November 30, 2019

NIFTY weekly charts

- trend is up
- first ever weekly close above 12000

- highest OI at 12100 CE followed by 12000 PE
- rangebound trading likely this week?

BANK NIFTY daily and weekly charts analysis

Daily charts:
- trend is up
- support 31000

- options data shows highest OI at 31500 PE followed by 32000 CE

November 29, 2019

Who is your enemy?

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Money lost on "divergence"......

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.8% in negative at 12056
- AD was flat (good sign)
- 12000 retested and still holding (good sign)

Dark Ages

November 28, 2019

Cumulative market breadth continues to disappoint

So now the slowdown is because of Supreme Court...not millenials?

No wonder BAJAJ FIN and HDFC twins are trading near all time highs

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.4% in positive at 12152
- AD was flat

- VIX down 4%

- highest OI at 12000 PE

Swing trading signals :: 28-NOV-2019

Swing trading signals :: 28-NOV-2019

  • 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 and vice versa.
  • Ignore signal if stock is rangebound for extended periods of time.
  • Hint: give preference to stocks making 52 week highs or all time highs or breaking out from a range.
  • 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.
  • Trailing SL: For long positions, use last week's low or 10 days low.
  • Click on stock name link for charts, more info etc
  • Risk Management: Limit investment per stock to 3% of trading capital.
  • Important: Trade in cash only and never in futures.
This information is for your study only and is not a recommendation to buy or sell

All signals:

Buy signals:
BALKRISIND - BANKBARODA - CANBK - CRISIL - CUB - IBULHSGFIN - ICICIBANK - IIFL - JSWSTEEL - LICHSGFIN - MASTEK - NIFTY - ORIENTELEC - RELIANCE - SANOFI - TATACHEM - TATASTEEL - UNIONBANK -

Interesting thread about a China visit by @baboonzero

November 27, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.5% in positive at 12100
- AD was flat

- support 11800
- weekly close above 12000 will be bullish

No more gurus

There is a difference between an expert, whose talent should always be celebrated, and a guru, whose bad ideas should never be questioned.

With few exceptions we should praise experts but be terrified of gurus.

This problem afflicts tech, where several one-time god-like leaders have been revealed to be something between showmen and fraudsters. Or even the innocent version: normal people susceptible to incentives and the desire to maintain a narrative.

Same in investing, where one right call can sustain a subsequent career of unquestioned dart throwing.

And in politics, where a politician who does a few things people support can get those people to nod their heads at lot of things they otherwise wouldn’t.

Success has a way of making those around you question whether they should point out your flaws or question your crazy ideas. This is partly a desire to not damage your career or be rejected from the tribe, and part a flawed assumption that if someone’s crazy ideas in the past turned out to be right, their crazy ideas today must be the same. It can also be driven by the assumption that skill in one field translates to wisdom in all fields.

But guru-ism is dangerous for everyone, for a few reasons.

Read more at https://www.collaborativefund.com/blog/no-more-gurus/

There are no telecom billionaires

November 26, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.3% in negative at 12037
- AD was 4:5

- 12000 was tested intraday and this held

November 25, 2019

Short covering rally?


Market outlook with more charts

Daily charts:
- trend is up on daily charts
- today nifty closed 1.4% in positive at 12079
- AD was 11:7

- today was the biggest bar for NOV
- swing low around 11800

- this is the 2nd time nifty is closing above 12000
- the first time was on 1st JUN after which nifty corrected to 10700

- there has never been a weekly close above 12000
- if this happens, this will be a very strong bullish sign

- highest OI is at 12000 PE
- box indicates rally possible to 12200-12300

November 23, 2019

NIFTY weekly charts

- 12000 proving to be a big resistance
- we never had a weekly close ever above this
- last 3 weeks, rangebound markets
- and every week a doji formed
- this is ok as it means indecision

BANKNIFTY technicals

- trend is up
- support 30500
- big resistance around 31500-32000 levels

Financial lessons from Maharashtra

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Option strategies for low and high IVs

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November 22, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.5% in negative at 11914
- AD was flat

- highest OI at 12000 CE

November 21, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.25 in negative at 11968
- AD was 4:5

- this month, nifty has closed not even once above 12000

- option writers would have made excellent money selling 12000 CE
- they were also selling 11800 PE and 11900 PE

- even today, highest OI is still at 12000 CE

Investors also keep losses small

November 20, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed .5% in positive at 11999
- AD was flat

- pattern formed doji

- highest OI at 11900 PE followed by 12000 CE

Everyone is a thief, and now a terrorist also



.......
The root cause of this rupturing of our social fabric is the Modi government’s ‘mala fide unless proven otherwise’ doctrine of governance. The premise of the government’s policy framework seems to be that economic participants have mala-fide intent unless they can prove otherwise. This suspicion that every industrialist, banker, policymaker, regulator, entrepreneur and citizen is out to defraud the government has led to a complete breakdown of trust in our society. This has halted economic development, with bankers unable to lend, industrialists unable to invest and policymakers unable to act.

The Modi government seems to view everything and everyone through a tainted prism of suspicion and distrust due to which every policy of previous governments are presumed to be of bad intent, every loan sanctioned considered undeserving and every new industrial project deemed to be crony in nature.......

Read more at https://www.thehindu.com/opinion/lead/the-fountainhead-of-indias-economic-malaise/article30000546.ece

Where to buy or sell is the least important part of trading

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November 19, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.5% in positive at 11940
- AD was 1:1 (flat)

- swing low support 11800
- highest OI at 11800 PE followed by 12000 CE

November 18, 2019

Mitesh Patel: The angry young man of options trading

Mitesh Patel is one of the most visible twitter handle in the options trading in India. Not one to shy away from a confrontation, he is as aggressive on social media as he is with his trading.

A man with humble roots, Patel is by-and-large a self-trained trader who does not mince words to protect his territory. Having paid the market a part of his salary as tuition fees for nearly a decade before he could find his mojo, it is no surprise that Patel is possessive about his achievement.

Behind the aggressive mask is a shrewd and calculative trader who has discovered the secrets of making money. Patel is among those traders who post and discusses his trades, wins and losses with much fervour

Read more at https://www.moneycontrol.com/news/business/markets/mitesh-patel-the-angry-young-man-of-options-trading-4645741.html

Urge PM To "Set Aside His Deep-Rooted Suspicion Of...": Manmohan Singh

Prime Minister Narendra Modi should set aside his "deep-rooted suspicion of industrialists and entrepreneurs", which has halted economic development and ruptured India's social fabric, his predecessor Manmohan Singh has said in a hard-hitting editorial in The Hindu newspaper.

The "toxic combination of deep distrust, pervasive fear and a sense of hopelessness in our society is stifling economic activity, and hence, economic growth," the former Prime Minister said in the piece titled "The Fountainhead of India's Economic Malaise" published on Monday.

"I urge the Prime Minister to set aside his deep-rooted suspicion of industrialists and entrepreneurs and nurse us back to a confident and mutually trustworthy society that can revive the animal spirits and help our economy soar," Manmohan Singh wrote.

The state of the economy, said the former Prime Minister, was worrying not just because of what he called disturbing statistics like 15-year low in GDP growth, a 45-year high in joblessness, a four-decade low in household consumption, bad loans and a 15-year low in electricity consumption. "These are mere manifestations of a deeper underlying malaise that plagues the nation's economy today," he wrote.

Read more at https://www.ndtv.com/india-news/manmohan-singh-urges-pm-to-set-aside-his-deep-rooted-suspicion-of-2134337

Choose your cup of poison carefully

The concept matters

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Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed flat at 11894
- AD was flat

- VIX up 4%

- highest open interest 12000 CE
- max increase is 11900 CE
- expiry likely to be below 12000

Full blown recession?

How India’s growth bubble fizzled out

India’s gross domestic product (GDP) growth has slowed sharply from 8% a year last year to 5% in the second quarter this year. Optimists, Indian and international, say growth will pick up soon. The International Monetary Fund (IMF) projects the Indian economy will hum at 7.5% a year by 2021. Such optimism is dangerous.

GDP growth could, in fact, fall and languish in the 3-to-5% a year range. The ongoing slowdown is not a short-term disruption. Rather, a financial bubble that began inflating nearly three decades ago is finally fizzling out.

Indian policymakers have patted themselves on the back during these past growth years. They have relied on a narrow vision of economic liberalization, which could do little to generate long-term growth but which did create deep financial pathologies and inequalities.

Read more at https://www.livemint.com/news/india/how-india-s-growth-bubble-fizzled-out-11574004165054.html

November 16, 2019

BANKNIFTY weightage

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NIFTY weekly charts

- trend is up
- spinning top/ doji for 2nd consecutive week

- as long as 11600 holds, nothing to worry

- waiting for weekly close above 12000
- so far this is not happening

- highest OI remains at 12000 CE...resistance

BANKNIFTY technicals

- trend is up
- support 30000
- resistance 32000

- 30500 expected to hold this expiry

November 15, 2019

The Trump impeachment comedy

Ignore data if it does not support your views

Salaries do not attract GST

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Open positions and stoploss


 

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed flat at 11895
- AD was 4:5

- doji was formed

-  highest OI at 12000CE

For option traders...

You being right does not mean I am wrong

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November 14, 2019

Stock charts

LAST updated: 14-NOV-2019 
AUROPHARMA
AUROPHARMA chart

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.25% in positive at 11870
- AD was 7:11

- VIX down 6%

- option writing support 11600 resistance 12000

Trade for the process and not the money

Secret to wealth

This happens only in India...shut schools and then ask children to run

MANAGE RISK all the time

No market trends all the time. No range sustains all the time. No strategy works all the time. That's why you MANAGE RISK all the time!

Govt is desperate for income - 18% GST on HO salaries

November 13, 2019

What if RELIANCE was not up 3% today?

- RELIANCE was up 3% today
- but NIFTY closed 0.6% in negative
- if RELIANCE was flat
-  then NIFTY would have been another 60 points down

Source: https://www.equitymaster.com/india-markets/nse-replica.asp


Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.6% in negative at 11840
- AD was 7:11

- option writing support 11600 resistance 12000

Strange... NSE Advance Decline chart

November 11, 2019

Brokers OHLC charts/ data Mismatch and Stoploss / Limit Orders got executed wrongly

Indian Exchanges provides free Level 2 access to its members (Brokers/). Level 2 data contains the Last traded price, Top 5 Bid x Ask levels from the orderbook. The complete depth of the exchange orderbook is not exposed and currently, Level 2 data is restricted only up to 5 levels (depth of the market). Some brokers even provide Level 3 data to their premium clients to identify liquidity pools for their premium customers.

And Level 1 data that most of the data vendors/Websites use primarily gets only LTP, Bid Price, Bid Qty, Ask Price, ASK Qty only for the first level in the orderbook.

Both Level 1 and Level 2 data which is sent in realtime by the Indian Exchanges are not a real tick data instead they send consolidated 1-second data feed for Level 1 (snapshot data) and every broker in the country to receive snapshot Level 2/Level 3 data (consolidated data) which updates 2-4 every second (But not reports all the ticks).

A Tick is generated by the exchange whenever there is a change in LTP price or any order cancellations/order modifications are done in the orderbook it will be reported in the form of Tick data. Which exchange call it as a TBT feed (tick by tick data feed). And every second gigantic amount of ticks are generated every second which is humongous data to transmit over the internet in realtime

Currently, TBT feed is accessible only by the High-frequency trading firms where their servers are colocated to the exchange server to tap and process the data faster to execute their low latency trading strategies.

Read more at https://www.marketcalls.in/trading-lessons/brokers-ohlc-charts-data-mismatch-and-stoploss-limit-orders-got-executed-wrongly.html

Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed flat at 11913
- AD was flat

- trading range was extremely small..

Grim Trigger Play in Maharashtra CM politics BJP vs Shiv Sena

A "Grim Trigger" (also called the grim strategy or just grim) is a trigger strategy for a repeated game.

Initially, a player using grim trigger will cooperate, but as soon as the opponent defects (thus satisfying the trigger condition), the player using grim trigger will defect for the remainder of the iterated game. Since a single defect by the opponent triggers defection forever, grim trigger is the most strictly unforgiving of strategies in an iterated game.



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

November 9, 2019

NIFTY weekly charts

- trend is up
- lot of tussle seen around 12000 levels
- weekly close above 12000 will be bullish sign

- weekly expiry shows highest OI at 12000 CE
- monthly expiry shows highest OI at 11600 PE
- difficult trading environment

- big spoiler: nifty PE ratio now around 28
- does not make sense for long term investors to enter now



BANKNIFTY technicals

- trend is up
- swing low around 30000
- double top near 31000

- note rally from 27500 to 30500 has taken a longer time than the same fall
- this is not  a bullish sign

- weekly expiry shows highest OI at 30500 PE-30000  PE
- monthly expiry shows highest OI at 30000 PE
- above levels are expected to give support
- this means option writers are bullish

November 8, 2019

Avoid rent seekers

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S Gurumurthy on demonetisation



Read more at https://twitter.com/sgurumurthy/status/1192718994882646017

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.9% in negative at 11908
- AD was 7:11

- past  few days nifty is unable to sustain near day's highs
- yesterday's hanging man was a nice warning

- option writing support 11600 res 12000

November 7, 2019

Buy signals

ADANITRANS - COLPAL - GODFRYPHLP - HAVELLS - HINDALCO - IPCALAB - ITC - 


MFSL - NBCC - NIFTY - NIFTYBEES - NIITLTD - PEL - RELCAPITAL - TINPLATE -

Open interest analyss

- this weekly expiry, option writers escaped with min injuries
- the dominant view was expiry below 12000; expiry happened at 12016

- monthly expiry stats show
- highest OI at 11900 PE
- option writers do not expect 11600 to break
- increased writing seen at 11900 PE
- in other words, cautiously bullish

Market outlook

Daily charts:
- trend is up on  daily charts
- today nifty closed .4% in positive at 12016
- AD was flat

- doji/ hanging man formed
- if markets close above 12000, this will be the weekly close above this level

The role of P/E multiples in determining investment returns

Two of the most common fallacies of investing in the stock market are:


  • P/E multiple of 10x is cheap and P/E multiple of 50x is expensive
  • During time periods when P/E multiples of great companies compress, share prices of poor quality companies will outperform those of great companies.


Let’s do a quick statistical analysis to test these two points. As shown in the exhibits that follow, the BSE100 universe in India has had no significant correlation between starting period valuations (as at the beginning of the concerned period) and subsequent long-term returns, no matter which phase of the stock market one looks at.

Read more at https://marcellus.in/blogs/the-role-of-p-e-multiples-in-determining-investment-returns/

Pay Up, But Don't Overpay

Did the fellow who paid 68 times earnings for Nestlé India in 1992 overpay? If he had, his long-term return should have been poor, right? But that didn’t happen. It didn’t happen because even at a P/E of 68, the growing earnings stream the company would deliver over the next two decades was not being fully factored in that “crazy” price. So, perhaps the fellow who bought it at that price was not that crazy after all.

It seems to me that Indian stock markets have systematically undervalued Nestlé India by ignoring its long-term growth potential. But, you ask, how much more can Nestlé India grow? I will let you dwell on this by providing you with a few data points.

Read more at https://www.outlookbusiness.com/specials/the-name-is-buffett-warren-buffett/pay-up-but-dont-overpay-1502

Breakout stock charts

LAST updated: 06-NOV-2019 
ADANIENT
ADANIENT chart

November 6, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.4% in positive at  11961
- AD was flat

- "outside" bar formed
- tussle between bulls and bears going on

- option writing support 11900 resistance 12000 (highest OI in calls)

Who is DarkInfosious in #INFOSYS

November 5, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.2% in negative at 11917
- AD was 7:11

- lower low formed
- outside bar formed
- buying seen at lower levels

- highest OI persists at 12000 CE
- limited upside seen

NIFTY Std Deviation wrt 50 DMA

November 4, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.4% in positive at 11945
- AD was 10:7

- last 3-4 days, nifty forming higher high higher low
- but close is always near open thus forming a doji
- a small correction cannot be ruled to shake out the weak hands

- looks like expiry will be below 12000
- open interest says so

November 3, 2019

NIFTY weekly charts

- trend is up
- strong resistance around 12000
- support 11500-11000

BANKNIFTY technicals

- trend is up
- support around 29700 (minor) and 29000
- prev swing high/ resistance 30800

November 1, 2019

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.2% in positive at 11900
- AD was 5:4

- VIX dropped 4%



3 min charts:
- took one long trade
- stopped out at small loss
- did nothing thereafter

- decision levels 11880-11940 F



Active income versus passive income

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Source: unknown/ unreliable