Thursday, December 29, 2016

Voltas Limited - Seem to be ready for short term gains

A typical structure is formed on Voltas today. The stock has closed above its earlier top. The earlier top is marked with a black arrow on chart. This hints us at a change in trend from current down trend to an uptrend for short term.
Increase in volumes hinting at an increased buying in this stock.

Entry in the stock to be managed properly as a small pullback can not be denied from current levels.

The upcoming resistance areas are marked with red line on chart.





Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  


Tuesday, December 27, 2016

Reliance Industries Ascending Triangle

Reliance Industries
A frustrating consolidation continues in this large cap. This consolidation is referred to as Ascending Triangle. A breakout is expected after the consolidation. This time since this is an ascending triangle the breakout can be on upper side of the price. 

I have started creating small  videos in Hindi on the same topic. To check video click this link
https://youtu.be/KBuSgll3tSs 






Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  


Monday, December 12, 2016

Deep Industries - Fresh breakout to uncharted territory

Deep Industries caters to the services required by Oil and Gas companies like ONGC and Reliance.

Friday's chart shows a fresh breakout in Deep Industries.
This breakout has come with large volumes. The stock is ready for next move. Breakouts are followed by consolidations. We do not know whether to stock will continue the movement or it will pause for a consolidation. I have marked the support areas on chart below. Entry levels can be tricky.

Entry 1- 285.45
Entry 2- 278
Entry 3- 261

When trading breakouts, the Risk Management becomes more important. However this pattern can give some quick gains.

To understand the risk of buying breakouts, you can read this article-


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  

Wednesday, December 7, 2016

You don't need 90% success ratio to make profits

 To begin with (for those who are new), lets spend some time in understanding as to what is a 'Success Ratio" in trading. Success ratio is nothing but the number of winning trades out of the total trades taken.

For example - If a trader takes total 10 trades, books profit in 7 trades and book loss in 3 trades, his Success Ratio is 70%. As he has 7 winners out of 10.
Or
Suppose a trader takes 100 trades in one year. He books profit in 65 trades and books losses in 35 trades. Then his success ratio is 65%.

Now since we know, what the success ratio is, lets move on to understand why am I saying that you don't need 90% success ratio. Let me put this statement this way- you don't necessarily need beyond 65% success ratio to make money in markets.

However, on the contrary, most traders / investors in stock markets are obsessed with high success ratio. They feel Analysts and Researchers have methods to precisely predict the stock movement. This is why many advisers and tip providers try to take an advantage out of this situation. Most of them claim that they have more than 90% success ratio. I am not saying that the research is not required. However, giving undue importance to research and ignoring some other important aspects of trading can be a blunder.

You have to finally break your belief and trust that Risk Management and Money Management are the most important aspects of making money in trading. If I have to weight Research against Money and Risk Management in trading- I would give weight of 60 out of 100 to Risk and Money Management. I would give a weight of only 40 out of 100 to research.

Look at how a simple Risk Management Technique can benefit traders-
The technique is called as Risk Reward Ratio. (Stoploss to Target Ratio)

Here is an example of a trade-
Stock A recommended to be bought at Rs 150 which has a stoploss of 140 and a target of 180.

Risk = Entry-Stoploss = 150-140 = 10
Reward= Target - Entry= 180-150= 30

So the Risk Reward Ratio in case of Stock A is RR Ratio= Risk/Ratio= 10/30 or 1:3.
This means that trading in stock A has risk of Rs 1 for Reward of every Rs 3.

Here is Why I am saying that you don't need 90% success ratio to make profits in market.

Say, a trader takes 10 trades during a specific period of one month. Here are 3 different scenario with different Winning Ratio and same Risk Reward Ratio.

Scenario 1- 
Winning Trades- 7
Loosing Trades- 3

This means the Winning Ratio is 70%

Lets assume all the trades have RR Ratio of 1:3. It means each trade profit's Rs 3 in each winning trade and looses Rs 1 in losing trade.

So Reward (Profit) = 7 (winning trades) * Rs 3 (profit in each trade) = Rs 21 (This is profit ignoring transaction charges)
Risk (Loss) =  3 (loosing trades) * Rs 1 (loss in each trade)= Rs 3 (This is loss ignoring transaction charges)

Total Profit = 21-3 = Rs 18

Scenario 2- 
Winning Trades- 5
Loosing Trades- 5

This means the Winning Ratio is just 50%

Lets assume all the trades have RR Ratio of 1:3. It means each trade profit's Rs 3 in each winning trade and loses Rs 1 in losing trade.

So Reward (Profit) = 5 (winning trades) * Rs 3 (profit in each trade) = Rs 15 (This is profit - ignoring transaction charges)
Risk (Loss) =  5 (loosing trades) * Rs 1 (loss in each trade)= Rs 5 (This is loss ignoring transaction charges)

Total Profit = 15-5 = Rs 10 
It means you can make profits even if you have 50% profitable trades.

Scenario 3- 
Winning Trades- 3
Loosing Trades- 7
( I am sure even with little analysis one can achieve this)

This means the Winning Ratio is just 30% and trader is losing out on 70% of the trades.

Lets assume all the trades have RR Ratio of 1:3. It means each trade profit's Rs 3 in each winning trade and loses Rs 1 in losing trade.

So Reward (Profit) = 3 (winning trades) * Rs 3 (profit in each trade) = Rs 9 (This is profit - ignoring transaction charges)
Risk (Loss) =  7 (loosing trades) * Rs 1 (loss in each trade)= Rs 7 (This is loss ignoring transaction charges)

Total Profit = 9-7 = Rs 3
Wow that's the news. Even a poor fellow with 30% winning trades (Success Ratio) is making profit.

And this is what it is.

You don't need 90% winning trades to make profits in market. You need proper Risk Management along with proper Money Management.

In my Trading Advisory Application the focus is on Risk and Money Management. Trading Advisory Application is an online tool built by us to reach our subscribers with detailed reasoning of and analysis of a trade. Here you will find that every recommendation is coupled with an analysis and reasoning. The trading style is – Positional with delivery in cash segment. Objective is to make 30% to 50% profit during the year.


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up

Tuesday, November 29, 2016

Range breakout in Quess Corp can yield 16%

Quess Corp is a Technology Services, Staffing Services, Industrial Asset Management and Facility Management provider. The company is listed in July 2016.

Lets analyse Quess Corp on Technical Chart from short term trading perspective.
After its listing in July 16 the stock was trading in a broad range. This range is between 520-630.

We know breakouts can yield fast gains if traded with proper risk management in place. For those who are new to Technical Analysis- breakout is a large movement in price couple with high volumes taking stock to a new trading range.

Here are two different chart views of Quess Corp. Both the views are on Daily time frame.
The first chart below is closer picture.


Two things to observe here. (1) Today dated 29 Nov the stock has taken out an important resistance near 630. (2) The volumes are substantially higher as compared to the volumes in recent past.

The second chart below is a relatively larger picture.

On the larger picture here are the observations. (1) There are 3 failed attempts to breach the resistance near 630. First attempt on 5 Aug 16, second on 7 Oct 16 and then on 21 Oct 16. All the attempts failed to take the stock to new highs. However these repeated attempts weakened the resistance.
(2) The stock after its listing in July 16 has never traded below its listing price.

Based on above analysis our Premium Subscribers are recommended to buy Quess Corp. The detailed money management parameters like % of total trading capital to be utilised, Entry points and Risk Management parameters like stoploss multiple targets are updated to them.

Here are basic exit levels for all the readers.
Stoploss: 610
Target: 790


I had recommended a Buy in UJAAS to my premium subscribers on 28 Nov. The stock is now trading with a gain of 10%.

If you wish to regularly trade fast moving Mid and Small caps along with regular update/view on Nifty, subscribe to my Premium Services here.

Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up. 

Tuesday, November 22, 2016

Swing call analysis of 3 Large Cap stocks to finish Nov-16 series on a positive note

I usually prefer to adhere to trades on 'Positional' time frame. However, sometimes market offers opportunity of some quick trades. I feel current market scenario may be one such opportunity. I am referring to an expected bounce in Nifty.

Lets take a moment to understand set up of Nifty and its chart. Its just 2 days for Nov series to expire. In these 2 days we can expect short unwinding in Nifty futures. Nifty trading near support on weekly chart. Today's hammerish candle pattern on daily chart suggesting bulls are in action. Nifty is trading in oversold zone. All these points make me believe that there is a case for a bounce in Nifty. No one should forget we are just talking about a possibility here. Major trend is still down and hence one should have strict risk management in place.

 Here are 3 Swing Calls. All are on long side. Since this article is written on 22nd evening I am considering the entry price as closing price of 22nd Nov. On all the charts below I have marked entry, stoploss and target lines. The levels given below are cash levels. If you wish to trade these stocks in Futures you will have to adjust the price accordingly.

Reliance Industries: 
If you look at the larger picture, you will find that Reliance is trading at lower end of trading range. This lower end is acting as support for Reliance. Stock has refused to fall to a large extent during recent pressure in broader markets. You can see some increase in volumes too. Buy Reliance Industries near 1001 with a stoploss of 980 and target of 1025.



HDFC Ltd:
One of the low Beta stocks from Nifty family, HDFC Limited is showing the signs of a bounce from current level. As you can see on the chart the stock is trading in oversold zone near a support. It has also confirmed a Piercing Candlestick pattern on daily chart. Stock trading away from its 50 dma. This makes a case of a possible bounce. One can buy HDFC Ltd near 1250 with a stoploss of 1224 for a target of 1280.


Hindalco:
On larger (monthly) time frame, Hindalco is seen on the verge of a breakout. For this breakout to sustain Hindalco can show a quick upward move on smaller time frame. A nice extended candle with piercing pattern tells that bulls are back in action. Maintain a stoploss at 158 and Buy Hinalco near 166.50 for a target of 178.5


 Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  
  

Saturday, November 5, 2016

5 hot stocks & their levels to enter during correction- An update

You might have read my article ‘5 hot stocks & their levels to enter during correction’ which I had written on my blog in Sep 2016.

Many of my readers requested me for an update on the stocks which I had recommended in that article. Here is update on all the 5 stocks-


1.     Ajanta Pharma:
The stock has corrected almost 8.5% from the levels when I has published my last article. Currently the stock is trading near 1876. My recommended levels to buy were 1700-1650-1565. There is still some more wait for these levels to come. We can best expect that we shall get those prices, at-least the first one at 1700. If the stock moves down to 1720 kind of level, I would recommend you to start accumulating Ajanta Pharma.

2.     Asian Paints:
The stock has corrected by almost 12% since the time of last article. Now trading near 1043. The stock has reached its first support level, precisely at 1025, as recommended in earlier article. One can start accumulating at current levels in small quantity. Further levels, which I would be looking forward to are 970 and 920.

3.     Pidilite Industries:
Pidilite has registered a low of 648 in Sep. Hope to get the same or even better levels to enter again. I am looking forward to 625. Let’s see.

4.     Tata Motors:
The earlier levels which I had mentioned were 470 and 425. Stock is currently trading at 512. We still have some wait here. In case of Tata Motors, now it seems unlikely that the stock will correct to 425, unless there is some negative news. A level near 470 is a level which I would be looking forward to.

5.     Ultratech Cement:
The levels to enter are supposed to be around 3300. Good stocks corrects very little as usually the demand is high. So as is the case with Ultratech Cement. So far it has corrected only 6% from its top. However its not a good idea to enter at dearer price. Patience is the key here. You never know, you will get a discounted price near 3300.

Here is my philosophy of entering into a stock near support. I feel more comfortable when stock start showing (some) gains immediately after I enter the stock. When we take an entry near the support, it is unlikely that the stock will move further down- at-least it will not move down to large extent. In similar context you may wish to read Buying 'Breakout' Vs buying 'Near Support'


I believe in making keeping the things simple. If you wish to trade/invest in deliver based stocks over medium term- Prime Cash can be an ideal solution for you.


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  

Thursday, October 27, 2016

6 stocks Techno-Fundamental portfolio for Diwali-16 to Diwali-17

Diwali is a festival of prosperity. May all your wishes come true. I wish you a very happy, healthy and wealthy Diwali 2016.

Last year during Diwali -15 I had given 3 Diwali picks. Hope you would have benefited from it. All the 3 picks reached their targets.
You can refer last year's Diwali Picks article here. 

This year I have created a portfolio with a mix of Large, Mid and Small Caps with a horizon of one year. Hope this works well. You are advised to read the disclaimer below this article before investing/ trading this portfolio.

This portfolio is available to our Premium subscribers as well as to Free subscribers. However, possible entry levels with proper followup is available only to Premium subscribers.

To subscribe to our premium services click here

1. Alkyl Amines Chemicals Ltd.
The stock has formed nice anticipated continuation wedge on monthly scale. Volumes are showing substantial activity. Stock is trading at a PE of 15.
Stoploss: 310
Target: 570 & 660



2. Gufic Biosciences Ltd.
I love this pattern. A correction after breakout. Correction takes back the stock to an important support. The demand increases and the rally resumes.
Stoploss: 35
Targets: 55 & 71



3. HCL Technology: 
Swimming against the stream. HCL Tech chart is different as compared to all other IT companies. Trading near good support. Demand is expected to rise here.
Stoploss: 730
Targets: 940 & 1030




4. V2 Retail: 
Technical bet among all odds. Clean rounding bottom without a substantial resistance nearby can take this stock to our targets.
Stoploss: 115
Target: 235 & 360



5. Bharat Electronics Ltd (BEL): 
Govt of India enterprise, a giant. A ascending triangle formation can lead to the stock to new highs.
Stoploss: 1180
Target: 1565& 1710



6. Premco Global Ltd: 
This one is a microcap textile company. Technicals and Fundamentals looks quite well placed. Trading volumes are less. However seems to be a good potential stock.
Stoploss: 555
Targets: 810 & 940


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  

Tuesday, October 25, 2016

Signet Industries - On the verge of Cup and Handle Breakout

Signet Industries, a company in Plastic Products.
The stock as seen on chart below is on the verge of a breakout This pattern is known as Cup and Handle pattern. The name Cup and handle arrived from its shape similar to a cup and its handle.

The same is marked on the chart. Typically the volumes increase just before breakout, that is during the handle phase.

In this case if the stock breaks out, has potential to reach its next resistance near 61. This is potential move of 41%


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  


Monday, October 24, 2016

Dr Lal Pathlab Limited (LALPATHLAB) - Sweet Spot

Dr Lal Pathlab a recent listing has been a slow mover since its listing in Dec 15. It has given us first breakout in  Aug 16.

After breaking stock has nicely corrected till the level of 990.
Currently stock is trading at a sweet spot near 1122.

I have marked possible zones on chart below.

Weekly Chart:

Daily chart:


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  

Thursday, October 20, 2016

Wednesday, October 19, 2016

Recent winners from my portfolio


Its been a while that I have been sharing my views and analysis over mail. This analysis is free for all the subscribers. However, simultaneously I am running premium service for my paid subscribers. Premium service includes following things:
1. A model portfolio of Small/Mid and Large Cap stocks.
2. Analysis (along with charts, stoploss, entry and target) of additional stocks which are not there in model portfolio. Most of these stocks are form F&O segments

Find below how we have done in recent past:
I had recommended following stocks (over and above model portfolio stocks to my paid subscribers). Here is the result of the stocks recommended:
Ceat Ltd recommended on 2 Sep at price of 952 for targets of 998,1043 and 1095. All the targets are done here. Total gain at highest target is 15%.

Jain Irrigation recommended on 10 Aug at price of 77 for targets of 82,91 and 107. Recommended to book profit around 93. Total gain at this target is 20%

ICICI Bank recommended on 19 Aug at price of 253 for targets of 258 and 270. All the targets are done here. Total gain at highest target is 7%

There are some more stocks however it is not possible to give a list of all the stocks here.
Currently the stock on hold is Trigyn Technologies.
All above stocks are over and above what I add through model portfolio.
To check what we have done in portfolio last month, refer the table below:



I offer this Premium service at cost of only Rs 9900/- for one year and Rs 5900 for 6 months. This is a very low cost as compared to current market trend. I believe a disciplined approach can make money in stock markets. Hence everything here is well planned and nicely executed.
If you wish to be a part of my Prime Services click this link to subscribe:

In case you have any questions- whats app / call me at 9371444875





Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.

 



Cerebra Intergrated Technologies Ltd. (CEREBRAINT) - Chart Speaks

Nice structure formation on daily chart. This is for a short term view and quick anticipated gains.
The chart is self explanatory.


Monday, October 17, 2016

Dalmia Sugar - What Next?

A typical formation on monthly chart in Dalmia Sugar suggests a nicely trade-able range.
Zone formation:
Demand at 100-84
Supply at 147-168


Tuesday, September 27, 2016

Marksans Pharma- Potential to double from current level

The stock is trading at an attractive level. I can see a potential for this stock to double from current levels. The time required for this can be 8-12 months.
You can see that the stock had broken out of resistance near 36.5 earlier in the month of Aug 14. After that breakout the stock rallied nicely to the levels of 115 to register a new high. As we know a huge run up can be followed by substantial correction, the stock moved all the way from high of 115 to around 36.5. This correction took place in the months of Jan and Feb 16.

The stock then consolidated near its support for almost 7-8 months till now. In the meanwhile stock tested a resistance near 57 on multiple occasions. We know the resistance tested often becomes weak. Currently stock is trading near 56-57. We expect stock to break out of the resistance to begin a new journey above 57. Next hurdle is near 96.




Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Adviser. Readers are advised to consult their Investment adviery before taking any decisions based on above write-up.  

Monday, September 19, 2016

Review on Dishman Pharma Analysis

You might recollect I had written an article on Dishman Pharma on 26 July 16. The article was about possible end of correction and start of a new bull run in the stock.

You can read the article with detail analysis of Dishman Pharma at the link below or alternatively read the brief out that article paseted below the link:
Correction likely to be over in Dishman Pharma

"it seems that Dishman Pharma has completed classic correction on monthly chart.

I have marked all the levels here on chart enclosed. You can see that the stock has broken out of resistance near 128-132 in month of Sep 15 and posted a high of 209.90 in Nov 15. Previous high of stock was 227 in Jan 2008. This high acted as a resistance when stock tried to break above all time high in Nov 15. Since then the stock has been correcting.  

The stock has posted a low of 127.95 in Jun 16. This is the same level from where stock had broken in the month of Sep 2015. Now the level is acting as support. We can assume that the stock is trying to take support at this level.

After posting low of 127.95 on 24 Jun 16 stock is showing symptoms of recovery. This is further emphasised by a double bottomish structure on 19 July 16. Currently stock is trading in a range. This range is between 127 and 148. The resistance near 148 (can bee seen on daily chart) may be broken sooner or later. If stock shows some correction from current level, that will be an accumulating opportunity. 
 
Next major resistance is near 165-170. We can expect stock to cross the hurdles this time to break all time high and start its next bull run."
Following chart was posted in the article on 26 July.

-----------------------------------------------------------------------
Coming back to current scenario. Charts are indicating that the stock has clearly broken out of its hurdles near 170 and is now trading above all its earlier monthly closing. The stock after reaching the level as indicated by arrow in above chart has come out of the important resistances.While writing this article the price of the stock is around 194. 
This is how current chart looks like:

Markets run in cycles of expansion and consolidation. The stock is currently in a expansion phase. There can be possible consolidation or some correction from current level. You are advised to do the due diligence before entering the stock.

Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Adviser. Readers are advised to consult their Investment adviser before taking any decisions based on above write-up.   

Sunday, September 18, 2016

Buying 'Breakout' Vs buying 'Near Support'

It has always been tough to decide on entry point in a stock. We know stocks keep giving us entry opportunities to enter. It is up to us where to grab the price. In this article we shall discuss about what are the pros and cons of each of the entry type as mentioned in the title of the article.

A stock looks very attractive on charts while moving up. It gives us feeling of making some quick bucks. At the same time a stock moving down is like a bad dream and we do not wish to touch it. However something which is falling means you are getting it at a cheaper price.

Let me first clarify with one example each as to what I mean by 'buying a breakout' and 'buying near support'

Breakout- 
Here are some characteristics of a breakout. A breakout is an action where stock moves beyond substantial Resistance. A sudden demand is created. Whole world starts buying the stock. There is a sudden jump in the stock price. Long green candles are seen on chart. Volume suddenly increases. In fundamental analysis parlance breakout investing can be compared with 'Growth Investing'. It is like buying something though it is costly, as the demand is still high. When I refer it in context of technical analysis, I mean the stock has already seen a substantial run-up, still I wish to buy it as there is further scope for it to move up.
This is how a breakout chart looks like-


Near Support: Here are some characteristics of a stock being near support. In this case stock is in the process of approaching substantial support. Demand is not evident on chart. Volumes are not indicative. Candlesticks still give no clue about potential future up move. This can be compared with Value investing in fundamental analysis parlance. When I refer it in context of technical analysis, I mean stock has seen a substantial fall and there is no indication of buyers interest in the stock, still I wish to buy it due to its low price and potential up move from the level.
This is how a stock near support looks like-

   Having seen what I mean by Breakout and Near support, now lets try and understand what are the pros and cons of taking each type of entry.

Pros and Cons of Entering a Stock on Breakout:
Pros:
  • We enter during price in momentum. Hence it has higher probability of continuing the upward movement.
  • Less Wait. We don't have to wait for price to start moving in desired direction.
  • Probable time to reach target is less, so some quick bucks can be made.
  • Easier to identify the stock as the stock is in news and found in most Stock Screeners
  • Higher confidence as you are with others who are also buying the stock.
Cons:
  • Stoploss is far from the entry, hence higher is the risk
  • Breakout can fail thereby giving you higher losses
  • You buy something which is costlier
Pros and Cons of Entering Near a Support:
Pros:
  • You Enter near support and hence the stoploss is very near.
  • Risk is less as you enter near a stoploss. Reward usually has better ratio with Risk.
  • You buy something which is cheap.
  • There is high probability that the institutional investors are buying these levels.
  • If you know how to identify a good support- you have higher confidence
  • Less probability of a stock moving below support
Cons:
  • Momentum is still downward, hence entry with low confidence
  • Long wait before the price starts moving up as there is high chance that the stock will consolidate near support.
  • Not found on most Stock Screeners
  • Probable time to reach target is usually higher
  • More 'unknown' factor
Both the cases have some Pros and some Cons. Its an individual's choice which one to enter. Each trader has his way and style of trading. Some like fast results and some other like to have lesser risk. I prefer to have good mix of both the entry types. In my portfolio, I prefer to have around 60% breakouts and 40% entries near support.

Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Adviser. Readers are advised to consult their Investment adviser before taking any decisions based on above write-up.  

Wednesday, September 14, 2016

5 hot stocks & their levels- to 'enter' during correction

It has mostly been the case with retail investors / traders that they 'buy' after rally and 'sell' after a fall. In short 'hamesha train chhut jati hai'. It is not a good idea to run behind a price and grab a stock at any 'cost'. Professional traders / investors wait patiently for a stock to arrive at a desired level. It is not advisable to get into a stock at current market price. Instead place an order at an expected level. Retail traders / investors buy at market price because they do not anticipate the levels before the elve reaches. While it is not guaranteed that we shall get all those anticipated levels, there is always a 'chance' we get a huge discounted price.
Here are some stocks which we can keep in the watch list for an anticipated fall during current (possible) correction. Market always give us an opportunity to enter, provided we should be ready to grab that opportunity. I have arrived at the levels purely on the basis of chart structure and possible support levels.

All these 5 stocks are fundamentally placed at a very strong position, however the prices at current level are not appealing. Markets do what we do not think. So at current level we may feel that the prices which are shown on these charts are too far to reach, however there is always a possibility of getting it.

1. Ajanta Pharma:
Ajanta pharma broke out of long consolidation during last week of July. That was good price to get into the stock. A strong support emerges near the level of 1700-1650-1565. At 1700 is a discount of 11% from current price. If one gets these levels there is high chance that the stock will resume after testing these levels.


2. Asian Paints:
One of the dream stocks to be in. While it does not give many opportunities to enter into, we can always anticipate one, instead of entering at high price. First level I shall watch for is 1025 and then 920. These are at a discount of 12% and 21% respectively.


3. Pidilite Industries:
 If you remember I had recommended this stock on breakout near 640. You can read that article here. If you missed it at that level, we can wait for the stock to reach the same level if the correction lasts for some time. The price of strong support is around 625-650. The discount from current level is 8.5%


4. Tata Motors:
After a dream run Tata Motors seem to have made a double top. If it corrects substantially from current level, the support emerges at 470 and then at 425. That's a 14% and 22% respectively.

 5. Ultratech Cement:
Ultratech Cement experienced one way rally after breaking out of 3330. This kind of rallies are expected to have substantial correction. Lets expect it to reach around 3330 in the days to come. That's a discount of 13.5% from current level.

Getting into a stock at right price requires lot of patience. Moreover, you never know whether they will surely get to anticipated price. However, if the stocks reach to those levels you have an attractive prices to enter into with heavy discount without any bargain.

Friday, September 2, 2016

Fundamental Vs Technical - is the debate worth?

There has always been a difference of opinion over methods of analysis in stock markets. These opinions are mostly the extreme thoughts.
Some representative opinions are-
'Fundamental Analysis is the only way to deal with the markets'
'Technical Analysis has no base and never works'
'Fundamental Analysis is useless for trading' 
'Learn Technical Analysis and make sure money in the markets'

I feel all these opinions are too extreme to consider. Nothing in this world is fully useless and nothing in the world is perfectly useful.

I too have my opinions on both the methods of analysis. Here are some thoughts on the subject-
Both Technical Analysis and Fundamental Analysis have their own advantages and disadvantages. 

It depends on you- which one (method) suits your style of investing / trading. 
It also depends on your 'type of personality'. 
It depends on what strengths you have. Take the Brain Test to understand whether you are Left brained or right brained. 
It depends on whether you are a trader or a investor.
It also depends on whether you are short, medium or long term trader/ investor.

While there is no substitute to fundamental analysis when it comes to right valuation of a scrip. There is not substitute to technical analysis when it comes to best risk management tool over a short period of time.

In fundamental analysis with the help of valuations you can decide how far stock can run in the long term as you can decide whether is stock has very high valuations with the help of ratios like P/E or P/B. On the other hand, with the help of technical analysis you can judge what market is thinking about the stock, whether market is still willing to take the stock to higher price. In short technical analysis tells you about the market sentiments. 

Frankly I feel Technical Analysis is a misnomer and should be renamed as "Sentimental Analysis".

One thing is for sure you can not do the short term trading with the help of Fundamental Analysis. Technical Analysis helps in understanding the short term trend, the momentum, areas where biggies are placing their buy and sell orders, areas where one should exit out of the position if it is not your favour etc. 
 At the same time if you are long term investor there is no alternative than to analyse a company using its fundamentals like balance sheet, P/L, cash flow, management quality, product etc. 

To conclude, I feel the comparison between the fundamental analysis and technical analysis is baseless. Comparisons have to be apple to apple and not apple to oranges.

If you are an Intra-day, Swing or a Positional trader use of Technical Analysis can enhance your chances of winning a trade. It offers you a better risk management tools. It helps you understand markets sentiments. There is also a flip side to it. Some traders fill they will make 'sure' money once they learn the technical analysis. Its not only about learning the technical analysis, its about practising it over a period of time. You can not become a good cricketer just by learning rules of cricket. you have to practice it hard.

My Online Interactive Course on Technical Analysis is followed by 6 months of practice sessions and life long support. It clearly spells spade a spade and is not designed to show 'rosy' pictures to traders. I don't believe there exists a formula for success in stock markets. Instead, I believe in strict risk management and hence the course contains ways and means of Risk Management and Money Management other than learning the Technical Analysis.

Wednesday, August 24, 2016

32% so far - Quick update to article on Gabriel written on 29 March 16

I had written an article on Gabriel on 29th March this year. The article was on anticipated breakout in Gabriel.

You can read that article here:

Stock Analysis- Gabriel India Lts.- Breakout of consolidation can double the price


Current update on Gabriel:
Gabriel has broken out the consolidation. The move which I was anticipating has come about, though a little late. 
Markets will test your patience. Situations will make you panic. You need to be persistent. There is no alternative if you wish to have winning trades.

This is how the stock looks on chart after it has broken out of consolidation. Currently trading near 119. It was near 90 when article was written. Lets expect the move to continue to achieve our targets.
That is a move of around 32% in 4 and half months. However it has a large potential yet to conquer.


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisory before taking any decisions based on above write-up.

Monday, August 22, 2016

Inverted Head & Shoulder in CIPLA

Last week Cipla has moved up over 9%. This move has come after a good 'basing' near its monthly support at 460-470 levels.

You may recollect my view through an article on Pharma sector and a short analysis of Cipla in the same article. The anticipated 15% move which I was expecting has come about in most pharma stocks since then. Cipla has also moved by around 12% since then. 

Here is further analysis on Cipla.
On weekly chart you can see that stock, after 'basing' near support at 460-470 levels, now crossed the hurdle at 540 last week. The weekly breakout has come with good volumes too. Overall structure has formed an inverted Head & Shoulder pattern on weekly chart. 

We need to understand here that the inverted H&S is nothing but an indication of cycle change from 'Lower Top Lower Bottom' to 'Higher Top Higher Bottom'. In my course on Technical Analysis for Positional/Swing Traders, this topic is covered in details.

Coming back to the chart, you can see that the neckline is broken with a good conviction. This breakout can take stock to further highs. One should also observe that there is an hurdle coming up near 570. However it should not be difficult for bulls to to take that out.


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.

Tuesday, August 9, 2016

Channel breakout in Britannia

Britannia Industries chart had a typical breakout formation yesterday. Since last one year, precisely since Aug 15, chart was trading in a channel. Yesterday, the stock has exploded with volumes out of this trading channel. This has also confirmed Up Flag Pattern formation. This Flag would be more prominent on weekly chart.(weekly candle yet not completely formed). There is support area near 2995.

This breakout is expected to push the stock prices to higher levels. 


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  

Monday, August 8, 2016

Bharat Forge Trading near support

During the days of Jan & Feb 2015 Bharat Forge was one of the favourites of market. The stock has seen healthy correction between April 15 and July 16. That period is more than a year.
I am tracking Bharat Forge since Nov 15 for a possible up move after the correction. However it took long for this stock the start the well deserved move.

Let me explain the larger picture first. On monthly chart you can see that there is a good demand area near the levels of 712 and 823. This is where the biggies would have accumulated the stock slowly and gradually. This accumulation was expected to burst at some point. We have seen stock gaining 12% on 5th Aug. Notice the volumes with which it has zoomed. A positive divergence on monthly chart is confirming the momentum.


On weekly chart you can see similar observations where the stock is indicating at the possible change of cycle from ‘lower low lower high’ to ‘higher high higher low’. There are some hurdles along the way. However bulls are seen powerful enough to take out these hurdles.

A detailed alert with levels (entry, stoploss and targets) is issued to paid subscribers. For more details you can call me on 9371444875.


 Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  

Friday, July 29, 2016

Major Indices ready for a correction?

Just wanted to share a quick update on Indices.

Its all green everywhere. Nifty is cruising everyday. We know markets can't move one way. A correction is inevitable and healthy as well. Has the time come for a correction?
Nifty daily chart is indicating at a negative divergence. This is not a very comfortable situation. A correction ( can't really spell out the quantum of the correction).
Next good support for Nifty is at 8540.

Nifty, Bank Nifty, Nifty Mid Cap and Nifty Small Cap charts can bee seen below:

 Nifty daily chart:

Bank Nifty Daily

Nifty Mid cap Daily

Nifty Small Cap Daily




Tuesday, July 26, 2016

Correction likely to be over in Dishman Pharma

Dishman Pharma is a Midcap Pharma company. It is a supplier to major pharma companies world over.

Here is an analysis of Technical Structure of Dishman Pharma. 

Before getting into Dishman Pharma analysis, would like to give you a post analysis update of a related study of Pharma sector (Large Cap Pharma Companies) I had done on 29th June. You can read that analysis here Pharma stocks likely to move over 15% from current levels
Movement in Major Pharma stocks since 29th June is:

Dr Reddy: 12%
Lupin: 13%
Sunpharma: 4.5%
Auropharma: 10%
Biocon: 12%
Lupin: 5%

Coming back to Dishman Pharma - it seems that Dishman Pharma has completed classic correction on monthly chart.

I have marked all the levels here on chart enclosed. You can see that the stock has broken out of resistance near 128-132 in month of Sep 15 and posted a high of 209.90 in Nov 15. Previous high of stock was 227 in Jan 2008. This high acted as a resistance when stock tried to break above all time high in Nov 15. Since then the stock has been correcting.  

The stock has posted a low of 127.95 in Jun 16. This is the same level from where stock had broken in the month of Sep 2015. Now the level is acting as support. We can assume that the stock is trying to take support at this level.

After posting low of 127.95 on 24 Jun 16 stock is showing symptoms of recovery. This is further emphasised by a double bottomish structure on 19 July 16. Currently stock is trading in a range. This range is between 127 and 148. The resistance near 148 (can bee seen on daily chart) may be broken sooner or later. If stock shows some correction from current level, that will be an accumulating opportunity. 
 
Next major resistance is near 165-170. We can expect stock to cross the hurdles this time to break all time high and start its next bull run.


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.  


Wednesday, July 13, 2016

Beginning of a new bull run in Mahindra & Mahindra

This Auto major is one of the most versatile players in the sector. They have presence in all the categories from agriculture to luxury cars to two wheelers.

Mahindra and Mahindra is cruising with the new initiatives in terms of product category, which is making them a strong player lesser prone to sector fluctuation as compared to other players.

On Technical charts there is a classic formation. You can see from the chart enclosed here that the stock has been trading in a broad range since Sep 2014 till June 2016. This range was between 1140 to 1410. In June 2016 stock closed beyond this range at a price of 1429. This suggests a range break out on monthly chart.

Before the period consolidation (trading range of Sep 2014-June 2016) the chart had given a nice run up of 776 to 1407 in a period from Sep 13 till Aug 14. That run up has given more than 80% returns to investors. The run up had come after a break in range just before this run up.

Similar pattern seem to have been emerging on the chart. This is good for medium term investors who are looking to invest for a period of 6 months to a couple of years.

Currently stock is trading near 1475. On daily chart there is a support near 1400. The prices can correct upto that level which will be an accumulation opportunity to investors.

To generate similar trading / investing ideas get yourself trained on classical charting techniques. In my course I cover this kind of traditional techniques to generate decent returns over medium term and short term. Check the courses here 





Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up.