October 20, 2018

Hot stocks and charts

LAST updated: 19-OCT-2018 
ABB
ABB chart

NIFTY options open interest

- more calls are being written than puts
- highest OI ia at 11000 CE and then 10600 CE
- in puts, highest OI is at 10000

- overall trend is down



Source: https://www.niftytrader.in/live-nifty-open-interest/

NIFTY weekly technicals

- trend is down
- support 10000
- I think this will hold this year...let's see

BANKNIFTY technicals

Daily charts:
- trend is down
- swing high formed around 25900
- support 24250

October 19, 2018

Market outlook

Daily charts:
- trend is down on daily charts
- today markets opened gap down and closed 1.4% in red at 10303
- AD was 5: 12
- highest OI at 11000 CE and 10000 PE
- VIX increases to 20 (11% increase today) making options expensive

October 18, 2018

Kotak Sec tells retail to buy and others to sell same stock same day.. shame shame

- stock is HERO MOTOCORP
- don't know how much of this is true
- both reports are published 17-OCT-2018
- I am not surprised

Here is the buy call.. see the date and the price



And  here is the sell call



Source: https://twitter.com/Amit_Gulecha/status/1052822718737874945   ... thanks for this.

Why your upbringing can work against you in the stock market

We're brought up with a huge focus on being right or wrong. 

At school we learn. We are then tested on that learning with exams and assignments. This continues all the way through our education – primary school, high school and college. Right and wrong: it's ingrained in us from the word go.

But when we enter the trading arena, being right or wrong has nothing to do with being a successful trader and making profits. If you believe that the most important aspect of successful trading is being correct, you are making a very big mistake.

You can be a highly profitable trader and lose more often than not – indeed, some of the world's top traders lose more often than not.

Unfortunately most people have this belief that in order to be profitable you must be right. This line of thinking for an aspiring trader is very, very wrong.

To conclude, don't be obsessed with being correct. Expect half your trades to fail. Money is made not because of the indicator but by your ability to keep losses small and letting profits run.

Being right has nothing to do with making money.

October 17, 2018

NIFTY options open interest

- highest OI at 10000 PE and 11000 CE
- reduction in OI of OTM puts seen
- increase in OI of OTM calls seen

- implication ... some more correction possible


Market outlook

Daily charts:
- yesterday I had indicated that trend has changed to up
- reason was close above a  certain swing high
- today, markets opened gapup and sold off heavily
- the resulting engulfing bar was probably the biggest this year
- this means I need to change my views
- so I will maintain trend as down with reversal level at 10710

Intraday update/ strategy

- markets open gapup
- but first bar closes near low meaning selling at higher levels
- so until the high of first bar is taken out, no point in going long
- if one is long from yesterday, then trailing SL is 5 or 10 bar low
- both these go hit today

- now cannot go long, till 20 bar swing indicator gives a buy
- even then, this can whipsaw

- option data shows increasing OI at 10700 CE

October 16, 2018

Derivative stocks

Long build up: 

ACC-FUT - AMBUJACEM-FUT - CHENNPETRO-fut - FEDERALBNK-FUT - ICICIPRULI-fut - JPASSOCIAT-FUT - MCX-fut - NBCC-fut -

Long unwinding: 

KPIT-fut -

Short build up: 

BALKRISIND-fut - DHFL-fut - IBULHSGFIN-fut -

Short covering: 

ADANIPOWER-fut - CESC-FUT - ESCORTS-fut - IGL-fut - SREINFRA-fut 

Market outlook

Daily charts:
- trend has changed to up from today (10550)
- first sell was on close below 11600
- here I am using swing high low method
- you can use any other method you are comfortable
- I have posted chart using kplswing indicator separately

- note this buy signal can whipsaw
- swing low is at 10100

- today NF closed at 10585
- AD was 13:5

- option writing support 10000 resistance 11000
- problem is OI at 10700 CE and 10800 CE is not coming down

October 15, 2018

Market outlook

Daily charts:
- trend is down on daily charts
- today NF closed 0.4% in positive at 10512
- AD was 2:1
- option writing support 10000 resistance 11000

- today markets attempted to break out from range... weak effort

A great example of how expectations guide perception

A very clean joke... if you see it differently, the problem is at your end.

Advice for a beginning trader

October 14, 2018

Read this book 4 times already this week... awesome read

So far,  this book has been downloaded only 6 times.

Why people hate reading/ learning?

Just means one thing... huge market!







Number of losing trades before a 50 per cent equity decline

You are your worst enemy

Your psychological fortitude plays an important role in all aspects of your trading and investing, so ensure you work on it. Your emotions will do everything they can to keep you in a losing position and get you out of a winning position.

You are your worst own enemy and, generally, what you feel is the correct thing to do, is the wrong thing to do. Taking a quick profit may feel right but it skews your ability to be a solid long-term winner.

Quite simply, you need to run a trend, not cut it short. You need to cut a loss as quickly as possible, not hope it will come good

Source: Successful stock trading by Nick Radge

Trading is all about risk minimisation + The market is not the enemy

Trading is simply entering a position and then defending the risk involved with that position. 

Defending the risk is about finding low-risk set-ups, moving the protective stop to breakeven as soon as it is appropriate and trailing the stop as the trend develops. In that mind-set, I simply don't think about the potential of a loss and I am completely free to accept what the market gives me each day.

Unfortunately, this is very different to what passes through the minds of most people when they get into a trade. They tend to look for confirmation by reading a public bulletin board or even by unconsciously only accepting information that agrees with their position and rejecting information that conflicts with their position.

The market is not the enemy

Other people approach trading as if they are in battle and the market is the opposition. The market is not the enemy. It cannot hurt you. You can hurt you, but the market simply facilitates the buying and selling of shares and as such provides feedback via its prices. What you do with that feedback is up to you. If you don't use a protective stop, if you use too much leverage, if you do not allow the trends to be ridden, if you bog yourself down in too much analysis, you will lose money.

Source: Successful stock trading by Nick Radge

The patterns don't make you a successful trader

The patterns themselves don't make you a successful trader. The moving average crossover doesn't make you a successful trader. The RSI, stochastic, ATR double-hitched backflip twist doesn't make you a successful trader. All these tools are just for your comfort – a way for you to feel in control and as such allow you to participate in the market. That's okay.

What makes you a successful trader is how much you win when you win and how much you lose when you lose. It won't matter what instrument you decide to use to trade. The same basic trading principle can be used in every market in the world – stocks, futures, commodities, ETF's and foreign exchange – and on every time frame from three-minute charts right through to weekly and monthly charts. The same expectancy will be required anywhere in order to be profitable.

Source: Successful stock trading by Nick Radge

October 13, 2018

The tools you use to trade do not make the money!

If we placed 100 consistently profitable traders in a room and asked each to discuss his or her trading style and techniques, we will know that some may use fundamental analysis, technical analysis or just gut feel. Even then, those who use fundamental analysis may use different aspects of that field. Some may rely on various ratios, while others may not take any ratios into account and rely solely on insider activity. The list and combinations are infinite.

Of the technical traders, some will rely on moving averages, some on an RSI or other indicator, while others will rely only on price patterns and volume.  Each profitable trader will use a different technique, style, investment, time frame, etc.

If all of the 100 traders are profitable through using different techniques, the common denominator cannot be the tools being used. It must be something else.

All indicators, all technical analysis techniques, all fundamental analysis techniques, all software – everything you use to trade and invest – are nothing but tools.

So it will not matter which indicator, tool, time frame or software package is superior, and it's certainly not a tightly held secret or insider knowledge that makes them all profitable. 

The tools you use to trade do not make the money!

The goal of trading is to be profitable. The tools used to achieve this will vary depending on our personalities, financial situations, attitudes to risk and beliefs. Therefore, what you use to trade with are simply tools of the trade and not the reason why you will be profitable.

Source: Successful stock trading by Nick Radge

NIFTY weekly charts

- trend is down on weekly charts
- this week, NF closed 1.5% in positive
- this was first positive close after closing 5 weeks in the red

- very good support around 10000

- sustaining above 10500 will be bullish else new lows

BANKNIFTY technicals

- trend is down on daily charts
- last 2 weeks, BNF is trading in a range
- this week, BNF gained 4%

- stiff resistance around 25600
- not sustaining about 25600 can lead to deep correction

- next support 23600

October 12, 2018

Continuous learning is the key



How option writers make money... some real trades

FnO stocks

Long build up: 

BHARATFIN-fut - CHENNPETRO-fut - COALINDIA-fut - EXIDEIND-fut - GRASIM-fut - HEXAWARE-fut - NBCC-fut - RBLBANK-fut - SRF-fut - TVSMOTOR-fut - YESBANK-FUT -

Long unwinding: 

Short build up:
HCLTECH-FUT - TCS-FUT -

Short covering:
APOLLOTYRE-fut - BPCL-FUT - CENTURYTEX-FUT - DCBBANK-fut - IGL-fut - INFRATEL-fut - JINDALSTEL-FUT - JUSTDIAL-fut - KSCL-fut - MARUTI-FUT -

Market outlook

Daily charts:
- trend is down on daily charts
- today markets closed 2.3% in positive at 10472
- AD was 4:1

- VIX down 8%

- past few days we are have strong reversals from 10500 levels
- this can be considered as a significant level/ swing level being formed
- sustaining above this, a rally of 200-300 points is possible

- option writing support 10000 resistance 11000

October 11, 2018

Stock price cannot be disputed... a balance sheet can be disputed

...It's my belief that the picture of a stock's current price action and price history cannot be disputed – it is a 100 per cent certainty. A company's balance sheet, earnings and disclosures, however, can be disputed. 

Bear Sterns, Lehman Brothers, MF Global and Enron are some better known and recent examples where many  fundamental analysts got it plain wrong and, unfortunately, investors paid the price for the poor analysis. Other examples are just as bad and I collected a huge number of examples in the early 2008 deluge of earnings downgrades. We can see the same trend of poor disclosure throughout the world.

While an in-depth look at all of these examples is beyond the scope of this book, suffice to say I believe the reliance of many analysts on company disclosures is questionable.

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.

From Successful Stock Trading by Nick Radge

Market outlook

Daily charts:
- trend is down on daily charts
- today NF closed 2.2% in negative 10235
- AD was 1:2
- VIX jumped 15%

- there was a hint of a correction (but not a big gap down) in yesterday's market
- read that post carefully (don't ask me to post again).

- highest OI at 10000 PE followed by 10500 CE

How to trade today?

Just thinking...

- I do not have an overnight short position (fortunate I am not long)
- market will open say 200 points down
- VIX will jump up 8-10% making options very expensive
- good support around 10220 F

- if it opens near support, it will difficult to take a short position
- taking any position is a problem as average move can be 50-70 points in few minutes

- if I risk 5000 for a trade and average SL is 100 points, then I can buy only 50 nifty
- but lot size is 75
- so the only way is to increase risk (no no) or wait for a chance where SL becomes small

What if I don't trade? May be the best thing.

October 10, 2018

Derivative stocks action

Long build up: 
AMARAJABAT-fut - BANKBARODA-FUT - BANKNIFTY-FUT - BPCL-FUT - HAVELLS-fut - HEXAWARE-fut - JUBLFOOD-fut - JUSTDIAL-fut - KSCL-fut - MCDOWELL_N-fut - NBCC-fut - NCC-fut - PTC-FUT - PVR-fut - REPCOHOME-fut - SRTRANSFIN-fut -


Long unwinding: 


Short build up: 
INFRATEL-fut - SHREECEM-fut - TCS-FUT -


Short covering: 
ALBK-FUT - BAJAJFINSV-fut - BALKRISIND-fut - CHOLAFIN-fut - DLF-FUT - EQUITAS-fut - EXIDEIND-fut - HINDPETRO-FUT - IGL-fut - JETAIRWAYS-fut - L&TFH-fut - NIITTECH-fut - PEL-fut - RBLBANK-fut - TORNTPOWER-fut - UNIONBANK-FUT - VOLTAS-FUT - ZEEL-FUT -


NIFTY options open interest analysis

- note this analysis has nothing to do with market direction

- option writing support 10000 resistance 11000
- note previous supports were 11000, 10700 and 10500 (all puts)
- these level broke but open interest did not come down
- option writers did not book losses meaning positions were hedged
- now even today the open interest at 10500 PE, 10700 PE is the same or slightly more
- so writers are still short in those and also in futures. So more downsides?

- intraday OI changes were small

- any other interpretation is welcome



Market outlook

Daily charts:
- trend is down on daily charts
- today NF closed 1.5% in positive at 10460
- AD was 5:1
- VIX down 9%

- option writing support 10000 resistance 11000
- separate note on this

Stress is the by product of your expectations


October 9, 2018

Ebook: Successful Stock Trading by Nick Radge

Excellent book for traders and professionals



You can finish this in one day but is worth reading a few times.

Download link: http://www.vfmdirect.com/info/index.shtml

Nilesh Shah: This market has a few reasons to go up and many to bring it down

Market outlook

Daily charts:
- trend is down on daily charts
- today NF closed 0.5% in negative at 10301
- AD was 7:11

- ATR (average true range) today is still high at 180 vs 85 before the correction

- option writing support 10000 resistance 10800-10500

- VIX down 2%

Inverted H&S on nifty futures charts

- let's see if we get a breakout
- neckline 10415 F

October 8, 2018

Market outlook

Daily charts:
- trend is down on daily charts
- today markets closed 0.3% positive at 10348
- AD was 5:13

- option writing support 10000 resistance 10800
- note that 2nd highest put OI is at 10500 PE and this position has not reduced

October 7, 2018

What to expect from this current correction


Read more at https://twitter.com/jdsfinance/status/1048893918824161280


Contra view on Indian markets




NIFTY monthly log scale chart

- expecting support around 10000
- panic bottom to form tomorrow?



What is the difference between a logarithmic price scale and a linear one?

Note: this is how the traditional linear scale chart look like:

Forget NSE Option chain, Try this smart way to analyse Open interest

Danger ahead in US markets?




#TVSMOTOR weekly chart

- trend is down
- resistance 600
- support 325

#BAJAJAUTO weekly chart

- stock rangebound for 2 years
- now at support 2520
- next support 2000 levels

HEROMOTOCO monthly chart

- stock breaks 2018 and 2017 support
- next support 2215

Stocks which have hardly corrected in this correction

FILTER: 20 day ROC > -5%


October 6, 2018

NIFTY chart with Bollinger Bands

- I never use BBs
- but I am posting this chart to show
- that reaching the extremities of any band (upper or lower)
- does not mean a reversal is likely to happen
- volatility can and does expand beyond what we think is possible

- problem happens when people short rising markets and buy falling markets.

CNX IT charts

- trend is down
- this index was the best performing this year
- index has just closed below its support/ SL

CNX Midcap charts

- trend is down
- the recent buy signal gave nominal profits
- but the correction is stronger and the index is now at 52 week lows

Nifty 200 stocks signals

Stock nameCloseChange20 Day Swing IndicatorLast Month's52 week
TrendDateFixed SLTrailing SLHighLowHighLow
||||| ADANIPORTS301.80-4.50%SELL11/09/18379.75388.00393317452298
||||| APOLLOTYRE198.00-2.50%SELL13/08/18243.65250.80254206307194
||||| ASHOKLEY107.75-8.50%SELL21/09/18128.05133.15135113168102
||||| ASIANPAINT1209.50-1.00%SELL30/08/181324.851336.551388121214911090
||||| BAJAJ-AUTO2543.05-4.00%SELL05/10/182843.002949.002949263634682520
||||| BAJFINANCE2023.30-7.00%SELL10/09/182557.002764.802880211729941511
||||| BHARATFORG576.95-2.00%SELL21/05/18653.75693.90694591798575
||||| BPCL265.30-19.50%SELL27/06/18383.80383.80383324552239
||||| CASTROLIND136.80-3.00%SELL04/09/18155.70158.70160140214135
||||| CENTURYTEX763.60-4.00%SELL21/09/18913.65944.009928121471754
||||| ENGINERSIN103.00-8.50%SELL05/10/18127.05138.70140116206102
||||| GAIL332.05-9.50%SELL05/10/18394.55394.55395354399295
||||| HINDUNILVR1558.55-0.50%SELL03/09/181656.901678.501792156418091199
||||| IGL221.70-5.50%SELL05/09/18274.90281.40298231345217
||||| IRB127.75-3.00%SELL18/05/18167.80181.20192131286125
||||| JINDALSTEL175.90-8.00%SELL28/09/18246.45246.45246183294150
||||| JSWSTEEL366.60-2.50%SELL05/10/18427.55427.55428374428238
||||| L&TFH120.05-4.50%SELL04/09/18151.30171.40184120214115
||||| LUPIN838.75-1.50%SELL05/10/18931.50986.109868521090724
||||| MPHASIS1120.60-2.00%SELL27/09/181226.351271.00127711481279607
||||| MRPL64.00-9.00%SELL04/09/1876.6580.90827014762
||||| MUTHOOTFIN383.70-3.00%SELL05/10/18479.35479.35479386519364
||||| NBCC53.50-5.50%SELL04/09/1866.3572.25745814653
||||| NTPC162.90-2.00%SELL05/10/18173.80175.40175164188150
||||| OIL186.90-10.50%SELL05/10/18227.00227.00227200259181
||||| ONGC147.05-14.50%SELL05/10/18185.40185.40185166213146
||||| RBLBANK490.25-3.50%SELL21/09/18601.00617.00644504652443
||||| RELCAPITAL258.90-4.00%SELL17/09/18369.50471.05488274626253
||||| SHREECEM15717.65-4.00%SELL12/09/1817924.7018504.6519290161161984914980
||||| TATAGLOBAL209.20-4.00%SELL16/07/18240.00240.00244213329203
||||| TATAMOTORS216.25-3.00%SELL18/09/18257.70282.00282220468215
||||| TATAPOWER62.85-5.50%SELL28/09/1876.5078.95796610262
||||| TVSMOTOR503.95-4.00%SELL05/10/18604.70604.70605534794498
||||| VGUARD167.40-2.00%SELL10/09/18195.90211.70226172255166
||||| VOLTAS506.45-1.50%SELL21/09/18584.80621.95622525675493
||||| WOCKPHARMA506.15-1.50%SELL21/09/18638.80692.206925311012501
||||| ZEEL422.30-3.50%SELL06/02/18458.00494.85505429619415

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NIFTY PE chart


#IOC weekly charts

- good support around 115 levels
- stock has lost 40-50% so far

#HINDPETRO monthly charts

- one support at 222 gone
- next support 120

- good to buy in panic for long term

#BPCL at long term supports

- does anyone remember the triangle? I did not

Black Monday on Oct 8?

This tweet was made on 25th AUG




BANKNIFTY weekly charts

- trend is down
- good support at 23600

NIFTY weekly charts

- trend is down
- loss this week was 5.6%
- this was biggest loss in 2 years
- next support 10000-9000

- 2018 year low is 9950; this is also a swing low so expect support here

- RSI has moved from 77 to 34 in one month
- just an observation...no interpretation or conclusion

October 5, 2018

Blood on the streets?

Somewhere I heard someone say with this correction there is blood on the streets.

I disagree.

First, retail has to be big time long in the markets. Eg. sell your flat and invest in stocks so you can buy 2 flats in a year. Your next door aunty should give you awesome tips. This is not happening.

Second, index should double pretty fast. I have seen the index doubling in 3 months. The current generation of mutual fund managers has NOT seen this. These are the guys asking you to be 100% invested in so and so fund while they focus on FDs.

But times have changed so index doubling in 2-3 years will be a big thing. This has not happened so far.

Third, for blood on the streets, investors should lose heavily. Economy has to contract, jobs must be lost and brokerages should shut down. I have seen days where a brokerage sacks employees and GMs/ Veeps lose their jobs and default big time on their EMIs. This is not happening. May happen in the future.

As of now his is a small correction.

So just relax and chill.


NIFTY options open interest analysis

- support 10000 resistance 10800 based on highest OTM options


- note earlier support was 11000, then 10700, then 10500 all of which broke
- but open interest remained roughly the same in the puts... see chart

- so what do you do when you have sold 10500 put and your trade goes in a loss?
- simple... you short in futures and hedge it.

- that is why when a support breaks, markets have a free fall.

- also note the IVs... it is at 20%. A 10300 put is now available at 200 so if you sell a put and short nifty, you can get almost the entire premium as profit on expiry. And at panic bottoms, the IVs will be the highest!

- And if you sell a straddle (say 10300), you have a leeway of 400 points (cost of 10300 call and 10300 put).

- of course, in real life it is not so easy. You must have good knowledge of option greeks, a calm mind and nerves of steel.