February 28, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed flat at 10792
-  AD was 11:7

- past one week, market breadth has been actually very good

- swing low support 10600 resistance 11000

- next series options data suggested very limited downsides

No commercial flights in Pakistan airspace but business as usual in India

If everyone under performs, then who out performs?

The guy who forgot his account login?

February 27, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today markets opened gap up but closed in negative at 10807
- yesterday's low did not break
- AD was flat

- intraday swing was almost 200 points.

- VIX up 12%

- swing low support 10600 resistance 11000

February 26, 2019

What is the measure of success?

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 0.4% in negative at 10835
- AD was 1:2

- swing low support at 10600 resistance 11000

Why You Get Stop Hunted and How to Avoid it

February 25, 2019

Hot stocks and charts

LAST updated: 25-FEB-2019 

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 0.8% in positive at 10880
- AD was 11:7

- swing low support 10600 resistance 11000

Trading is all about mastering yourself

When investing was easy

Life was much easier for us as investors in the 1980s, and perhaps even in the 1990s. The internet has created a lot of noise along with  information. So unless you know what is information and what is noise, you cannot use the internet well in any field. Even as a runner, cyclist, photographer you are thrown so much stuff, that in case you bite all that you may not be able to chew, or eat – forget digesting.

I would look at a company watch it for a few years and then buy and then hold. Say I bought shares of Asian Paints or Berger Paints. First of all not much information was available about these companies. Supreme Industries is so low profile even now I am sure many of you have not heard about it. One of India’s sharpest investors had asked me to prepare a research report on Supreme in 1988. Apart from a fee of Rs. 25000 I got to spend a lot of time with the company’s numbers and I decided to buy shares of Supreme (RoI of time spent on research is INFINITE, and I am not joking).

I did not know whether it was doing well quarter on quarter. I did not know whether the owners of the company had pledged their shares to borrow money for some other venture. I did not know anything other than what the balance sheet said. We used...

Read more at http://www.subramoney.com/2019/02/when-investing-was-easy

Difference between a novice and experienced trader

It is all about perspective

February 23, 2019

NIFTY weekly charts

- H&S on weekly charts
- right shoulder being formed
- confirmation will be break of neckline
- neckline 10000

BANKNIFTY technicals

- trend is down
- support 26400
- resistance 27600

February 22, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed flat at 10792
- AD was 2:1

- support 10600 resistance 11000

Difficult making money in these kind of markets

February 21, 2019

After a long time, only buy signals today

>>> Never risk more than 1% of your capital on any trade. <<<
Stock nameClose% Ch20 Day Swing IndicatorLast Month'sRSI
TrendDatePriceReturn %StoplossReversalHighLow5 D14 D
||||| ALLAHABAD BANK46.304.50%BUY21/02/1946.300.0038.6538.6548427761
||||| BANDHANBNK488.702.00%BUY12/02/19471.803.58451.50397.005643978264
||||| BLISSGVS169.6010.50%BUY21/02/19169.600.00144.05140.001751448564
||||| CANFINHOME271.006.50%BUY21/02/19271.000.00235.55235.002902416957
||||| DALBHARAT1129.104.50%BUY0.001039.90995.0010988608077
||||| ICICIGI925.752.00%BUY14/02/19910.251.70850.75806.009028076962
||||| JUST DIAL522.159.50%BUY21/02/19522.150.00462.75453.005054548165
||||| QUESS680.352.50%BUY21/02/19680.350.00628.05621.007556247659
||||| RAMCO CEMENTS642.353.00%BUY21/02/19642.350.00592.00555.006465568165
||||| RNAM185.2019.50%BUY21/02/19185.200.00147.00127.001641348168
||||| SUN TV587.603.50%BUY14/02/19579.101.47518.00486.006144877159
||||| TATA STEEL498.851.50%BUY07/02/19489.052.00460.30441.005244417359

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.5% in positive at 10790.
- AD was 2:1

- support / swing low 10600 resistance 11000
- above levels have been tested multiple times
- if 10600 breaks, markets likely to retest 10000 (and break)
- first sign would be this current rally from 10600 stalling in next few days

February 20, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today, nifty closed 1.24% in positive at 10735
- the recovery was from 10600 (double bottom support)
- VIX down 8%

- AD was 11:7

Avoid fundamentals

February 19, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.3% in negative at 10604
- AD was 10:7

- midcap, small cap indices closed in positive

- markets at double bottom support at 10600
- signs of buying seen in past 2 out of 3 days on nifty (shadows on candlesticks)

- option writing: highest OI seen at 10800 CE in weekly series and 11000 CE in monthly series

Not posting intraday charts due to some issue with missing bars.

The secret of not getting trapped

ValueQuest India Moat Fund Performance (Prof Bakshi)

February 18, 2019

We have grey hairs and have seen this before

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 0.8% in negative at 10640
- AD was 1:2
- VIX jumped by 9% and is now at 18%

- broader market is rangebound
- markets now at lower end of range
- support region 10500-10600

- OI highest at 10800 CE in weekly series and 11000 CE in monthly series

The Nifty is No Longer a Play on the Indian Economy

The Nifty has fallen far behind the Indian economy

Over the last ten years, India’s GDP growth (in nominal terms) has averaged 13% per annum whilst the most popular benchmark index in India, the Nifty, has seen its earnings grow at a mere 8% per annum. In fact, in nine out of the last ten years, the Nifty’s earnings growth has trailed nominal GDP by a country mile (the only exception being FY11). In America on the other hand, nominal GDP growth over the past decade has been barely 4% and yet the S&P 500’s earnings has grown at 12% per annum, a full 400bps faster than the Nifty (even without converting the Nifty’s earnings to US dollars)! Why do the benchmark indices in India and America display completely opposite trends (when compared to the GDP growth of their respective economies) and what implications does that have for investors?

Read more at http://marcellus.in/blogs/marcellus-the-nifty-is-no-longer-a-play-on-the-indian-economy

Bottom fishing explained

February 16, 2019

When a stock breaks a 10 year support... from 2500 to 114... long term investing?

Seeing is Believing ... but thinking challenges your belief

NSE circular: Collection of Net Option Value for In/Out of the money options in Cash

Now you cannot take away premium on option writing for certain contracts...

In nifty options, this will impact strike prices 20% above and below current spot price.

Read more at https://www.nseindia.com/content/circulars/CMPT40245.pdf

CNX Midcap weekly chart

- good example of support become resistance and vice versa

NIFTY weekly technicals

- markets trading sideways for few weeks
- H&S formation clearly visible
- Right shoulder being formed

- neckline/ support 10000
- view invalidated above 11200

BANKNIFTY technicals

- trend is down
- support 26400 resistance 27700

February 15, 2019

Open positions and stoploss

StockClose% ChangeBought atBuy DateRemarksTrailing StoplossReturns %
DABUR434.30-1.3441926/11/2018Hold long positions4303.64
HAVELLS688.65-0.7966613/11/2018Exit trade6903.38
RELIANCE1244.451.65112716/11/2018Hold long positions120010.38

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 0.2% in negative at 10724
- AD was 6:11

- volatility was high as markets broke a support and then rallied towards close
- this rally was not reflected in nifty next 50,  midcap, small cap stocks
- this means some heavyweight rallied as only nifty and nifty 100 index gained

- nice hammer formed
- holding above 10800 spot crucial next week

- note buying has come from the 10600 region
- so we have double bottom support at the level and
- another support near 10500 region

Everyone having similar chart for H&S in nifty

- so will this happen?
- note H&S is on weekly charts
- neckline is at 10000
- RHS taking long time to develop
- RHS forming on low volumes
- real correction to start only when 10000 breaks

February 14, 2019

Why India has so many AAA rated companies and also NPAs

YESBANK technicals multiple timeframe

Daily charts:
- trend is down
- stock is trading in a range for past few weeks
- support around 160
- resistance around 240-250

- today stock was up 30% on good volumes
- similar high volumes were seen on 29-NOV when stock broke lows and recovered

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.4% in negative at 10746
- AD was flat

- many indices closed in positive indicating buying at lower levels

- option writing resistance 11000

- swing low at 10600

I don't trust balance sheets either

My notes: I have been in lending business for a long time and in 1990s I never trusted balance sheets. Nothing has changed.

If Lehman and Enron can blatantly lie and collapse, then why not here?

Short Money Rules - excellent, something different

  1. Above-average results requires not being afraid of looking wrong.
  2. Most people are afraid of looking wrong.
  3. Good investing is 50% psychology, 48% history, 2% finance.
  4. Great investing is 10% skill, 10% luck, 80% inability to tell which is which.
  5. Bad investing is 40% overconfidence, 40% fees, 20% denial that keeps it all going.
  6. Getting rich is hard.
  7. Staying rich is harder.

February 13, 2019

NIFTY EOD charts + kpl swing indicator

- all buy signals have failed/ stopped out in past 3 months
- no short signal as yet

- first buy signal at 10763 on 19-NOV-2018
- today nifty is at 10794... a net move of only 31 points

- rangebound markets are difficult to trade
- it becomes easy once you know which timeframe to shift to

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.3% in negative at 10794
- AD was 7:11

- swing low 10500

Midcaps bleed but nearing support

February 12, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 0.5% in negative at 10831
- AD was 7:11

- past few weeks markets are apparently stable
- but a lot of stocks are making new 52 week lows
- eg. today almost 300 stocks 52 week lows

February 11, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 0.5% in negative at 10889
- AD was 5:12

- swing low support 10600 resistance 11000-11200

February 10, 2019

How to trade nifty weekly options?

All options expire last Thursday of every month and now with the introduction of weekly options, we will now have an expiry every week.

It should be noted that premium in options drops faster as one heads towards expiry. So if traded properly, it will mean even more income for an option writer.

Look at this from an option writer's perspective. Assume a trade in NIFTY 11000 CE (at the money) with IV of 15 and expiry of 7 and 30 days.

The options will be priced at Rs.100 and Rs.200 respectively. Note: this is approx and rounded off for convenience. Also, I am using the option calculator at vfmdirect.

Here if I write a monthly option, I will collect Rs.200 as premium income in monthly option. But if I sell a weekly option (current series), I can earn Rs.100/- EVERY week or Rs.400/- in a month. This is fantastic.

For the buyer of the call, it means he will earn a profit only IF the price on expiry is ABOVE 11200 for monthly options and 11100 in case of weekly options.

A simple strategy assuming trend is up would be to:
- buy 10500 CE around 500 and write 11000 CE around 100... SL 100 points in futures

By buying a deep ITM CE, the premium (time decay factor) will be almost nil so the position becomes fully hedged. This trade can be taken every Friday in current series.

One can devise strategies depending on whether one  expects to be bullish, flat / rangebound or bearish. There are hundreds of possibilities. Try the options strategy builder at http://opstra.definedge.com/strategy-builder and experiment with different strategies.

NOTE: as a buyer, your enemy is time decay... you need to be fast with your traders and do the maths accordingly

NIFTY weekly options to kick in from 11th FEB

Next Central Bank Governor?

February 9, 2019

NIFTY weekly technicals

- H&S formation seen on weekly charts
- neckline at 10000
- Right side shoulder being formed
- a breakout above 11000 failed

- region of 11100-11200 is a strong resistance area

BANK NIFTY technicals

- trend is down
- support 26500 resistance 28000

The Pale Blue Dot... very humbling

The Pale Blue Dot is a photograph of planet Earth taken on February 14, 1990, by the Voyager 1 space probe from a record distance of about 6 billion kilometers.

During a public lecture at Cornell University in 1994, Carl Sagan presented the image to the audience and shared his reflections on the deeper meaning behind the idea of the Pale Blue Dot:

We succeeded in taking that picture [from deep space], and, if you look at it, you see a dot. That's here. That's home. That's us. On it, everyone you ever heard of, every human being who ever lived, lived out their lives. The aggregate of all our joys and sufferings, thousands of confident religions, ideologies and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilizations, every king and peasant, every young couple in love, every hopeful child, every mother and father, every inventor and explorer, every teacher of morals, every corrupt politician, every superstar, every supreme leader, every saint and sinner in the history of our species, lived there on a mote of dust, suspended in a sunbeam.

The Earth is a very small stage in a vast cosmic arena. Think of the rivers of blood spilled by all those generals and emperors so that in glory and in triumph they could become the momentary masters of a fraction of a dot. Think of the endless cruelties visited by the inhabitants of one corner of the dot on scarcely distinguishable inhabitants of some other corner of the dot. How frequent their misunderstandings, how eager they are to kill one another, how fervent their hatreds. Our posturings, our imagined self-importance, the delusion that we have some privileged position in the universe, are challenged by this point of pale light.

Our planet is a lonely speck in the great enveloping cosmic dark. In our obscurity – in all this vastness – there is no hint that help will come from elsewhere to save us from ourselves. It is up to us. It's been said that astronomy is a humbling, and I might add, a character-building experience. To my mind, there is perhaps no better demonstration of the folly of human conceits than this distant image of our tiny world. To me, it underscores our responsibility to deal more kindly and compassionately with one another and to preserve and cherish that pale blue dot, the only home we've ever known.

— Carl Sagan, speech at Cornell University, October 13, 1994

Read more at https://en.wikipedia.org/wiki/Pale_Blue_Dot

State of Indian Stock Market

February 8, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 1.15% in negative at 10945
- AD was 1:2

- swing low around 10600

- 2 days ago, we had a breakout above 11000
- but markets sold off next day and today
- weekly close is below 11000

- I have remarked several times that even with a breakout above 11000, markets will encounter even more stiff resistance in the region 11100-11200
- this selloff has happened from same region

- I will comment on H&S tomorrow

Fooled by randomness?

February 7, 2019

Trade logs by Keshav

* Exited the long position taken at around 11100

* No new trades taken at this point of time.

Trade taken in the breakout of first box (roughly 50 points). I waited for price to go twice the size of the box. Once it went i placed stop loss at the low of box size that is equal to my entry price almost.

Then waited for price to move twice the size of second box. It happened and i shifted my stop loss to low of second box.

But i was not comfortable to hold on to this trade as weekly resistance is at around 11100-11200 range.Once 11200 is crossed i may want to go long again. Considering a good risk to reward which i achieved i exited.

On taking advice

Factor Trading has taken a 35 contract position in Nifty futures...long or short?

February 6, 2019

Sensex closes above LHS

- H&S visible on weekly charts
- index has closed above LHS effectively negating it

- weekly close is important

- it will be interesting to see how other analysts interpreting as neckline is sloping upward

NIFTY weekly charts:

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed above 11000 after 3 months of trying
- close was 1.2% in positive at 11062

- AD was 7:10

- now swing low support 10600

Many F&O stocks near 9000 levels?

February 5, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed marginally in positive at 10934
- AD was 5:12

- options: highest OI at 11000 in calls followed by 10700 in puts

Warren Buffett says this simple mistake has cost investors more than $100 billion

... the Berkshire Hathaway chief executive bashed active fund managers who charge higher fees on the promise that they can do better than the broader market. Buffett said most savers would be better off putting their money in low-cost index funds over the long term, and he estimated that investors wasted roughly $100 billion over the past decade on unnecessary fees.

The “massive fees” charged by active fund managers — who often promise to outperform the broader market — can leave savers worse off than if they had simply used a low-cost index fund that tracks a stock-market index, Buffett warned.

Read more at https://www.washingtonpost.com/news/get-there/wp/2017/02/27/warren-buffett-says-this-simple-mistake-has-cost-investors-more-than-100-billion


Did we already have a waterfall decline?

This is what happened towards end of 2018

Ambit’s 30 stocks that it says can deliver 10-bagger returns in 10 yrs

Stocks that can see selling due to change in MSCI methodology

February 4, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed marginally in positive at 10912
- AD was negative at 5:14

- option writing: highest OI at 11000 in calls followed by 10700 in puts

- not posting intraday charts due to some data corruption at vendor end.

We have done our job

February 3, 2019

Blueprint of a trading plan

Will the market breadth improve this year?

CNX IT breakout

- support 14750
- resistance 16300

BANK NIFTY technicals

- trend has turned down
- it will turn up on close above 27800

- below 26500 expect more weakness

February 2, 2019

NIFTY weekly charts

- nifty closing was 1% in positive
- last few weeks, nifty is extremely rangebound
- support 10500 resistance 11000

- nifty likely forming right shoulder of H&S
- may take another 2-3 months to reach 10000

- budget was a complete non event (like all previous years)
- now elections is the big uncertainty

- I am mentally set for a coalition govt (best for India)

My losses & its reasons & the measures taken ( by Keshav)

Reasons : I am in a net loss since this year beginning. Market is range bounded for almost 2 months. Since my trading method requires a prolonged uni directional movement to be profitable i am not able to make any profits and also i am in loss.

In the best of my trading days i have enjoyed profits of upto 40-55% returns in a quarter. Since jan 1 2019 my returns is -3.5%. The draw down has been quiet less because of the risk management measures which i had taken. After making few losses i started to reduce my frequency and also took only 0.2-0.5% risk per trade.

Measures being taken : I do not know how prolonged this range bound scenario will be. It may last for more time than historically observed. Hence i am going to keep my risk per trade to 0.5% and reduce the time frame/ Stop loss points. I usually trade using 5-15 min TF and consider 20 periods highs and lows for decision making. But from now i will use 15 min candle and i consider 5 candles highs and lows for decision making. Will not attempt any pyramiding techniques for a while. Lets see !!

February 1, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today, nifty rallied smartly but sold off near 11000 levels
- overall close was 0.6% in positive at 10894

- this is the 4th time markets are selling off from 11000 levels
- so till this level is crossed, do not expect any big upside

- even if you have a breakout, wait for heavy selling around 11200 levels.
- these will be people who have not shorted yet but see this as a good opportunity
- hope you enjoyed above story

Trade logs by Keshav

* Short trade taken which i mentioned in my last post got SL hit at break even.

* Long trade taken yesterday at 10750 with 10700 SL

* Was expecting a breakout of 11000 today but it did not happen . Holding it still

Lets see !!

Best strategy: Assume the market is closed today

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