July 31, 2016
July 30, 2016
Top gainers this week
NOTE:
- all charts are weekly charts and not EOD.
- buy stocks making new highs
- risk per trade shd be under 1% of capital
JINDALSTEL up 21%
- all charts are weekly charts and not EOD.
- buy stocks making new highs
- risk per trade shd be under 1% of capital
JINDALSTEL up 21%
July 29, 2016
BANK NIFTY weekly charts
- trend is up
- immediate resistance 19200 spot
- weekly close above this can lead to rally to 21000
- all time high is 21000 spot
- immediate resistance 19200 spot
- weekly close above this can lead to rally to 21000
- all time high is 21000 spot
NIFTY weekly charts
- trend is up
- immediate resistance 8650 spot
- weekly close above this can lead to rally to 9000
- all time high is 9120 spot
- immediate resistance 8650 spot
- weekly close above this can lead to rally to 9000
- all time high is 9120 spot
Market outlook
Daily charts
- trend is up on daily charts
- there is visible slowdown in upside momentum
- average move is 20 points/ day this month
- option writing points to support at 8500 and resistance at 9000
5 min charts
- markets traded in first hour high low throughout the day
- nothing to do
- trend is up on daily charts
- there is visible slowdown in upside momentum
- average move is 20 points/ day this month
- option writing points to support at 8500 and resistance at 9000
5 min charts
- markets traded in first hour high low throughout the day
- nothing to do
How Many Stocks Should You Own?
Is 10 the right number of stocks to own?
Is 20 the right number?
Is it 50…or 100?
The number of stocks you own has a huge effect on your performance. In this essay, I’ll walk you through my thinking on this critical topic. I hope it helps you make great decisions with your own portfolio.
How the Pareto Principle Can Make You Wealthy
Read more at https://katusaresearch.com/how-many-stocks-should-you-own
Is 20 the right number?
Is it 50…or 100?
The number of stocks you own has a huge effect on your performance. In this essay, I’ll walk you through my thinking on this critical topic. I hope it helps you make great decisions with your own portfolio.
How the Pareto Principle Can Make You Wealthy
Read more at https://katusaresearch.com/how-many-stocks-should-you-own
July 28, 2016
Market outlook
Daily charts
- trend is up on daily charts
- markets close at highest level this year
- holding 8500 will be bullish in AUG
- option writers do not expect 8500 to break next month
- call writing resistance at 9000 (AUG series)
- trend is up on daily charts
- markets close at highest level this year
- holding 8500 will be bullish in AUG
- option writers do not expect 8500 to break next month
- call writing resistance at 9000 (AUG series)
July 27, 2016
Market outlook
Daily charts
- trend is up on daily charts
- today, markets closed flat with some volatility
- AD flat, VIX negative
- option writing support 8500 resistance 8700
- Next series, levels are 8500-9000
- trend is up on daily charts
- today, markets closed flat with some volatility
- AD flat, VIX negative
- option writing support 8500 resistance 8700
- Next series, levels are 8500-9000
July 26, 2016
Market outlook
Daily charts
- trend is up on daily charts
- after yesterday's rally, markets closed in the red
- advance decline was negative
- immediate supports around 8500-8480 spot
- resistance seen around 8650 (weekly charts)
- trend is up on daily charts
- after yesterday's rally, markets closed in the red
- advance decline was negative
- immediate supports around 8500-8480 spot
- resistance seen around 8650 (weekly charts)
Mid-Cap Stocks Valuation signals danger
The valuation of mid-cap stocks is at its highest since early 2008, when Indian markets were at their peak, and tumbled soon after.
Source: http://alphaideas.in/2016/07/26/chart-mid-cap-stocks-valuation-highest-since-jan-2008/
Source: http://alphaideas.in/2016/07/26/chart-mid-cap-stocks-valuation-highest-since-jan-2008/
July 25, 2016
Neowave analysis by Vivek Patil
....
strength sustaining above the 9-day range could invalidate ET argument. In such a case, the better label for last week’s pause would be “x”, which would turn post-Brexit rally into a Double.
And, on one higher degree, the entire post-Brexit rally consisting of the Double Combination would be considered as “a” leg of the larger 2nd Corrective which opened after Brexit.
All in all, watch the 9-day range as a crucial zone in the Expiry week. Strength sustaining above the range would continue the rally, but top of “B” would be the next crucial level to determine the variation of Expanding Triangle applicable.
Read more at http://content.icicidirect.com/ULFiles/UploadFile_2016725104610.asp
strength sustaining above the 9-day range could invalidate ET argument. In such a case, the better label for last week’s pause would be “x”, which would turn post-Brexit rally into a Double.
And, on one higher degree, the entire post-Brexit rally consisting of the Double Combination would be considered as “a” leg of the larger 2nd Corrective which opened after Brexit.
All in all, watch the 9-day range as a crucial zone in the Expiry week. Strength sustaining above the range would continue the rally, but top of “B” would be the next crucial level to determine the variation of Expanding Triangle applicable.
Read more at http://content.icicidirect.com/ULFiles/UploadFile_2016725104610.asp
Market outlook
Daily charts
- markets breakout from trading range formed over past 8-10 days
- trend is still up...
- support now stands increased to 8480 ... the lower end of the recent range
- weekly close above 8600 can lead to retest of 9000 levels
- markets breakout from trading range formed over past 8-10 days
- trend is still up...
- support now stands increased to 8480 ... the lower end of the recent range
- weekly close above 8600 can lead to retest of 9000 levels
July 24, 2016
A statistical analysis of failures
So why does almost everyone believe that one needs a perfect hit rate to achieve good returns? This myth is quite common as one can see from comments in the media, where people are surprised when some well-known investor has a losing position.
I think it speaks to the ignorance of the following points
- A losing position has a downside of 100% at the most, but a winning position can go up much more than that and cover for several such losses. Let’s say you have a portfolio of three stocks and two go to 0, but the third stock is a 5 bagger. Even in such an extreme example, the investor has increased his portfolio by 50% with equal weightage in all the three positions.
- Let’s take the previous example again and instead of equal weightage, let’s say the two failed position were only 10% of the portfolio, whereas the winning position was 90%. In such a happy scenario, the overall portfolio is up 4.5X.
Read complete article at http://valueinvestorindia.blogspot.in/2016/07/a-statistical-analysis-of-failures.html
I think it speaks to the ignorance of the following points
- A losing position has a downside of 100% at the most, but a winning position can go up much more than that and cover for several such losses. Let’s say you have a portfolio of three stocks and two go to 0, but the third stock is a 5 bagger. Even in such an extreme example, the investor has increased his portfolio by 50% with equal weightage in all the three positions.
- Let’s take the previous example again and instead of equal weightage, let’s say the two failed position were only 10% of the portfolio, whereas the winning position was 90%. In such a happy scenario, the overall portfolio is up 4.5X.
Read complete article at http://valueinvestorindia.blogspot.in/2016/07/a-statistical-analysis-of-failures.html
Trading as a way of life - nice video
Bowes-Little grew up in San Francisco. He gained a scholarship to Brown University in Providence, Rhode Island where he studied philosophy and economics, and later studied at the London School of Economics.
Bowes-Little's first career was as a professional basketball player, after which he worked as a trader for investment banks in New York and London, including the position of vice president, credit trading at Goldman Sachs, while pursuing a second career as a hip hop artist and poet in the evenings since 2007 under the name Metis (a reference to the Greek language, which he describes as "perceiving the true essence of things").
He has written an autobiography, The Trade, which has been picked up by a literary agent and with which he has tried to interest Hollywood directors with a view to turning it into a film.
July 22, 2016
BANK NIFTY weekly charts
Weekly charts
- trend is up
- stiff resistance around 19200 levels
- support 17900-17000 levels
- trend is up
- stiff resistance around 19200 levels
- support 17900-17000 levels
Market outlook + weekly charts
Weekly charts
- trend is up on weekly charts
- stiff resistance seen around 8650 levels
- weekly close above 8650 can lead to retest of all time highs
- support around 8000-8200 levels
- trend is up on weekly charts
- stiff resistance seen around 8650 levels
- weekly close above 8650 can lead to retest of all time highs
- support around 8000-8200 levels
July 21, 2016
CHENN PETRO attempting a breakout above 2015 highs
Stocks making new highs are better than stocks making new lows
Market outlook - has the market topped out?
Daily charts
- today we had a high formed in NF fut around 8888 levels... 300 points above the normal
- in a separate post, I have hinted this means dabba operators expect markets to come down
- note today's open/ high in future ... this effectively stops out all dabba traders having a short position
And this is how the open interest figures look like... limited upside!
5 min charts... posted for reference only
- the entire perspective is messed up
- today we had a high formed in NF fut around 8888 levels... 300 points above the normal
- in a separate post, I have hinted this means dabba operators expect markets to come down
- note today's open/ high in future ... this effectively stops out all dabba traders having a short position
And this is how the open interest figures look like... limited upside!
5 min charts... posted for reference only
- the entire perspective is messed up
History suggests leaving Europe is great for Britain
The almost universal disdain for what Britain did on June 23 is based on four mistaken perceptions. First, most people seem to believe that the country voted against free trade and globalization. This voters did not do. They voted against being members of the European Union (EU), an institution bent on creating something like the United States of Europe, establishing a common European sovereignty over all its members. Voters have not said that they want to isolate Britain. On the contrary, they have said that they want to remain a globalized country and very close to Europe.
Second, most people got the impression that the voters who wanted to get out of the EU were primarily manual laborers, people with lower-than-average education, those who live outside fashionable London, and the elderly. This characterization is not entirely true. Many young, well-educated, fashionable Londoners and southerners voted Leave. Moreover, in any case, the implied idea that the opinions of voters who fall into the former categories should somehow be disqualified is relevant only if the decision had been made not in a full democracy but in one in which the votes of the younger, richer, more intellectual Londoners had extra value.
Read more at https://uk.finance.yahoo.com/news/keep-calm-brexit-history-suggests-090046436.html
Second, most people got the impression that the voters who wanted to get out of the EU were primarily manual laborers, people with lower-than-average education, those who live outside fashionable London, and the elderly. This characterization is not entirely true. Many young, well-educated, fashionable Londoners and southerners voted Leave. Moreover, in any case, the implied idea that the opinions of voters who fall into the former categories should somehow be disqualified is relevant only if the decision had been made not in a full democracy but in one in which the votes of the younger, richer, more intellectual Londoners had extra value.
Read more at https://uk.finance.yahoo.com/news/keep-calm-brexit-history-suggests-090046436.html
Could India Be the First to Get Rid of Cash?
"Black money" -- the colloquial name for a vast network of off-the-book cash transactions and unbanked savings -- is one of India's biggest scourges. Amounting to as much as $460 billion a year, bigger than the GDP of Argentina, all that money lies beyond the reach of the tax authorities, creditors and anti-corruption investigators.
Efforts to bring it into the open have struggled. Ironically, though, they may be setting up India to leapfrog past other, far more advanced economies into a future without any cash at all.
India's black money pile is unusually large for several reasons. First and foremost, about half the country's output comes from the small, informal sector, where cash transactions are the norm. Meanwhile, taxes are cumbersome to pay and easy to avoid. To collect revenue, India’s government has to rely on indirect levies such as sales and excise taxes, which are distortionary and regressive, rather than on income tax. Direct taxes contribute only 35 percent of the take in India, compared to the OECD ideal of two-thirds.
Read more at http://www.bloomberg.com/view/articles/2016-07-21/india-s-cashless-future
Efforts to bring it into the open have struggled. Ironically, though, they may be setting up India to leapfrog past other, far more advanced economies into a future without any cash at all.
India's black money pile is unusually large for several reasons. First and foremost, about half the country's output comes from the small, informal sector, where cash transactions are the norm. Meanwhile, taxes are cumbersome to pay and easy to avoid. To collect revenue, India’s government has to rely on indirect levies such as sales and excise taxes, which are distortionary and regressive, rather than on income tax. Direct taxes contribute only 35 percent of the take in India, compared to the OECD ideal of two-thirds.
Read more at http://www.bloomberg.com/view/articles/2016-07-21/india-s-cashless-future
July 20, 2016
Some breakouts based on top gainers analysis
Simple trading strategy... identify top gainers, check chart and see if there is a breakout. If yes, trade long with risk per trade under 1%.
Stoploss for all stocks is low of breakout bar or this month's low or any visually obvious support.
TATA METALLIC up 20%
Stoploss for all stocks is low of breakout bar or this month's low or any visually obvious support.
TATA METALLIC up 20%
Market outlook
Daily charts
- trend is up on daily charts
- today markets closed in positive; AD was 2:1
- weekly close above 8600 can give a rally of 300-400 points
5 min charts
- difficult trading day as breakout failed and markets became rangebound
- trend is up on daily charts
- today markets closed in positive; AD was 2:1
- weekly close above 8600 can give a rally of 300-400 points
5 min charts
- difficult trading day as breakout failed and markets became rangebound
July 19, 2016
Market outlook
Daily charts
- trend is up on daily charts
- some signs of weak selling but nothing to indicate trend reversal
- option writing support 8400 resistance 8600
- trend is up on daily charts
- some signs of weak selling but nothing to indicate trend reversal
- option writing support 8400 resistance 8600
July 18, 2016
Market outlook
Daily charts
- trend is up on daily charts
- strong resistance emerging near 8600 levels
- option writing support 8400; next support 8200
- today markets closed in negative; AD negative
- trend is up on daily charts
- strong resistance emerging near 8600 levels
- option writing support 8400; next support 8200
- today markets closed in negative; AD negative
Vivek Patil's weekly neowave analysis
...
As of now, “D” is bigger than “B”, which is required for “Expansion”. Price-wise, “D” is twice the size of “B”. The “Running” variation of Expanding Triangle would require both B-D line & A-C line to slant downwards.
This is contrast with “Horizontal” variation of Expanding Triangle, wherein B-D line should be slanting upwards and A-C line slanting downwards.
Therefore, to confirm the “Running” variation, “D” should end below the top of “B”. This would mean “D” should end below 23rd Jul’15 high of 28578 (Nifty 8655) to maintain the “Running” variation.
However, till the Index starts making lower top lower bottom below the 0-x line, which is considered as the Baseline for “D”, the short term trend would be assumed as UP as per Dow Theory (higher top higher bottom).
However, if the “D” leg crosses the top of “B”, then the structure from Mar’15 onwards could turn into “Irregular” variation, which in fact is a most common variation of Expanding Triangle variation OR a Neutral Triangle, the NEoWave details of which would be revealed next week, if required.
Read more at http://content.icicidirect.com/ULFiles/UploadFile_2016718102917.asp
As of now, “D” is bigger than “B”, which is required for “Expansion”. Price-wise, “D” is twice the size of “B”. The “Running” variation of Expanding Triangle would require both B-D line & A-C line to slant downwards.
This is contrast with “Horizontal” variation of Expanding Triangle, wherein B-D line should be slanting upwards and A-C line slanting downwards.
Therefore, to confirm the “Running” variation, “D” should end below the top of “B”. This would mean “D” should end below 23rd Jul’15 high of 28578 (Nifty 8655) to maintain the “Running” variation.
However, till the Index starts making lower top lower bottom below the 0-x line, which is considered as the Baseline for “D”, the short term trend would be assumed as UP as per Dow Theory (higher top higher bottom).
However, if the “D” leg crosses the top of “B”, then the structure from Mar’15 onwards could turn into “Irregular” variation, which in fact is a most common variation of Expanding Triangle variation OR a Neutral Triangle, the NEoWave details of which would be revealed next week, if required.
Read more at http://content.icicidirect.com/ULFiles/UploadFile_2016718102917.asp
Elliott Wave Counts of Nifty for All Time Frames as on 18 July 2016
Elliott Wave Counts of Nifty for All Time Frames as on 18 July 2016
Today I am preparing all time frames Elliott Wave analysis report of Nifty. I was not updating longs term wave counts of Nifty because there was lack of clarity but thought of updating today as last long term analysis report I prepared 06 months back on 05 Jan 2016.
This analysis report will cover all time frame wave counts of Nifty, medium/long term outlook of Nifty and some important points useful for Elliott Wave Theory learners. So, let’s start with monthly chart.
As we know, Elliott Wave Theory is a never ending wave’s cycle starts from the birth/beginning of any financial script. Nifty born in 1995 and we need to see chart covering move from 1995 for Elliott Wave theory analysis and move from 1995 can be seen only on monthly chart. So, let’s start from the beginning.
Read more at http://sweeglu.com/elliott-wave-counts-of-nifty-for-all-time-frames-as-on-18-july-2016/
The Infosys turnaround: hype or reality?
The highly disappointing first-quarter earnings of Infosys Ltd have raised questions about claims of a turnaround under way at the company. I continue to be amused, though, at the alacrity with which sell-side analysts and excitable TV anchors/commentators rush to conclusions and create demigods out of mere mortals when the complexity of a turnaround in an increasingly complex international environment is still to be fully played out. This complex question needs to be analysed under three heads.Firstly, an understanding of what constitutes a successful turnaround. The three phases are: fixing the structural issues (revenue, costs and organization), turning around the morale of employees and investors, and finally successfully implementing the new business model through acquisition of new revenue streams. Infosys chief executive Vishal Sikka can be credited with achieving the first two. It must be remembered, though, that when one inherits a humongous cash reserve of a few billion dollars, it is relatively easy to...
Read more at http://www.livemint.com/Opinion/psyxoJt9ZNIe0d9dhccnyK/The-Infosys-turnaround-hype-or-reality.html
Are markets overheated?
| Index Name | Closing Index Value | P/E | P/B | Div Yield |
| Nifty 50 | 8541.4 | 23.43 | 3.47 | 1.21 |
| Nifty Next 50 | 21579.4 | 27.7 | 2.98 | 1.55 |
| Nifty 100 | 8700.1 | 24.01 | 3.38 | 1.27 |
| Nifty 200 | 4499.95 | 25.04 | 3.2 | 1.25 |
| Nifty 500 | 7194.4 | 26.72 | 3.04 | 1.22 |
| Nifty Midcap 50 | 3547.65 | 49.97 | 1.79 | 1.43 |
| Nifty Free Float Midcap 100 | 14282.2 | 33.89 | 2.37 | 1.47 |
| Nifty Alpha 50 | 8878.33 | 28.39 | 3.97 | 0.61 |
| Nifty Quality 30 | 2177 | 28 | 7.17 | 1.46 |
| Nifty Full Midcap 100 | 4347.53 | 41.08 | 2.13 | 1.11 |
| Nifty Midcap 150 | 4688.28 | 36.28 | 2.52 | 1.05 |
| Nifty Smallcap 50 | 3168.04 | 39.2 | 1.16 | 1.25 |
| Nifty Full Smallcap 100 | 3062.72 | 32.76 | 1.35 | 1.1 |
| Nifty Smallcap 250 | 4673.6 | 1530.54 | 1.56 | 0.99 |
| Nifty MidSmallcap 400 | 4677 | 53.26 | 2.1 | 1.03 |
July 16, 2016
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