I had ever traded options. Since I had not he asked me to try it out.

I took to options more easily and learned many commonly used and proprietary strategies used by traders in SMB Capital under the mentorship of Seth.

Dr. Van Tharp’s training helped me with the psychology aspect. The training session helped in analyzing myself, to understand my strength and weakness. It helped clear up the path in for me in knowing what kind of trades I can do and what I cannot. For me one of the main takeaways was I knew what not to trade. Another important thing I picked up was the importance of position sizing.

These training helped cut down my learning curve by at least 3-4 years.

I traded the US markets for nearly two years and along with it the Indian markets. However, I soon realized that trading options in Indian markets are different than that in the US markets. Strategies that worked very well in the US markets were not giving the desired returns in India.

The main reason for this is the strange margining system we have in India. In a defined risk strategy, say a spread, the margin to be paid in the US was the spread between the strikes, but in India complete margin on both the legs of the trade is needed. This makes a number of strategies like the butterfly or the Iron Condor unattractive.

As trading both the US and Indian markets was stressful I decided to hone my skills in the Indian market.

Read more at https://www.moneycontrol.com/news/business/this-options-trader-has-a-unique-strategy-to-double-money-in-2-years-check-it-out-3267041.html

For many of his trading strategies, I strongly recommend following his twitter handle at https://twitter.com/KatariyaPran

The only reason to buy a stock




December 8, 2018

Best way to identify winning stocks @iManasArora




NIFTY weekly charts

- probable H&S being formed
- right shoulder under progress
- neckline 10000

- if neckline breaks, retest of 9000 possible

BANK NIFTY technicals

- trend is up
- swing high/ resistance at 27000
- immediate support 26000

December 7, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.9% in positive at 10694
- AD was negative at 7:10

- option writing support 10000 resistance 11000

As expected, US markets take support at lower end of trading range

Link: https://www.vfmdirect.in/2018/12/us-markets-near-lower-end-of-trading.html


Indian markets too are at lower end of trading range... expecting good support at 10500


December 6, 2018

Nifty 200 stocks signal

Stock nameCloseChange20 Day Swing IndicatorLast Month's52 week
TrendDateStoplossReversalHighLowHighLow
||||| AMARAJABAT703.05-0.50%SELL06/12/18748.70783.10807705908687
||||| AUROPHARMA752.35-5.50%SELL06/12/18830.45830.45822759830527
||||| BALKRISIND894.60-4.00%SELL06/11/181010.951039.0011909231454892
||||| GRASIM795.00-3.50%SELL03/10/18883.00891.708927951261756
||||| ICICIGI902.151.00%BUY01/11/18785.00785.00865785932639
||||| ICICIPRULI308.20-3.00%SELL06/12/18330.80363.90364315462305
||||| IGL252.55-2.50%SELL04/12/18274.15287.70294259345215
||||| INDIANB216.15-2.50%SELL28/08/18234.00269.70270220406210
||||| IOC130.75-2.50%SELL19/03/18143.00155.50156132214105
||||| ITC273.05-0.50%SELL11/09/18290.00290.00290273323252
||||| M&MFIN400.85-4.50%SELL06/12/18455.50455.50454409534343
||||| MANAPPURAM79.50-3.50%SELL06/12/1887.7088.40887613066
||||| MUTHOOTFIN420.65-5.50%SELL06/12/18466.30472.90473410484356
||||| NATIONALUM63.10-2.50%SELL21/09/1868.8071.5072649057
||||| OIL180.40-1.50%SELL05/10/18207.25207.25207185259180
||||| PAGEIND24213.75-3.50%SELL08/10/1828150.0030500.0030500249113637018001
||||| PCJEWELLER64.55-4.50%SELL06/12/1879.8099.001005960147
||||| PNB66.10-4.00%SELL06/12/1873.4074.30796719758
||||| RPOWER27.70-4.50%SELL06/12/1831.9532.7033296523
||||| TATASTEEL510.20-1.00%SELL06/12/18553.60610.60611512793493
||||| TV18BRDCST34.15-2.50%SELL30/08/1836.6538.6039347132
||||| UNIONBANK73.55-3.00%SELL06/12/1882.7084.60857515761

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US markets near lower end of trading range


USD INR chart

- after breaking out from 69, the currency rallied to 74.5 before correcting
- it is now retesting the breakout level
- since correction is likely to be limited from here on, a new rally should start


Expanding triangle on nifty charts

- this is the hourly chart
- lower trendline to provide support
- one can also assume H&S where RS has yet to start


The 4 hour chart provides a better context to the triangle

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 1.7% in negative at 10601
- AD was 1:3

- option writing support 10000 resistance 11000

- expecting support around 10500

- tomorrow, first hour low very important

December 5, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.8% in negative at 10785
- AD was 5:12

- this is 2nd day of lower high  lower low

- swing low support 10500

- option writing support 10000 resistance 11000

Short signal on #NIFTY hourly charts SL 11000

NIFTY 60 min charts

- trend will reverse on close below 10850 F
- SL 10950 F

NIFTY 30 min charts

- trend will reverse on close below 10850 F
- SL 10950 F

Nifty 50 (India) is poised to roll-over in a decline to 8259




December 4, 2018

SHANKARA - Lofty targets but stock still going down




Here is the chart... from 1800 to 600 in less than 6 months.

ICICI Direct recommendations are amusing to say the least.




BANKNIFTY intraday charts

15 min charts:
- trend is down
- reversal level 26900



Market outlook

Daily chart:
- trend is up on daily chart
- today NF closed flat at 10870
- AD was slightly negative

- option writing support 10000 resistance 11000

ICICI Securities, BSE launch ‘instant payout’ facility

Clients to get payment within 30 minutes of shares sale

ICICI Securities, along with the BSE, has launched a facility wherein clients of the domestic brokerage entity would be able to receive the pay-out within 30 minutes of selling the shares. This is much quicker than the current system in which it takes at least two days after the transaction for investors to get the money in their bank account.

The facility, called eATM, was launched on Monday and is available to all clients of ICICI Securities. The new service would have a cap of 50,000 per client a day, and would be applicable on about 600 stocks listed on the BSE. “Retail investors can get near real-time access to money in their bank account when they sell shares on the BSE, instead of the usual waiting period of T+2 days under the current settlement system,” ICICI Securities said in a statement.

Incidentally, the service would be offered free to all investors. However, there would be a cost component for the brokerage, as the pay-out from the exchange would happen only on a T+2 basis. ICICI Securities said it believed that the costs would be offset by the new client accounts that the facility would help it in acquiring.

Read more at https://www.thehindu.com/business/icici-securities-bse-launch-instant-payout-facility/article25656923.ece

2018 till Now – Random Portfolio down 20-40%. Market Returns are not Linear !!

Random Portfolio – 2018

We have been doing Random Portfolio exercises for the last few years. We started looking at this interesting topic almost 3 years back and could make a template with the help of my friend Prashant Krish and now my team mate Harsh Doshi does the iterations for the last couple of years.

Every time we have a fantastic year we do this exercise to tone down the emotions which come along with a great year. This time after a bad year this exercise is a consolation that the market has been bad for many.

Random Portfolio Selection Filter

•The only filter was stock should be above 10 rs and listed on NSE. ( to remove unusual big movers or duds )

•25 stocks selected randomly ( rand between function) with an equal weightage of 4%.

•Time Period – Last 6 months and Year to Date.

•No shuffling of stocks. Just buy and hold.

•No brokerage applied.

We created 5 random portfolios on the above selection criteria.

Lets look at returns of Random Portfolio for YTD 2018
01-01-2018
28-11-2018
Portfolio
Initial Equity
End Equity
%  Returns
Random Portfolio 1
1000000
648578
-35.14%
Random Portfolio 2
1000000
611148
-38.89%
Random Portfolio 3
1000000
653878
-34.61%
Random Portfolio 4
1000000
688377
-31.16%
Random Portfolio 5
1000000
763675
-23.63%
Average Returns (%)

-32.7%

Read more at http://www.nooreshtech.co.in/2018/12/2018-till-now-random-portfolio-down-20-40-market-returns-are-not-linear.html

December 3, 2018

Nashik farmer gets Rs 1,064 for 750kg of onion, sends earnings to PM




Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed flat at 10884
- AD was flat
- VIX dwn 5%

- stiff resistance seen around 11000

- global markets were up 2% but the gap in Indian markets was immediately sold into

- option writing support 10000


Amusing Advice from Saurabh Mukherjea

Amusing advice from a Saurabh Mukherjea who frequents TV channels and used to publish research reports & forecasts at Ambit.



Source: http://alphaideas.in/2018/12/03/amusing-advice-from-saurabh-mukherjea/

Six Years With a Distraction-Free iPhone

When the iPhone came out, in 2007, it was shiny and beautiful and cool and I flat-out wanted one. But I needed a justification, so I convinced myself that I needed it for work. After all, the iPhone had email, a web browser, and even a stocks app — this was a serious tool for serious people!

So I got an iPhone, and just like that, I signed myself up to check and respond to email wherever, whenever. No pay raise, no new job title, not even a request from my boss. For me, this was a 100% self-inflicted responsibility because I wanted a shiny object.

Over the years, as new apps came out — Facebook, Instagram, news, games, etc — I installed them. They were shiny, they were free, and they helped me “get my money’s worth” out of my phone. Every app created new responsibilities. More inboxes to check and more feeds to read. Every app latched onto my brain, tethering my phone to my skull with invisible string.

Read more at https://medium.com/s/story/six-years-with-a-distraction-free-iphone-8cf5eb4f97e3

December 1, 2018

NIFTY options open interest analysis (updates)

- highest OI in all options is at 10000 PE, 10200 PE, and then 10500 PE
- my guess is 10500 PE will eventually have highest OI
- surprised to see large OI at 11000 PE... this is rare
- highest OI in calls is at 11000 CE... this is not surprising

- overall bias is bullish/ limited downsides

- this is the view of option writers and can change anytime
- note that option writers can be wrong and still make money

- I am observing many retail traders are doing option writing past few months and getting slaughtered in the process
- option writing is not for everyone... learn the greeks first, risk management etc etc



Note:
- earlier chart had scaling limitations which has now been increased
- charts/ data is sourced from http://opstra.definedge.com

FnO revised lot size from January 2019!




Sensex at key resistance while nifty has yet to reach that level

- equivalent level for nifty is 11200
- support 34800
- if support breaks in faster time and with high volumes, it may mean RHS is getting completed.



CNX AUTO technicals

- trend is down
- index in freefall ever since it broke 10500
- sustaining above 9400 can impart some bullishness


CNX Pharma technicals

- trend is down
- lot of support coming in at lower levels

- falling wedge formation seen

- strong resistance around 10000 levels


CNX IT technicals

- trend is down
- good support around 13600
- bullish above 15100


NIFTY weekly and monthly charts

Weekly charts:
- trend is down
- support 10000 resistance 11150
- probable H&S formation; right shoulder being formed

BANK NIFTY daily, weekly and monthly charts

- trend is up on daily charts
- swing low support around 26000
- resistance around 27200-27800

November 30, 2018

Climate change scientists - Intellectual yet Idiots




The Intellectual Yet Idiot


What we have been seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking “clerks” and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think… and 5) who to vote for.

But the problem is the one-eyed following the blind: these self-described members of the “intelligentsia” can’t find a coconut in Coconut Island, meaning they aren’t intelligent enough to define intelligence hence fall into circularities — but their main skill is capacity to pass exams written by people like them. With psychology papers replicating less than 40%, dietary advice reversing after 30 years of fatphobia, macroeconomic analysis working worse than astrology, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating at best only 1/3 of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers (or Montaigne and such filtered classical knowledge) with a better track record than these policymaking goons.

Read more at https://medium.com/incerto/the-intellectual-yet-idiot-13211e2d0577

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed flat at 10877
- AD was flat

- 5 stocks made 52 week high while 87 stocks made 52 week lows... not good

- separate post on open interest later in the evening

November 29, 2018

Ratings is the biggest scandal going - sab golmaal hai

The market regulator has specified that mutual funds have to buy only highly rated paper. So, how did the fund companies manage it? With pliant rating agencies, this is no problem. The ratings have been rated AAA by the same ratings agency, CARE, which also rated the Rana Kapoor’s structure as AAA. Commenting on this a very high net worth investor says “ratings is the biggest scandal going.”

This structure of using public funds for lending against the promoters’ holding is fraught with huge risks. The mutual funds are holding a debt paper of the holding company with no other assets and no capital worth speaking of. They have no recourse to the shares of the promoters either—the only asset of the holding company—because these are not pledged to the mutual funds. The promoters are free to sell them. If they do, funds have no recourse.

Read more at https://www.moneylife.in/article/mutual-funds-have-also-lent-to-dhfl-promoters-holding-company-just-like-yes-banks-rana-kapoor/55811.html

Hot stocks and charts

LAST updated: 28-NOV-2018 
ABB
ABB chart

November 28, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.4% in positive at 10729
- AD was 6:11

- option writing support 10000 resistance 10800

Figure out what will ruin you - risk management - golden words




November 27, 2018

Long term nifty chart by Peter L Brandt