July 31, 2018

BANK NIFTY monthly charts

- trend is up
- support 23600

NIFTY monthly charts

- trend is up
- 10000 is the new swing low
- don't think 10000 will break this year

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.3% in positive at 11356
- AD was 10:7
- option writing support 11000


You're not going to make just one trade.




Supertrend indicator at chartink.com

Chartink is supporting supertrend indicator. Those unable to use kplswing can use this as a rough approximation.

I am using default setting (whatever they are) as I see no need to change them.

Keep risk per trade under 1% of capital. Expect half the trades to fail.

Here are 2 charts for nifty... this will help positional traders for SL and exit strategy.

July 30, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.4% in positive at 11320
- AD was 11:6
- option writing support 11000

- small hanging man formed. Not giving too much importance to it right now

Time is ripe for second interest rate hike as inflation risks mount

India's central bank is on course to raise interest rates for a second consecutive policy meeting as it takes more decisive steps to rein in inflation and stem capital outflows.

With inflation running well above the central bank’s medium-term target of 4 per cent -- and the outlook set to worsen as oil prices stay elevated and the currency slides -- pressure is building on the Reserve Bank of India to act. Bond investors are already taking shelter in shorter-term debt amid concern this could be the start of a tightening cycle.


"It's a great time for the RBI to hike rates because people are worried about inflation and growth numbers are looking good,” said R Sivakumar, head of fixed income at Axis

Read more at https://www.business-standard.com/article/economy-policy/time-is-ripe-for-second-interest-rate-hike-as-inflation-risks-mount-118072900065_1.html

July 29, 2018

A part-time trader who uses time and risk management successfully at his job and in the market

... Unlike other traders, Santosh does not look at a technical chart before entering the first leg of his trade. Instead, he looks at volatility to enter option trades.

Son of a Naval officer, Santosh’s story is all about leveraging time. He has multiple certifications needed for his profession, some which very few in the industry have. He has undergone the highest level of training needed to be a trader, he has revived the Option Oracle software by learning the language in which it was built, a package which was lying secluded in the cyberspace. He regularly teaches traders the skills needed to be an options trader. As if this was not enough he makes time to get high-level certifications in ice skating and scuba diving.

In an interview with Moneycontrol, Santosh Kumar Pasi speaks on his approach to options trading, how he uses time in his trading and his software, among other things. Edited excerpt:

Read more at https://www.moneycontrol.com//news/business/moneycontrol-research/a-part-time-trader-who-uses-time-and-risk-management-successfully-at-his-job-and-in-the-market-2774651.html

Easy hack?




Richard Feynman: the genius of simplicity

Image result for richard feynman
May 11th, 2018 marked what would have been the hundredth birthday of theoretical physicist Richard Feynman. Many physicists name Feynman, who passed away in February 1988, as their primary inspiration in the field and science enthusiasts all over the world frequently quote Feynman’s dry wit and blunt wisdom. According to a poll of scientists conducted by Physics World in 1999, Feynman was amongst the top ten highest regarded physicists, sharing acclaim with Einstein, Galileo and Newton. But what is it about the man that captivates so many?



There are many valid responses, his undying curiosity, his naive wonder and desire to understand how things worked, his lack of deference to authority and rebellious spirit. Another common answer may surprise you as it involves a quality rarely associated with physics or science in general for that matter.

Simplicity. Feynman’s genius lay in his ability to understand and present complex ideas in an intuitive and natural way. It is the reason Feynman remains an inspiration. He would exemplify this concept many times during his career, but never more so than in the development of his Feynman Diagrams. Simple line drawings that depicted complex sub-atomic interactions.

Read more at https://medium.com/@roblea_63049/richard-feynman-the-genius-of-simplicity-7f8610482414

NSE Asks Clients To Get Ready For Derivative Trading Till 11:55 P.M.

India’s largest exchange plans to start extended trading subject to approval from the regulator some time in October, it said in an email to clients. The bourse shared a “skeletal framework” for trading till 11.55 p.m.—nearly seven hours more than now.

According to the framework:

  • There shall be two trading sessions with a break of about 60-90 minutes.
  • The first session would be between 9:15 a.m. and 3:30 p.m.

The First Session

The exchange would allow trading to continue from the previous day’s second (evening) session. That’s because it doesn’t want its members to settle trades in the night. Moreover, there would be thin trading on most days in the night, said a senior NSE official on condition of anonymity.

Trade modification will be allowed till 4:00 p.m. and all orders outstanding after 3:30 p.m. would be cancelled, as is the case now. More details would follow in a separate circular, the exchange said.

The Second Session

Read more at https://www.bloombergquint.com/markets/2018/07/24/nse-asks-clients-to-get-ready-for-derivative-trading-till-1155-pm#gs.bU00Nzg

July 28, 2018

Learn Point & Figure charts and know how to trade them



NIFTY P&F chart... see solid support around 10000. Also, 11000 will offer good support in AUG series.



CNX MIDCAP charts

- I am bullish on this index past few weeks
- expect a blast above 19200 (resistance)

NIFTY weekly charts

- trend is up on weekly charts
- this week, NF closed 2.4% in positive at 11278
- this was highest ever closing

- rally possible to 12000



BANK NIFTY technicals

- trend is up on daily and weekly charts
- this week, BNF closed 3.2% in positive
- closing was at all time highs
- swing low support is now at 26600 and then at 26000


July 27, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today, NF closed 1% positive at 11278
- closing was at all time high
- AD was 2:1


Swing trading signals :: 26-JUL-2018

  • This report is for your personal use only and is valid for next trading day.
  • Signals are generated using the kplswing indicator.
  • Algorithm: BUY signal is generated if a stock closes above 20 days high.
  • Stock name is highlighted in case of first signal of the trend.
  • Exits: There are no targets and exits are based on a trailing stoploss. Returns are whatever the market gives - 20%, 100%, etc.
  • Stoploss: use fixed SL to limit losses and trailing SL for profit booking.
  • Trailing SL: For long positions, use weekly low or 10 days low.
  • Click on stock name link for charts, more info etc
  • Limit investment per stock to 3% of trading capital or limit loss per trade to max 1% of your trading capital.
  • Important: Trade in cash only and never in futures.
  • Liquidity filter: ||||| good liquidity - ||||| excellent liquidity. Avoid stocks with ||||| low liquidity.
This information is for your study only and is not a recommendation to buy or sell

All signals:

Buy signals: ABCAPITAL - ACC - ALBK - AMBUJACEM - BANKBARODA - BANKBEES - BANKINDIA - BANKNIFTY - BATAINDIA - BIRLACORPN -GODFRYPHLP - GRANULES - GRASIM - ICICIBANK - ITC - KEI - LEMONTREE - LTTS - M&MFIN - MOTHERSUMI - NIFTY - NIITTECH - PETRONET - PFC -PNBHOUSING - RAMCOCEM - RECLTD - REPCOHOME - SANOFI - SRTRANSFIN - SYNDIBANK - TORNTPHARM - UNIONBANK - VIJAYABANK - WELCORP -
Sell signals: COLPAL - PHOENIXLTD - TVSMOTOR -
Stocks gaining >5%: AMBUJACEM - BANKBARODA - BANKINDIA - CANBK - CENTENKA - DBL - GRANULES - INDIANB - IRB - LEMONTREE - LTTS - M&MFINMAGMA - MUTHOOTCAP - ORIENTCEM - ORIENTELEC - PNCINFRA - PRAKASH - PRSMJOHNSN - RECLTD - SBIN - SRTRANSFIN - SYNDIBANK -VIJAYABANK - WELCORP -
Stocks losing >5%: AVANTIFEED - BAJAJELEC - HARITASEAT - HATHWAY - INTELLECT - KWALITY - NAUKRI -
Stocks at 52 week high: ADANIGREEN - BAJAJFINSV - BATAINDIA - BHARATFIN - CIGNITITEC - HAVELLS - HDFC - IBVENTURES - ITC - NEXTMEDIA -NIFTY - NIFTYBEES - NIITTECH - PFIZER - RITES - SANOFI - TALWGYM - TATAELXSI -
Stocks at 52 week low: 8KMILES - APARINDS - BAJAJ-AUTO - BVCL - GICRE - GOKUL - INDIGO - JAGRAN - KELLTONTEC - KESARENT - KWALITY -MAHAPEXLTD - MANPASAND - MODIRUBBER - NAVNETEDUL - PATSPINLTD - PRECAM - SALORAINTL - SOMICONVEY - SOUTHBANK - SPICEMOBI -SYMPHONY - TALWALKARS - TVSMOTOR - UNICHEMLAB - VARROC - VIPULLTD -

Nifty 200 stocks

Stock nameCloseChange20 Day Swing IndicatorLast Month's52 week
TrendDateFixed SLTrailing SLHighLowHighLow
||||| ABCAPITAL143.603.00%BUY24/07/18123.50123.50148125255124
||||| ACC1522.703.50%BUY05/07/181255.651255.651371126018701256
||||| AMBUJACEM223.507.00%BUY26/07/18189.00189.00215196292189
||||| BANKBARODA138.855.00%BUY23/07/18111.90109.50138112207110
||||| BANKINDIA95.608.00%BUY26/07/1876.5076.501058421776
||||| BATAINDIA915.402.50%BUY18/06/18813.10813.10865739919576
||||| COLPAL1085.05-3.50%SELL21/06/181171.951187.901264114812821015
||||| GRASIM1024.203.50%BUY26/07/18914.20914.2010609891300914
||||| ICICIBANK285.654.00%BUY26/07/18256.50256.50303270366255
||||| ITC287.200.00%BUY10/07/18266.25260.05275259291250
||||| M&MFIN512.005.00%BUY26/07/18457.00447.00499454534386
||||| MOTHERSUMI309.053.00%BUY26/07/18279.95279.95317274396274
||||| PETRONET231.254.50%BUY10/07/18205.65205.65229204276198
||||| PFC80.503.00%BUY26/07/1867.5067.50867315068
||||| PNBHOUSING1333.354.00%BUY26/07/181194.151083.351244105117181051
||||| RAMCOCEM721.003.50%BUY26/07/18620.10620.10784677879620
||||| RECLTD107.059.00%BUY26/07/1889.0089.001229918489
||||| SRTRANSFIN1411.009.50%BUY26/07/181149.301048.00152912721669918
||||| TORNTPHARM1494.650.50%BUY16/04/181404.551390.651525137115251147
||||| TVSMOTOR522.35-3.00%SELL04/05/18589.05595.20605548794515
||||| UNIONBANK85.053.50%BUY26/07/1873.9073.90977919674

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July 26, 2018

Darts Outperform The Best Hedge Funds

And here's why: as Jakab reports, "at the time of the conference, Heard on the Street columnists took on the stock pickers by throwing darts to create a portfolio of 10 stocks to go up against the 12 stocks picked by the Sohn speakers."
Readers an probably guess where this is going:
Three months later, the darts have prevailed. The Heard team’s 10 picks, eight long and two short, have returned 7.23% on average. The combined performance of 12 picks by Sohn attendees has been slightly negative, lagging behind the S&P 500 by more than 6 percentage points.
What were some of the names the best and brightest in the business could come up with? The top "expert" pick belonged, ironically, to former Facebook exec (and current critic) Chamath Palihapitiya who said to buy Box. Since than it is up 16% which is great... until one compares the top 5 dart returns.
The top pick from the darts was railcar leasing company GATX , up 27% in the past three months.
The other dart "picks" were PagSeguro, Paychex, Park Hotels and Four Corners, all of which have outperformed their respective "2 and 20" recos.

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed .3% in positive at 11167
- AD was flat

- option writing support 11000

July 25, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today, markets closed flat at 11132
- AD was flat

- option writing support 11000

July 24, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today, NF closed 0.4% in positive at 11134
- AD was 4:1

- option writing support 11000
- option writers very bullish

Do post mortem of your trades everyday




The China stock market as of now... sideways for many years

‘When my mom walked me to kindergarten, the Shanghai Composite was at just over 2,000; when my mom sent me off to high school, the Shanghai Composite was at just over 2,000; when my mom attended my graduation, the Shanghai Composite was at just over 2,000. I wish my mom eternal youth and never to age, just like the Shanghai Composite.’ (A joke that circulated around Mother’s Day in mid May.)



Read more at https://www.bloomberg.com/news/articles/2018-07-23/china-s-day-traders-resort-to-black-comedy-as-stock-losses-mount

July 23, 2018

Signals today

Buy signals:

 ADANIPORTS - ASIANPAINT - BANKBARODA - BATAINDIA - CROMPTON - HAVELLS - IBVENTURES - ITC - KSCL - L&TFH - MARUTI - MGL -NIFTY - STRTECH - VOLTAS - 

Sell signals: 


Stocks gaining >5%: 

L&TFH - LIBERTSHOE - NAUKRI - NCC - PCJEWELLER - SYMPHONY - TIRUMALCHM - UPL - VGUARD - VIJAYABANK -VSTIND -

Stocks losing >5%: 

Open interest distribution

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.7% in positive at 11085
- AD was 5:3
- option writing support 11000

July 20, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed .5% in positive at 11010
- AD was flat
- 15 stocks at 52 week high vs 338 stocks at 52 week lows
- option writing support 11000
- option writers extremely bullish

July 19, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.2% in negative at 10957
- AD was 1:2
- option writing support 10800

July 18, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.25% in negative at 10980
- AD was 1:2
- option writing support 10800

What ails small- and mid-cap stocks

The promoter of one of Mumbai’s oldest broking houses told BusinessLine that SEBI’s move asking mutual funds (MFs) to restructure schemes for small- and mid-cap stocks is a chief cause for the sell-off in this segment. SEBI directed MFs to cut down the number of schemes and broadly have only large-, small- and mid- schemes in the category and further sub-category.

“SEBI’s criteria for re-categorising stocks baffled the street. The definition was strange and confusing as parameters were vague,” said the broker.

“Over 44 per cent of total MF schemes had to be re-adjusted in three months, which started a wave of sell-off in small- and mid-cap stocks and showed no sign of ebbing till June.”

SEBI defined large-caps as the first 100 stocks by market-cap, mid-cap from 101 to 250, and small-cap (stocks below 251), which it said will be updated half yearly.

Suddenly, the pool became smaller and MFs put curbs on inflows into small- and mid-cap schemes.

Read more at https://www.thehindubusinessline.com/markets/what-ails-small-and-mid-cap-stocks/article24445398.ece

1 cr in 17 days




20L in a day.

And people still find fault with his trades.

July 17, 2018

I expect half my trades to fail




Mumbai monsoon pothole song... BMC please wake up

Mix of Marathi and Hindi with English subtitles...based on Sairat Zingaat song.

Open interest distribution

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.6% positive at 11008
- AD was 10:7

- option writers still bullish
- highest OI addition was in 11000 put strike
- overall highest OI is still at 10600 put level

So many possibilities... so easy to go wrong

Junk dividend plan options in mutual funds

Image result for dividend planMutual funds are not corporations to have any earnings of their own; they are basically portfolios of corporations which generate “returns”, not “earnings”. Further, corporations rarely find themselves in a position to return capital or meet cashflow requirements of investors, whereas mutual funds can provide liquidity to their investors almost at call by way of resale of units.


So why such take up of dividends by mutual fund investors despite unreliability and no fundamental reason? It’s not like all investors go for dividend options; in fact around 50% of all investors and probably a larger value of assets under management (AUM) is probably in growth plans as dividends have become less tax-efficient over time. Interactions with investors tell us that there is a good base of investors who want cashflows but are unable to differentiate between terms like return on capital, return of capital, dividends and plain cashflow requirement. Dividends connote “return on capital” without a direct proportionate impact on the original capital and this is what draws investors to dividend; whereas applied to mutual funds, the concept almost entirely results in “return of capital”. One can argue that mutual funds too earn dividends from underlying companies but a simple calculation of dividend yield on some of these portfolios will tell you the argument is bogus. Corporations usually declare dividends after audited profits for a review period are announced and the management, after factoring capital related decisions, recommends a payout to the board. Dividend declarations from mutual funds are indeed “return of capital” as gains generated by mutual funds are only from the sale of securities and there is no correlation between the act of declaring dividends and trading operations of funds.

A portion of investors has capital that they can invest, but it is from this capital that they need to sustain themselves, which requires predictable cashflow. Yet another set of investors does not want cashflow for sustenance but sees regular cashflow as frequent “profit-booking” from a variable return asset or they see cashflow from

Read more at https://www.livemint.com/Opinion/zHn00TKQ7dyXw3yEfA264O/Anyone-in-the-mood-for-dividends.html

Definedge: 11000 straddles hints at rangebound market

Although Nifty is showing some weakness since morning, the 11000 straddle is still going down.

If this weakness is going to continue further, this straddle should turn up.

As long as this straddle is going down, Nifty can remain sideways between 10900-10930 on the lower side and 11050-11100 on the higher side.

straddle

Source: http://www.definedge.com/11000-straddle-update/

My notes based on very limited understanding: anyone who bought 11000 straddle at Friday close is still in loss even though markets went down Monday and VIX increased by 4-5%. The option writer is in profit.

Only if the straddle value increases can one expect a big move in the market. As of now that is not happening.


July 16, 2018

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed 0.7% in negative at10937
- AD was 1:5
- 17 stocks were at 52 week high and 300 at 52 week low
- midcap/ small cap indices down almost 3%

- I think nifty will fill the gaps and take support around 10800 levels



3 ways to make money today using 5 min charts

First hour range breakout method
- break of first hour low was sell signal
- bought 2 lots of 11000 PE around 85 as my SL was high
- cover at close (110)

- this method is the easiest and every one should get same results.

Maruti's expensive cars to get durable lithium-ion batteries

>>>
According to a media report, Maruti Suzuki will be replacing the lead-based batteries on its cars with lithium-ion batteries. These will be offered on the more expensive models including the Swift hatchback from FY2021.

The batteries will be sourced from Suzuki's upcoming battery plant at Gujarat, allowing the factory to achieve economies of scale. It is also expected to be more cost-effective than sourcing lead batteries from vendors.
<<<

Source: http://www.team-bhp.com/news/marutis-expensive-cars-get-durable-lithium-ion-batteries

This is interesting as Maruti is India's largest car manufacturer and if they do this for all their cars, the battery manufacturers (Exide, Amaraja etc) will be hit badly as you are losing your biggest customer (both OEM and replacement market).

The Curious Case Of Manpasand Beverages

Building strong consumer brands is hard. Building them at scale is even harder. Especially in the food and beverages market, building a new brand can be exceptionally difficult. A new player must garner market share from incumbents that have (1) a high brand loyalty amongst consumers, (2) a large distribution footprint built over decades, and (3) benefits of scale due to a portfolio of brands (distribution, advertising, overheads etc.). This explains the resilience of brands like Maggi and Coca Cola which survived the lead and pesticide controversy respectively. Over the last 10 years, the number of new brands built in the food and beverages segment are quite low.

There have been a few exceptions though. For instance, Paper Boat by Hector Beverages has been quite successful. However, Paper Boat’s success was driven by its creation of an entirely new product category of ethnic drinks. Paper Boat did not directly compete with any existing player. It has built a loyal customer base by targeting a latent consumer need which was not served by incumbent players. However, Paper Boat is still a niche product and generated less than 100 crs in revenue in FY16. Other success stories (like that of DS Group’s Pulse candy) have primarily been in segments with higher market share churn. 

However, there is one company which is truly an exception – Manpasand Beverages (“Manpasand”). Manpasand is a Baroda based company which sells fruit drinks/juices under the Mango Sip and Fruits Up brands. In a short period, the company has seen rapid growth in revenues and profits. In FY16, Manpasand generated 557 crs in revenues and 51 crs in profits. This growth was achieved despite fierce competition from incumbent players like Coca Cola (Maaza), Pepsi (Slice/Tropicana), Parle Agro (Frooti) and Dabur (Real).

Read more at https://2point2capital.com/blog/index.php/a2016/12/06/the-curious-case-of-manpasand-beverages/

On cancellation of buybacks





Nice analysis: Did Directors of Kesoram Industries Indulge in Insider Trading and Short-change Minority Shareholders?

The directors and promoters of BK Birla group company Kesoram Industries have allegedly indulged in large-scale insider trading in the process short-changing minority shareholders hundreds of crores. The trail of such wrongdoing was recently alleged by a shareholder Janardan Kothari at the annual general meeting (AGM) of Kesoram Industries on 13 July 2018. Moneylife has reviewed the documents shared by Mr Kothari and pieced together the alleged modus operandi of this episode. The company’s stand at the AGM was that, “We will not take the question of related party and that it can be discussed separately”.

As of 31 March 2015, Kesoram held 27.46 lakh shares of Century Textiles. On 22 March 2016, Kesoram sold all these shares to Camden Industries for Rs141 crore in a bulk deal. In FY17-18, Kesoram invested another Rs400 crore in Cygnet Industries, its wholly owned subsidiary. Cygnet Industries used this amount to buyback 27.46 lakh shares of Century Textiles from Camden Industries in three transactions on 5th, 11th and 12 December 2017; for Rs355 crore. Thus, it is alleged that Camden Industries made a clean profit of Rs214 crore.

Read more at https://www.moneylife.in/article/did-directors-of-kesoram-industries-indulge-in-insider-trading-and-short-change-minority-shareholders/54689.html

July 15, 2018

Feel like doing engineering

Time to invest in midcap mutual funds

The midcap index has corrected by 18% this year and is close to multiple supports on weekly charts. With the broader nifty index expected to takeoff, a turnaround in midcaps stocks is likely so the current environment provides a good opportunity for long term investors.

I was earlier not a big fan of mutual funds but recent SEBI ruling on schemes classification has changed my view. Funds can now invest only in a predefined list of stocks (large caps - 100 stocks, mid caps - 150 stocks etc). The small cap list is too long for my comfort.

Another factor is lack of ETFs in this segment. ETFs have always been my first choice.

Suggestions:

  • Save brokerage and invest directly with the AMC
  • Select  growth scheme. Avoid dividend plans as you will lose heavily on the benefits of compounding.
  • Lumpsum or SIP can be considered depending on your cash flow.

I/ my family are investing in ICICI and HDFC mutual funds over this coming week.

Sensex closes at all time high

- surprised to miss this
- highest ever weekly closing
- so sensex has given breakout before nifty
- next target 40000?


July 14, 2018

Why Electrosteel quoting 10 times at BSE as compared to NSE

Stock is listed at 31 at BSE and 2.60 at NSE.

Face value is same (Rs.10) and ISIN number is also same. Verified from both exchanges.

Any idea why this difference in price.

Note: I am aware of Vedanta's exit plan for Electrosteel shareholders but this still not explain the massive difference in share price at 2 exchanges.


CNX IT technicals

- 3 years weekly charts
- trend is up
- support 12000-13000 resistance 15000