Investment pick: auropharma 512-530 sl 490 target 680/740/840/904

AUROPHARMA, :12/28/2007
Close: 536
T1: 543.277 T2: 557.512
T3:580.739 1xR:576.75
Narrowsl: 520.05
WideSl: 502.47
SwingHigh: 548.4 CMP: 536.0
SwingLow: 511.5 SLPivot: 520.0
ImpulseTargetZone :594.975-618.201
2xAtr14Stop: 36.1464
TrailingSL: 530.82
Lower Chan: 521.767 Upper Chan: 557.615
SupportLine: 521.767 ResLine: 532.925

P.S: I might miss yahoo messages since i tend to not be on my pc that much now that I am in Delhi. So the best way to catch me is via email.

Got a 220 fi which needs to be burned in.
Also got my quad core pc with 4gb of ram operational.
Now just need to find something that can stress this pc :)

Trading is going all right.
Last year at one point of time I was up 100% and then I had a nasty 30% drawdown.
Thats when I stopped trading for a few months and came up with my new+improved trading systems with hedging.
The new systems are 100-300% with 10-30% risk. They seem to be working out allright so far. Only been trading them for 2 months (22% earnings with 10% drawdown so far)

So right now trading some new stuff.
Hard to post much on the new systems since they are all live/intraday quick in/out
I think I posted the stats earlier.... thats one of the reasons this blog is so inactive. There is just no way to post the picks live during mkt hours.
So if you want trade setups during mkt hours add my yahoo id: rajak1981@yahoo.com
and i'll pass on any intraday setups i get.
Will post eod/investment type setups on this blog as usual

Auro chart+report later tomorrow.

Efficient markets

I think the basic call i gave at close of pre muhurat session was we will gap up touch 5780-5800 and we will most likely not sustain.
Above 5710 , 5780 was justified however the level was only hit in spot and not futures. Entry advised was 5690 nf and then a possible pyramid above 5710.
During the muhurat session nifty spot moved perfectly and touched 5780, however
it seems futures players were already aware of res at 5780 and spot couldn't hold the level for even 1 min with nf not even going above 5710.
So now looks like more damage coming.
Be wary of the 5 year bull market cycles which are being completed.
Bias shifts to short side below 5650 , 60:40 once again.

The hedge given was ster.
initial call short at 1040 or below 1020 sl 1060/1049 target 1000/980/930.
Closed at 988.
Might weaken till 930 if bears keep pushing.

Happy Diwali

Happy diwali to everyone.
I am hoping bulls who had the guts to form support for nifty will get a
target of 5780-5800 with a gap up. Anything beyond that is a bonus.
critical level to regain uptrend+momentum = 5860-5885.
View on trend neutral.
Trading long and short daily.

Nifty support at 5665-5656

Looking to buy there.
hedge for bulls is ster

Looking to buy, pure timing no levels

Look to buy,
optimal day for btst is always session prior to muhurat trading.
volumes on muhurat trading are usually tiny but we always gap up.
almost a free 1-2%.

Res at 6000 nifty and 20k sensex were pointed out earlier. At 6000 I suggested shorting/hedging for most people. I myself have been shorting something almost every session for the past 5 sessions.
But today i'll look to play with a mildly bullish bias.
Keep in mind the buying is to be done with a goal of btst.
So buy towards the end of the session.

These days my bias is only 60:40 never 100:0.


The previous hedge IT sector/exporters were reccomended on the 31st of october.
CNXIT opened at 4800 on 31st and on 7th it closed at 4500
loss of around 6%
31st oct nifty opened at 5870 and on 7th nov it closed at 5773
which is a loss of around 3%.
So would a proper hedge have worked?
I think so.

Success

Success=Work+Play+shut up

Source: Einstein.

Market can go higher if bulls hold 5800

Fed rate cut.
What does that mean? fiis might pump in more cash.
$ to fall more.
Re to rally. Tech/exporters will remain under pressure but market might try
5996/6083/64xx
So far 599x in futures and 5970 in spot have been good res.
Should probably take them out.
Stoploss for the bullish view is 5800.

Yesterday the support from triangular trendline at 5885 or so was pointed out during the final dip. That was the place to enter for aggressive bulls with a small stop and now bulls will have to enter with a bit wider stop. The breakout from triangle will be today or tomorrow; I expect some really big moves soon.

Remember it doesn't matter whether you are right or wrong about the market as long as you make money (*trade hedged*). Hedges for last two sessions were colgate and sobha.
I'm guessing any exporter will be a good hedge for next 2 sessions.

Sensex touching 20k

Look for hedges/exits sensex 20k and nifty 6k
these are two very very big levels.

I like to hedge by selling calls if long and selling puts if short. Not a big fan of giving someone else premium/time value.
I am not a huge fan of hedging via options because I haven't backtested that idea.
I have however mathematically verified the utility of shorting weak stocks even as the market rallies.
So sectors which I think are shortable? anything that hasn't made a new high. IT? if you get a short setup, fmcg maybe some autos (but watchout for diwali sales)
To test my theory i'm shorting colgate. Its low beta, low risk, low reward.

nifty 5200 is the support 6000 is the res.

Finally got pib working

Had to fix the mtu setting in my router default ethernet = 1500
optimal for net = 1488 or 1492 somewhere in there.

Now just need to update all my data before I can resume trading.

Back!!

Finally finished shifting to delhi.
Now need to do some unpacking.
Computer+broadband seem to be mostly working.

Market has overshot the minimum 4900 diwali target by a bit.
levels beyond 4900 (based on memory) are 5200/6000.
Since we didn't get much res near 4900-4950 expect support on a drop to that region.
More obvious/stronger support level will be 4600 breakout.
Fresh ground floor for the bull market is now 4000-4100 region.

Psychological level 20k sensex seems to be giving us the res.
20k is also a very old target.
A bit of consolidation up here.
Old tops = fresh bottoms in the strong stocks
Next target 25k then we go for 50k.
Weak sectors are the ones that didn't make new highs (IT/auto/fmcg i think)
look to short those perhaps.

Will update the site with levels once i finish downloading stock data.

Favorite sector for next decade? Telecom
Telecom will do for investors over the next 10 years what IT has been doing so far.

Nifty levels unchanged till diwali.

4100-4400-4600-4900 were the levels
looking for healthy support near 4400
I stand by 4900 simply because i have seen resistance near 4600 in my dream many months ago but I have also seen 4900.
4640-4900 = flying to the moon. The whole space ship doesn't make it into space and a very tiny portion makes it to the moon.
My old mantra used to be buy at support , sell at res.
My new mantra is it doesn't matter if you're right or wrong as long as you make money. (try to trade hedged)
Dont have time to post much more.
Happy Trading.

Edited 8/3/2007:
"Cryptic clues
You can fly to the moon if you can swim with the sharks.
Clues for decphiering: Read Elder on risk management and also study Gann regarding types/sizes of corrections"

Solution to clue: 4622*0.94=4344
6% dip. why 6%? Read elder/gann? :)

EOD Trading systems

The previous system with detailed stats is intraday and holds for 2-3 days with maybe 1-2 trades per day.
If anyone is interested in EOD versions then contact me : niftytradersinc@yahoo.com
Will discuss in more detail when I am in India.
The eod version will be around Rs 25,000 with code
Rs 12,500 without code
Annual returns: 100-200% (cut in half etc 50-100% humanly achievable in a good market)
Drawdowns: 15-20% (double 30-40% to account for human error or an adverse market)

Just keep in mind eod entry/exit is better only for those who cannot watch the markets all the time.

Also keep in mind it is a good idea to diversify across trading systems for technicians. Just as fundamental investors will diversify across sectors/value/growth etc.

Quotes

http://members.aon.at/tips/citation.html

Random Quotes

Skiing consists of wearing $3,000 worth of clothes and equipment and driving 200 miles in the snow in order to stand around at a bar and drink.

Skiing... trading..... :-?

P.S : In case anyone hasn't noticed. I'm taking it easy.
Will get back into action only closer to end of August/September when I arrive in Delhi.

Quotes for adx users

"In fact as soon as I see a system developer speaking at a seminar about filtering with the ADX indicator, I start to wonder if this guy really knows what he is doing"
This is from "Trading Systems that work" , Thomas Stridsman.

1) "When comparing Figures 2.12 and 2.13, it is interesting to note that inclusion
of ADX resulted in inferior system performance. Although it is impossible
to draw conclusions from a single example, I offer it to readers
here as a caution flag. Just because data vendors or indicator developers
link two studies together does not necessarily mean their combination will
increase profitability."
Richard Weissaman: Mechanical Trading systems.

"Bollinger Bands with ADX Filter
Although I am certain that there are instances in which ADX improves the
performance of trend-following systems, in general I have found greater
success with this indicator as a filter for mean reversion systems. Here we
take the mean reversion Bollinger band system previously used and replace
the 200-day moving average filter with ADX. This removes the directional or
trend-following bias and replaces it with a filter that is intended to ensure a
nontrending market condition."
Richward weissman Mechanical trading systems

Note: Test your systems before u use them :)

Donchian 20 day breakout Trading system with code

//License agreement for the code:
//You may freely redistribute this code in unmodified form.
//If you do make a profit using this code then you promise to donate the first
//500 rs to a charity for children.
//If you choose to redistribute a modified version of the code code
//then you must remove the license agreement from
//the code.
//The ideas here are not unique, they are simply a merger of Donchian breakouts with
//gann position sizing.
//gann says do NOT risk > 10% on a single position.
//donchian=20Day channel defines the trend.
//Important point: if you bet all your capital on individual breakouts you will go
//broke. Remember : diversification/risk management is important in the markets
//Copyright: Niftytraders
//Email: niftytradersinc@yahoo.com

Buy=C>Ref(HHV(H,20),-1);
Sell=Crisk=C/LLV(L,20);
SetPositionSize(risk/10*100,spsPercentOfEquity);

Here are the returns for a donchian 20 day breakout system with 10% risk per trade.. tested from 1994 to current.
Statistics
All trades Long trades Short trades
Initial capital 100000.00 100000.00 100000.00
Ending capital 2315906.21 2315906.21 100000.00
Net Profit 2215906.21 2215906.21 0.00
Net Profit % 2215.91 % 2215.91 % 0.00 %
Exposure % 85.30 % 85.30 % 0.00 %
Net Risk Adjusted Return % 2597.82 % 2597.82 % N/A
Annual Return % 28.22 % 28.22 % 0.00 %
Risk Adjusted Return % 33.08 % 33.08 % N/A

This is with brokerage of 0.2% per leg.
You can test with any setting you like up till 0.8% per leg
annual returns should remain > 20%
The testing was done on stocks from the futures segment from 1994-current
(reason for limited testing is that not all my spot data is split adjusted/bonus adjusted but my fno data is clean)

The big issue with donchian breakouts is that drawdowns are huge...
The max drawdown for this system is as high as 50%.
Hence trade at your own risk.

2:30 factor

Atleast 5 different people have approached me to test out a 2:30 system
(Buy strongest stock at 2:30 use small stops, cover at close)

Refer to old post:
http://fnocharts.blogspot.com/2007/05/ideas-from-wd-gann.html


This system has been working in the past 200 days or so
Historically speaking this technique has not worked.
But lately its been working like magic, Reason??
We are in w5s on some degrees so we are overbought.
Bulls are piling up on anything that breaks out!! There is not much that is breaking out! Too much money chasing too few stocks.
Refer to old post (clash of the titans)
http://fnocharts.blogspot.com/2007/04/clash-of-titans.html


This buy anything that flies mentality is recent. People are ignoring diversification/fundamentals/A group/nifty because there are huge components of Nifty that are underperforming (auto/IT)
If i test the 2:30 system over last 200 days the results are almost as good as some of my other systems.
IF tested over last 2 years the 2:30 system fails, it doesn't even deliver returns matching buy+hold nifty. Use at your own risk :) (minor caveat the 2 year db is someone elses database: possible quality issues/ however keep in mind my emt systems (trend/countertrend) work on both sets of data equally well)

CNBC commentary

Raja: I want to meet all the cnbc commentators in one room.
Shake their hands one by one
and everytime I meet someone...
I want to repeat the phrase "You seem to have done well for yourself"

I wonder what the look on their faces would be like.

Only those who have cnbc turned on will get this joke.


Raja: why does cnbc use the phrase "has done well for itself"
maybe they don't want to say. Our 'operators' have raised the price to make the stock look attactive, please come and buy it now

P.S : Raja's sense of humour is inversely proportional to time spent trading.

Trend followers

I will not be active for next few months.
Few parting comments:
Trend followers might want to read
http://fnocharts.blogspot.com/2007/04/exactly-how-efficient-are-markets.html
A trend is created when there is a big supply/demand imbalance.
Usually helps if market is 'undervalued' or 'overvalued' to create a trend.
In the past few months market has been relatively flat.
We are perfectly balanced in funda terms p.e.g. of 1...
20% growth 20 p.e
Thats just my mathematics. Other more sophisticated funda investors might see things differently.
W5 insanity should take us to p.e.g of 1.3-1.6 p.e of 30-50 etc etc before I will even dare call the end of the bull market.
The trend will resume eventually. Keep in mind it is not uncommon for trend following systems to go flat for 2-5 months and give virtually no rewards to traders. This is the reason why I suggested spicing up one's trading with stuff like wolfe waves
Just be careful with wolfe waves.. A wolfe wave can often show up in places where an inv hns is also showing up and that makes me worry. Only one of the two patterns will succeed :).

Past 50 days : brute force trend following methods like 13 ema or 7/105 etc would be flat or making losses.
Traders will need more sophistication than a simple brute force approach of trend following in a lazy market to make money.
My optimized systems based on realtively efficient markets are actually performing just fine, up 10-15% even with market flat over past 50 days (system drawdown 2-5% intraday drawdown 3-5%). So My 'optimized' systems are still operating well within their expected parameter range.

Note: I always use returns without leverage.

Ex. recent buy call on litl even with market down?? Did not hit sl on closing basis
even srf is struggling but holding levels.
Both calls were sent on yahoo.
Will try to take a position in srf soon..
Still looking for 200-220 in srf from 150-155
Already booked once near 176 earlier.

No major updates for next 3 months

Have to pack up stuff in germany etc.
Will be busy, so no regular updates. Just erratic posts if/when I get time.


Nifty 4100 support 4200-4240 res
can touch 4400-4600-4900 if tech rallies.

otherwise trouble
downside??
4040? 3990/3960/3900.... 3556? i don't know
haven't seen any major downside below 4100 yet.

Go back to old post on risk/reward @ 4100 etc.
elwave might be signalling buy setups now

I don't really care what nifty does, i am investing in my midcaps
Will short fno every day if anything looks weak
but I will keep accumulating in delivery.
prithvi 265.. p.e < 6
same with aftek
thats all i can see right now :).
When I see low p.e with high growth I usually think 100% in 1-2 years.

Maybe I should wait for results to buy more.. perhaps some bad news cooking hence the insane weakness.
Either that or market is just being stupid as usual.

Favorite TF

Raja: dhiraj sood: sir not clear which time frame u feel easy for day trading
dhiraj sood: 10.20 .30 hourly
Raja:
dhiraj sood: ji
Raja: start with weekly divide by 5 into infinity
i get this question a lot....
this is basic elder/fractal market theory
Raja: once again, favorite tf?
start with weekly, divide by 5 into infinity
got it??
Raja: 1 week, 1/5 week=1 day , 1/5th day=65-70 mins, 1/25th day..............13-15 mins....
and u can go as low as u want as long as you RESPECT the higher tf trend
because the higher tf is the 'baap/father/parent' of the smaller tf.
it owns the smaller tf

The child can try to rebel but usually gets disciplined at certain areas :)
Read Alexander Elder...

Totally random blurb :)

When you use ewt too much
you start seeing 5-7-9 everywhere
:)
The ability of an ewt expert drops significantly when he/she is not able to see the simpler 5-7-9/3 structures
so I suggest studying elder for ema following
and neely for a more elaborate list of structures/rules .


http://scientificamerican.com/print_version.cfm?articleID=00010347-101C-14C1-8F9E83414B7F4945

Chunking Theory
In the 1960s Herbert A. Simon and William Chase, both at Carnegie Mellon University, tried to get a better understand-ing of expert memory by studying its limitations. Picking up where de Groot left off, they asked players of various strengths to reconstruct chess positions that had been artificially devised--that is, with the pieces placed randomly on the board--rather than reached as the result of master play. The correlation between game-playing strength and the accuracy of the players' recall was much weak-er with the random positions than with the authentic ones.

Chess memory was thus shown to be even more specific than it had seemed, being tuned not merely to the game itself but to typical chess positions. These experiments corroborated earlier studies that had demonstrated convincingly that ability in one area tends not to transfer to another. American psychologist Edward Thorndike first noted this lack of transference over a century ago, when he showed that the study of Latin, for instance, did not improve command of English and that geometric proofs do not teach the use of logic in daily life.

Simon explained the masters' relative weakness in reconstructing artificial chess positions with a model based on meaningful patterns called chunks. He invoked the concept to explain how chess masters can manipulate vast amounts of stored information, a task that would seem to strain the working memory. Psychologist George Miller of Princeton University famously estimated the limits of working memory--the scratch pad of the mind--in a 1956 paper entitled "The Magical Number Seven, Plus or Minus Two." Miller showed that people can contemplate only five to nine items at a time. By packing hierarchies of information into chunks, Simon argued, chess masters could get around this limitation, because by using this method, they could access five to nine chunks rather than the same number of smaller details.

Tisco wolfe wave

Another wise quote which i like by balaji.
The trend is your friend until it 'bends'
The wolfe wave is a flexible pattern that can be used in both trend continuation/reversal scenarios (wolfe just reverses the ultra short term trend could either be with or against various trends of various degrees in various timeframes :)).

Go talk to a good trader.
First and foremost a good trader is an independent thinker.
A trader should be able to act in uncertain times. 50:50 or even worse.. hence a trader focuses on techniques like reward/risk to enhance returns.

Today's wolfe wave trade given short under 608 futures sl 614
target 596/590
subsequently targets were readjusted to account for risk management rules
1x risk at 602 cover half 2x risk at 596 cover full.


Raja: market is expected to stay range bound for god knows how long
i suggest everyone study some counter trend systems/patterns
http://www.traderji.com/technical-analysis/13372-wolfe-wave-rajas-knowledgebase.html

sent early morning
Raja: tisco sort of wolfe wave
3 day high 614.7 sl in futures res 608 target 600-595 area. lets see

Raja: gaya tisco
shorted on way up

Raja: now cover on way down 600-595 zone

Informed investing

everyone on yahoo at some point of time
will give wisecracks like
intelligent investing
pitfalls of emotional investing
someone will go quote buffet or soros or seykota and what not.
i have a query:
how many people have invested anything in this current decline?
even as nifty is declining , surely the fundamental value of a stock doesn't change?
its easy to talk big
tough to act when the market is getting trashed daily :)
90% of people on yahoo? trend followers/crowd following members of the herd.
I've been buying tcs, aftek, prithvi, gokex, litl.
Planning to buy srf soon, maybe jstainless.

and shorting in fno
suzie yesterday
tisco today
Won't short nifty because i don't like the idea of shorting a discount.

I have a whole list of funda stocks that needs to be sorted thru.....
GVK Power Infra
United phosphorous
WWil
GDL
Amtek India
Opto circuits
Jaiprakash associates
Mindtree
Nagarjuna Construction
Kalptaru power transmission
Elecon engineering
Moser Baer
Birla Corp
Kesoram industries
Prithvi information solution-----5.61
Gujrat Apollo industries- 8.82
Esab India –13.93
Subex azure
Hotel leela venture
Cesc
Marico
Jain irrigation
Jindal saw
Hikal –17.26
Electrosteel casting
Great offshore
Sintex India

Strong stocks

Aban today up 2.7%
srf and litl holding 166-168 so far

srf/litl/aban/hindlever
beauty of buying @ support
support becomes res
u get break even exits..

reason is most declines in a bull market are of corrective nature and have significant overlap

Nifty : can't think of any gr8 reasons to be long unless
I was a bottom fisher buying the discount.

IT is also gaining in strength
Satyam/infy strongest

bank/autos still quite weak.
maybe lower inflation can help.

Here is the bigger problem with nifty.
Broken trendline
Broken swing low
Can take a while before the uptrend returns.

Questions with regard to brokerage

Question:
Why is the brokerage higher for delivery than for fno??
Are the costs of moving stocks in delivery around higher than for moving the futures around??
What is the cost to brokers/nse/sebi??
How much does an institution pay to nse/sebi for fno/spot?
What is the actual base rate??

Leave a comment if you have an answer.
I'm gonna go spam on traderji etc as well :)

Brokerage rates

i am going to write a small paper on the benefits of lower brokerage for both traders and brokers
its basically about symbiosis.
instead of leeching and sucking a trader dry if a broker gives very very low rates and a trader has a system that can compound money. The brokerage will grow at an insane pace along with account equity
I sent the following msg to my rm who is working with indiabulls

I am going to work the example with rm/indiabulls structures
Raja: if i start with
0.5% delivery brokerage
my account equity = 10 lakhs
becomes 40 lakhs over say x years
net brokerage u get
based on average equity during those x years
15 lakhs * 1000 trades * 0.5%* 2 = 150 lakhs

if you charge me 0.1%
my account equity goes from 10 lakhs
to 12164 lakhs
your net brokerage
600 lakhs * 1000 trades * 0.1% * 2 = 1200 lakhs

the equation becomes twisted if there is a bare min that indiabulls will keep
and then it will share the remainder between rm and the
lets say the bare min that indiabulls wants is 0.1% delivery in that case
the rm will only earn in the first scenario , in the second scenario the rm is not making money

if indiabulls keeps lets say 0.05%
and the remaining brokerage it gives 1/10th to the rm as incentive
then in the first case
the rm gets 10% of 90% of 150 lakhs =13.5 lakhs
in the second case the rm gets 10% of 50% of 1200 lakhs = 60 lakhs..

Anyway i don't have exact ratios cutoffs incentives etc
but i am sure the numbers can be crunched to find exactly how much everyone will make.

I will post a detailed backtest report with diff brokerage rates on 2 systems
and illustrate net brokerage earned etc. later

Worst picks in my investing career

Tvs motor 100 exit 90 odd

Dr.red
650/700/750
Cmp 650

Arvind 120(140 exit)/120 100 exit/70 (55 loss)/43(48 exit, 2x quantity) cmp 44 odd
book value 60-70 maybe?
If arvind splits into retail/textiles will result in value unlocking 70-100 rs per share
holding still. waiting for 70-80-100 in 1-2 years.


Up next?
Prithvi?
330/300/277/280/290 , still holding
cmp 280

aftek info 56/66/72 , still holding
cmp 71

gardensilk many years ago (this was not funda i made the mistake of following icicidirect call on this one without proper planning)
reco price 80, cmp 56 (2 years!!! thats massive underperformance and i am still holding book value is 88 i will only exit At or above book value)

If i am missing any of my other horrible trading or investment calls do leave a message.
We learn 10% from our successses and 90% from our failiures.
Making a mistake is what prevents us from making the same mistake again.
The mistake leaves you with a solid memory usually one involving pain and when confronted with a similar scenario your mind will make you imagine that pain before u even act to make that same mistake.

If you keep reducing your mistakes you will ultimately get better.
Just a matter of sticking with the game long enough.

While I seem like an impatient guy when I talk.
When I make up my mind I can have near infinite patience....

I have lots of other investing picks where I have suffered massive drawdowns
But I held on because the fundamentals were intact.

So prithvi/gokex/aftekinfo/litl planning to hold for one year unless fundas turn sour
Lets see where the market takes them.

Technical analaysis

"Aquarius
January 20 - February 17
Surprising new developments in close friendships or love relationships could come your way today, dear Aquarius. Someone might move away, or perhaps move closer to you. This could prove to be a little unsettling at first, but once you get used to the idea you'll be happy. Social events and group activities could also bring unexpected events your way. Be prepared for some bombshells! On the downside: Expect some trouble with machines! "
Lets see. relationships: yes on a borderline relationship which needs to be cemented or broken in the next few days. (1 pt)
Social events hmm nothing there. (0 so far but the day is not over yet)
Be prepared for bombshells , thats easy in the stock market u always have bombshells... (1+ pt but cheesy comment easy to prove right )
Trouble with machines ?? Nope no trouble so far all systems working beautifully *touchwood* (nothing here, well my system hdd has been overactive past few days still haven't figured out which application is causing it.. yahoo 8 always crashes but thats a yahoo 8 specific issue which has plagued my system for months now: 7.5 was just fine.)
So score??
2 out of 4
50:50
Even with all this double talk accuracy only 50%
Also if you take the skeptic view then you would see that this general description could fit a lot of people..


Notice anything similar to the way technical analysts talk????
You say both up and down.
Here is my view about technicals. The money comes from the fundamental filter, its actually the fundamental part of technicals that makes money. The ones who don't see this are the ones constantly trying to turn gold into lead and lead into gold.
Nissan copper was probably a technical buy on listing... just kept breaking up
But people who chase lead and take it above and beyond the value of gold pay a price.. nissan copper listing day 40-120 then back to offer price 33 then lower 25!!!
Target is 50-80 in 2-3 years. (ipo will be used to fund capacity expansions, as and when capacity comes online it would be relfected in earnings and stock price. meaning we would hope that this reflection would be complete by the time the earnings are there even though it could very well happen much sooner or it could even take longer???? is it possible that the stock price might NEVER REFLECT THE ACTUAL VALUE OF THE STOCK?? DOES ANY TECHNICAL MASTER KNOW WHY FUNDAS WORK?? IF THE STOCK PRICE DOES NOT REFLECT THE IDEAL VALUE OF THE STOCK then IT IS A PRIME TAKEOVER CANDIDATE FROM OTHER COMPANIES IN THE SAME SECTOR!! or its a candidate for hedgefunds who can come in rip it to shreds and extract book value.)


Today's commentary:
Market opened gap down mind you I am roughly 3.5 hours behind Indian time.
Raja (6/7/2007 6:49:23 AM): index is maintaining 4170 area in spot until that is intact there is hope 4180 is the rising channel 10 pts width allowed. for stoplosses


Raja (6/7/2007 7:29:21 AM): 4240 sl for bears 4170 sl for bulls
Raja (6/7/2007 7:30:40 AM): 4220 profit booking for bulls if u went aggro long and 4180 profit booking for shorts market needs to prove strength by going above 4240 before the positional players will come back u have too many brokern trendlines right now i suspect shorts building 4213-4222 sl 4245
Raja (6/7/2007 7:38:16 AM): my suggestion is short now : 4210-4220 sl 4240 target 4180-4100 but i am not good at shorting nifty so make sure to get a second opinion
Nifty future = 4210 at this time.... (nifty future formed double top and started heading lower...


Raja (6/7/2007 8:05:40 AM): aban strength in a weak market can touch 2850-3000-3100 and what not, targets sent yesterday
Note:(aban was a bullish pick of yesterday @ 2750 , entry basis = 2700+ target 2850-3000-3100, today closed @ 2844 in futures even with a weak market)

Raja (6/7/2007 8:06:52 AM): a lone bull stock like aban is like a lighthouse in the storm lost bulls are attracted towards it every bull wants aban. since bulls are only good at buying a die hard bull will just not short he'll look harder for that bullish opportunity and if u look hard enough there is always a bear with a loss in a bull market even if nifty is down
Raja (6/7/2007 8:11:26 AM): satyam mentioned on blog @ support 464 now 475 syndi @ support 77/76/75 stil holding dunno what hll is doing support @ 192
Note:(aban was suggested as a buy 2700++ (also suggested as a buy 2300 area in a pullback or something)


Raja (6/7/2007 8:11:26 AM): satyam mentioned on blog @ support 464 now 475 syndi @ support 76/75 stil holding dunno what hll is doing

Raja (6/7/2007 8:24:54 AM): nifty sl @ 4213 nf break even for bears u don't want to lose extra pts in any discount reducing short covering rallies
Raja (6/7/2007 8:25:12 AM): litl will touch 167 leave limit order to reenter long in delivery
Note:At this time litl was at 174..
Raja (6/7/2007 8:25:43 AM): also 165 srf = reentry

Raja (6/7/2007 8:28:00 AM): Retracements :154.55-185.7 0.236:178.349 0.382:173.801 0.5 :170.125 0.618:166.449 0.764:161.901 i have my limit order 167 but no guarantees maybe 170 can hold?? dunno


Raja (6/7/2007 8:36:22 AM): trailing stop 4205 for bears. don't give away money to this market if we go up discount reduction will kill u if we go down your targets are 4180-4140-4100
Raja (6/7/2007 8:41:00 AM): litl few days ago good news top u want to see how selling good news works?? watch suzlon next 3 days sometimes good news tops can take 1-2 days for distribution depending on how big the news is and how crazy the public is 9:1 the news is already discounted and in the price and any excess rallies are speculative
Raja (6/7/2007 8:43:58 AM): lichsgfin another strong stock in a weak market these should be your picks for next nifty leg up they will fly up the most

Raja (6/7/2007 8:55:38 AM): nifty we will also buy but only after all weak hands are out weak hands have sl 4180/4140 nifty which is the obvious level. i want to buy 4100 sl 4090
Raja (6/7/2007 8:56:58 AM): 167 litl milega??
Raja (6/7/2007 9:00:54 AM): System: Trend follower Stock Name: LITL-I BuyStrategy: Buy between s1-s2 S1:167.10 S2:169.00 R1:179.44 R2:187.05 Target1:172.327 Target2:176.135 Target3:180.705 SL1:165.473 SL2:160.903


Raja (6/7/2007 9:27:35 AM): litl surgical strike 167-169 buy zone day low 168 area now 173



LITL dropped to support zone 167-169 in futures. and gave T1 as an intraday scalp trade. maybe in 2-3 days it will give 176+


Raja (6/7/2007 9:41:47 AM): 4180 target reached cover half??? rest 4140-4110?? or be greedy?

Nifty closed @ 4179.5
THAT MY DEAR FRIENDS IS THE ONLY REALITY (addressed to mr. sarvesh :))
THE LTP
THE CLOSE
LIVE WITH IT

Below 4170 4140/4100/4054 etc allowed.
but even in this weak market I can find bullish picks that will make money to the upside
technicals are an illusion; the driving force is fundamental in nature.
technicals only tell you what is happening.
fundamentals tell you why it is happening and how long it can continue.
litl 2010-2011; Will be worth 300-600 rs.
Write it down and remember me then..
Prithvi short term weakness?? It will be at 400-500 next year unless some fundamental disasters happen :)
Prithvi Heading to eod trendline, spotted by dhiraj , he finally gave me a picture that fits his name , the patient support is 275 , i'll buy 100 more there to complete my 1000.

(again notice the if/then else, the stock market is about probabilities and risk management)
Drawdowns are part of the game of investing
No risk, no reward.
That is the other reality of the markets.
People who are afraid to risk only talk talk talk.
They don't trade.

I bought prithvi
bought gokex
without any regard for index technicals.
prithvi is pure p.e/p.e.g pick
gokex is also p.e/p.e.g/leading exporter of garments

I can't always be right prithvi is one of those stocks
that just keeeeeps oooonnn stagnating.
you want a stoploss for investments??? stoploss 200 rs :)
if you bought at 300
target 400/500 in one year, sl 200
risk is 100 rs reward is 100/200 rs..
from a technical perspective i can justify just about any trade!!

In fact if i remember correctly even last time i reccomended prithvi @ 330+
IT has severely underperformed the markets. It only hit 410-420 area and not 448 as I had targetted.
Every stock has cycles of short/medium/long term under performance and out performance.
Contrary to popular belief stock prices do not go to + infinity and -infinity
Which is what the basic theory of trend following suggests..

Warren buffet, peter lynch, soros
Some of the biggest names in investing are all fundamental analysts+contrarians.
If you know what a stock is worth you can buy on the way down with a lot more confidence and still sleep easily
Star another good news short 2 days ago trashed today by 5%
after 5-10 hours of distribution.
Keep an eye on suzlon will also face profit booking within 5 hours (5 trading hours)

Litl faced profit booking @ 186... few days ago after good news and retested the support level I had given on the way up itself: 167

Gokex analysis

As I was saying earlier i believe, this market can offer value if one looks around hard enough.
So Lets start with gokex: a stock pick with p.e.g of <1
( it seems common theme in my picks lately is $ worries, exporters)

How i analyze stocks...
If you can think in this fashion.
Then drop me a line. We can split up work and find good picks both on technicals and fundamentals.

News: Fy07 results are out
Valuations:
fy07 actual 20 rs
cmp = roughly 10x trailing
fy08e 9.4 x earnings
book value of stock fy06 was 200



growth rate 15% annual
last 2-3 years
sustainable trend
capacity expansions comissioned

india's largest garment exporter

valuations compelling
growth momentum intact

fy08e = 24.99
fy09e = 31.46
by icicidirect
tad high estimates

worst case looking at 15% returns in one year
fair value suggests a target p.e of 15, 15*20 fair value target of 300??
Icicidirect suggests 320 p.e/peer valuations
best case looking for 20-40%
if stock moves up to 10-15x 25 next year
in line with peers like bombay fashion and keval kiran

debt/equity is very very low
0.22
hence the higher p.e multiple vs other textile midcaps like vtl and alok
this company is mostly debt free
looks like a bargain to me considering its leadership position
margins are a bit on lower side only 7-10%

ronw is 20%
acceptable.

Technicals
has broken a downtrendline
is forming a pole and flag
GOKEX, Analysis Date:5/31/2007
Close/cmp:217.05
Swing : Up=Buy ( 3.900% sensitivity)
T1:238.962 T2:255.12
T3:281.482 1xR:255.4
ImpulseTargetZone:297.64-324.002
SwingHigh:234.0 CMP:217.1
SwingLow:195.0 SLPivot:212.6
2xAtr14Stop:20.9104
Narrowsl:212.60
WideSl:199.33
TrailingSL:213.40
Lower Chan:218.813 Upper Chan:248.371
ResLine:240.206

Look to buy around 212 possible flat correction lows
with sl 195 and target 238/255/281 if you are a technician
If you are an investor then just buy and play for the upper targets 255-281-300

all levels on weekly closing basis


Note icicidirect 1 year target is 312
my technical target zone coincides with the funda
target proposed by icicidirect
297-324 if we get a full 5 wave rally
w3/wc which is minimum anticipation after a sharp pole/flag
target is 255
within 2 months.

commit 5% of equity
risk involved is
17 pts, round up to complete 10% 20 pt risk
reward is
26/43 pts

Trading rules
buy @ 212
use 2x atr chandelier stop.

Wolfe wave

Friend wanted example
So i give u 2 examples in one picture
Google for details.
Currently wolfe wave target is 4100 or so
I have never tested wolfe wave in isolation, no idea how accurate or useful it is.
i usually use wolfe wave whipsaw along with an elliot wave count.
For every one wolfe wave that works i am sure i can find 2-3 that don't
The key is that the risk is insanely tiny .
its usually <=1x atr
target is usually 2-4x atr
You could also try filtering by reward/risk to decide which ones to take

I'm going to do a very thorough test of all wave patterns on all timeframes
once i arrive in delhi.
Goal is to run something that can scan entire nse for any pattern on any timeframe of any size in real time and provide a reward/risk/probability estimate..
If there is any such thing as a useful pattern in the stock market for trading.
I'll find it :) within seconds of the pattern forming.

imagine entering every 1-2-3-4-5/a/b/c (zigzag/flat with reward=10 times risk :)
even with 20% accuracy thats a money making system

For now i continue to filter my technical patterns with an underlying fundamental view.

Vision: nifty 4600 before end of year. sl for view. 3556

"problem with nifty is
i know the following levels will be touched
4100-4400-4600-4900
this year
I just don't know in which order :))"

One possible order that makes a bit of sense given recent weakness.
4100-4400-4640-4400-4900

S&P CNX Nifty, Analysis Date:6/5/2007
Close/cmp:4284.65
Swing : Up=Buy ( 4.100% sensitivity)
T1:4391.22 T2:4642.55
T3:5052.61 1xR:4454.65
ImpulseTargetZone:5303.94-5714.01
SwingHigh:4,217.9 CMP:4,284.6
SwingLow:3,617.0 SLPivot:3,981.1
Narrowsl:3,981.15
WideSl:3,834.36

The power of dreams...
Lets work backwards
3556 is the ultimate swing low for nifty's current move.
At what price point does it make sense to even try buying nifty if we have a longer term horizon?
(considering odds 50:50 we want reward=risk)
Lets look at my first target which is logical above 3556 (not just me, elwave agrees!!)

x-3556 = 4640-x
2x=4640+3556
x=4098
the second target should be a 2x risk target
2*(x-3556)=5052-x
3x=12164
x=4054


Hence my level 4100 is derived, using the massively power processing power of the right brain while i slept.
Without actually working forward through the steps. But this is the way i usually work my reward/risk when I am awake.
Thats called intuition.
I just did the same thing while i slept a few weeks ago.
The steps have to be verified after the answer has already been computed.

Of course acting on hope is the easiest way to get butchered in the market :)
So either use options with a view to hold till expiry with predetermined risk or follow a trading system.
max risk on option trades is 2/6/10% of equity, and since entire option amount bought is usually at risk if you follow my levels , work out the risk before you start dreaming about the rewards.

I checked elwave, It has the same view
Check out the screenshot.
Currently the reward/risk is not favorable for buying at all on nifty.
The elwave analysis will become favorable once we get a bit more of a dip.

So final analysis
for investors
buy 4098-4054
sl 3950 (exit below 3950, reenter above or use options) narrow
wide sl for delivery investors? 3556
target 4600-4900. (4640-5052)
Done.
Levels will not change for next 3 months
Regardless of what market does

Another area which allow entry based on pure reward/risk
2x=4400+3556
x=3978
Just in case you are a mega bear.

Nifty 4240-4180-4140-4100, hll hedge for bears.

Negative beta, safe bet in a weak market
close to support
consider 192 critical.
sl 190 should suffice.
Levels given in an old post.
Strength is above 198-199-200 etc.
should touch 210-220
if 192 continues to hold.

As for nifty the angle of attack on the lower channel is damn sharp
if t2 4180 breaks
t3 4094 opens with interference from 4140 old low.
Go short on something that is doomed and hedge with hll long.
Should be a profitable strategy in theory in a down market.

Its starting to look like 4100 will be visited before 4400-4600-4900
So it might be prudent to lay off the nifty buying for a while.
If you are already long? as i know some people are near 4180. Cut and run below 4170 spot

Nifty Diagnosis

4180 rising channel
4140 old low
check picture for details
If you are short these are your targets
4240 is the stoploss.

If you are a bull you might look to buy near supports
but sl has to be under 4140 old low
If you are a mega bear then you are probably already dreaming 3990 and 3750 and 3650 and 3556 :)
right?
So levels won't matter there.
Just keep in mind above 4240 nifty we are in breakout mode on the monthly charts.

Gann/Swing Trading setups

Already gave details earlier but its easier to understand pictures
a) trendline break/channel break/1x swing break
b) pullback/retest
c) short new lows with a lower high
need a broken rising channel/trendline break to initiate the setup
I prefer a broken channel

So this setup was initiated on hourly below 428x with the hns

on eod it will be initiated on first eod rally after 418x/4140 is broken

Check out the example pictures

Nifty 50, 50:50

Few problems with rising trend
trendline broken 3600-3990
Rising channel intact 4180
swing trend/sl intact 4140

strong stocks which i want to be long on
aban,mcdowell,patni,relcap,srf
litl in a bit more of a decline closer to 166-170
sl remains 160


problem with nifty is
i know the following levels will be touched
4100-4400-4600-4900
this year
I just don't know in which order :))
p.s emotional people use the word i feel.
intuitive people tend to use the phrase i know but its all connected.
Intuition comes from experience. experience is sorted in the mind through both emotions/logic.

pt remains
I don't know what comes next in nifty. so i will not trade it.
srf i just had a dream 220. Of course i am not entirely crazy :). I booked some at 174 today. just in case srf stays rangebound.
will look to buy aban/relcap/mcdowell in declines as well because they look very strong.

I think the action is going to remain stock sepcific mostly in midcaps
Nifty is fairly valued.
p.e.g of 1

a sustained move below 4240 opens 4180-4140-4030-3990-3965 etc
sustaining above 4240 reopens 4350-4400-4672-4900
expect choppy action in nifty over next few days.

Keep an eye on LT 2071 for clues

Lt t1 2071
probably one of the best bets in infra sector.
Edelweiss target was 14% above 1945 on good results.

How crazy is this market??
2476-2497-3194?
:)
Stocks like lt will help to decide if nifty can also do
4400-4600-4900

Reason to worry below 4240

Sort of a big hns pattern neckline 4240
4330 top area
90 pts target = ?
hmm
4150?
Right near support zone 4140.
Wonder if we'll break down and test support.
If we do, its just a gr8 buying opportunity. bulls are not gonna give up so soon as they.
Be lightweight. keep an eye on both sides of the market.
Switch to a counter trend system for a few weeks. might make more than the trend followers.

If you are a bear, market actually looks shortable for 4140 sl 4310
weakness will persist below 4285-4296

If a hns were to work perfectly every time
Then chartists would be the richest people on earth.
Long above 4240, short below
90 pt move on either side possible

I still believe we will touch 4900 by diwaili this year.
Just need to hold 3980 for that view.

Nifty

i have a bunch of nifty levels 4100/4400/4600/4900 u know why i like these levels?
What? You don't know ? Then you don't me well enough and you don't deserve to know!!
:)
the order of the levels
is the problem.


As for technical supports 4180/4140 4030/3980 4240-4295 also important.
juggle them till u can find a solution.
u have to find the path of least resistance from present price to 4900
which structures can get us to 4900??
4400 -4100 4600-4900?
4600-4100-4900?
4100-4400-4100-4600-4400-4900???

I don't know.
will post a trade set up on nifty if i see one.

Stock specific
value = p.e.g<1
Look around i am sure u can find some value hidden somewhere

considering nifty is now entering p.e.g>1. Its in speculative phase/w5

I have still not found one person.
Who will volunteer a good midcap pick to me AND give the proper funda details.
Punters love to give picks but they don't back them up with fundas
and i don't buy stocks in delivery without knowing the fundas.
Just goes to show the horrible company I keep.
Need to work on that.

Dr. uday's favorite picks.
Nagarfert/ttml/rnrl
Only issue is while my dear friend has gr8 picks because he manages to find news which is not discounted by the market time and again, he doesn't seem to speak my language of numbers.
I want simple stuff
cagr
p.e
p.e.g
fy08e
fy09e
bv
Need long term stories.
Next sector I am eyeing is clinical trials in India
stuff like jubilant/vimta labs. Still expensive on the valuations side p.e of near 20++ ?? But on p.e.g vimta is approaching value zone? approaching sub 1x p.e.g levels so there is definitely some buying to be done in this segment.
cagr atleast 30% over next decade as this segment picks up.

Prithvi

Snippets from research reports/ mails in Bharat's gr8 group
Err.
google for it.
Select group. high quality reports.

# Prithvi Information Solutions (Prithvi) posted results considerably above expectations on the revenue growth front (26% qoq), but was slightly below expectation on PAT at 11% qoq. The profitability was impacted due to salary increases to its onsite staff in this quarter and a higher than expected forex impact on account of translation losses.
# For FY07 the company’s performance was a strong growth of 68% in revenues, 100% growth in EBITDA and inspite of the forex hit in this year, the company posted profitability growth inline with revenues at 69% yoy.
# We expect the company to post organic revenue CAGR of 25.7% over FY08-FY09E and a PAT CAGR of 26.6% over the same period. We reiterate our Buy recommendation with a revised 12-month target price of Rs.445, at an P/E of 8x FY08E fully diluted earnings, considering FCCB dilution). We believe the stock is the cheapest available IT stock and has considerable scope for a PE re-ating, as the company continues to perform.

PBL
"
Result Snapshot
Prithvi Information’s Q4 revenue, at Rs 2,592m, rose 30% qoq and beat our
estimates. However, at the EBITDA and PAT level, the company has once
again disappointed the street, as its margins slipped 130bp and 170bp
respectively.
The EBITDA margin declined due to the hike in salaries whereas the lower
PAT margins stemmed from the increase in loss on account of rupee
appreciation.
Maintain a long-term BUY, with a price target of Rs 514 (6x FY08E earnings)."

AngelBroking
"Outlook and Valuations
Prithvi has out-performed our FY2007 topline estimates by a decent 6.3%, while on the
bottomline front, the out-performance has been to the tune of 2.4%. On the EBITDA
margins front, the performance has been spot-on, with eventual margins just 2bps lower
than our estimates.
The management has declared an interim dividend of 20% (Rs 2 per share), giving a
dividend yield of 0.7%. Going forward, we expect Prithvi to record a CAGR of 27.5% in
topline between FY2007 and FY2009, while the CAGR in bottomline is expected to come in
at 30.8%, mainly on account of margin expansion of around 50bps each year during this
period.
At the CMP, the stock trades at a P/E of 4.3x FY2009E fully diluted EPS, making it one of
the cheapest stocks in the entire IT sector. We maintain a BUY on the stock, with a 12-
month target price of Rs 485."



I bought hexaware like crazy in fy05 when I started investing
I had something like 1000 shares of hexaware near 450 :), sold near 600 got out wayyyy too early (thats like 120 current prices)

Now I have almost 1000 of prithvi.
I love this counter.
Of course rupee appreciation risks ladeda
rupee could go to 36.
the profits of the company would also drop by 20% or so.
Even then lets say instead of next year eps of 55 we get only eps of 40 (30% below estimates)
still 1 year target of 400 at 10x earnings considering u have to pay 15x fy08 for other midcap IT RIGHT NOW...
OTHER MIDCAP IT ARE SITTING AT TARGET PRICES
U know why?? whatever is in fashion, whatever has already been discovered is usually fairly priced or over priced.
You need to find the next big story if you want to make mega bucks in investing.
Bought more ON DIP to 290 which is my value zone based on 50% retracement of last swing.
NOT ON BREAKOUT @ 304+ or 320 (thats where i booked partial intraday profits last time)
Prithvi has exposure to the U.S. any significant slow down could impact the stock adversely. Future plans include inorganic growth+increasing offshoring+europe etc.
Sounds good to me.

For those who don't understand why prithvi is available at such cheap rates??
repeat after me
market is crazy
market is crazy
market is crazy
market is crazy
(other possibility is market is actually smart??? fccb, massive equity dilution and what not.. but then all these research reports are crazy.. take your pick)
"angel broking:Prithvi made an issue of zero coupon foreign currency convertible bonds (FCCBs) of US$
50mn to Lehman Brothers Europe, London at a conversion price of Rs 469.13 per share
(conversion rate of Rs 44.09 per US$ taken). The bonds are due for redemption in 2012
and will be listed on the Singapore Stock Exchange. The proceeds of the FCCB will mainly
be utilized for the purpose of acquisitions. It should be noted that Prithvi has already
identified companies for acquisition and it is in the final few stages of closure. The
management expects to make an announcement on this during the current quarter. The
equity dilution on account of the FCCB conversion will be to the tune of around 26%."


ambit capital
"Attractive valuations
Valuations at P/E of 5.4x FY07E and 5.3x FY08E earnings are at a discount of
nearly 55% to mid cap sector average multiples on FY08E basis. On other
parameters too at EV/Sales of 0.7x and P/BV of 1.3x FY07E earnings the stock
is relatively undervalued. We see significant room for a re-rating on this count
as the company continues to perform.
The company’s raising a $50mn FCCB convertible at Rs.469, a premium of
greater than 40% on the date of issue, lends further confidence to our
discounted valuation argument.
High cash per share of Rs.123 on fully diluted equity considering FCCB dilution
further provides cushion to our valuation.
We initiate coverage on the stock with a BUY with a 12-month target price of
Rs.426 at a P/E of 8x FY08E earnings. We see possible upsides to our target
price on account of inorganic growth triggers or higher than anticipated revenue
growth."





the average person has an IQ of 100
the average IQ of a crowd is 50.....
A mob is dumber than its individual components.
Much dumber.
Reminds me of a game kids used to play in middle school in Delhi.
WWF Royal rumble. Kids in our class would just beat someone up for no good reason. Nothing serious just mild punching/kicking.

The only way to save yourself?? Point the crowd to someone else. If the crowd finds someone else to beat up before you start getting bashed you are safe.

Prithvi check shareholding pattern.
The fii/mf holding is still damn low.
aftekinfosys was the same way near 56... Then it hit 84-90 on one fine day in 2006 and morgan stanely was buying at 80.
This was well after the buy call was given. Not even my call exactly, it was a valuenotes call. I just forwarded technical levels.

Is morgan stanley stupid?? Nope they are also investing for the future they will get 160 if they hold for 2-3 years , especially if 20-30% cagr continues.

So buyyyyyy
prithvi/aftek, prithvi/aftek
Don't go buying 3iinfo for p.e of 27x fy08 and 20xfy09
WHY DO YOU WANT TO PAY 15-20x FY09??
P.S 3iinfo was a crash buy call near 210 target 320.

ALREADY DONE a 1 year target in few months.. geez. crazy markets. why?? because stock has a bigger fan following. thats all.
Some people actually think they are smart if they pay higher p.e
The pretend they are buying growth (which they are 3iinfo growth rate expected is almost 40% cagr for 2 years)
But seriously, same returns are also available at much lower p.e. in aftek/prithvi.

p.e.g is what counts.

Why buy 3iinfo @10x fy09? When you can get prithvi for 4x fy09??

U know why i stick with market is crazy theory???
Rolta was selling at 80-100 in 2005..
p.e of only 5-8x :)
and p.e.g of 0.25

Look AT IT NOW....

Famous bubbles

Read for examples of bubbles/manias
http://www.theequitydesk.com/manias.asp

Another form of bubble which I see daily around me is forward earnings multiples.
People sometimes start talking forward earnings/valuations as if they are guaranteed.
You have to price in risk of forward earnings not being hit???
What about that?
No risk?
Riskless investments?
Very rare.
fmcg/pharma are generally considered the low risk sectors and look at the crashes in reddy/cipla lately.
Hll was a gr8 investment at 250, then 230, then 200 now 190 p.e of 25 ish and no one talks about investing in hll on yahoo any longer.
This is where long term bottoms are formed.
Hll is now near lower end of historic p.e band even as its earnings are starting to get back on track.
dabur is trading at 30x earnings....... when dabur entered futures it traded at barely 10-12 x earnings. the futures were discounted by 2-3 rs for no good reason etc. That is called insanity.
Right now people will tell you dabur buy @ 30x forward earnings. Thats rubbish. if cagr is 30% buy at 30x trailing. next year's target is 30x next year's earnings. end of story. IF anyone can prove otherwise i am all ears.

litl
fy09e = 21..
fy10e=3x..
fy11e=5x..
target 210 in 2 years...
issue price 200-240, listing 280. If it was worth 280 @ listing why is it not worth that much now?? Has the growth potential of the power/infra sector gone down??

breakout level 175-176
u do the math.
risk? 144 old low?
trailing eps 12-13?
rock bottom 120-130 in a recovery after a market crash? (note in an actual crash u could go to 80-90 who knows?
"The only truth of the markets: no risk, no reward."
can i copyright this phrase? :)

hoec rumours of some bid going on for hoec

System: Trend follower
Stock Name: HINDOILEXP
BuyStrategy: Buy between s1-s2
S1:108.88 S2:106.50
R1:154.34 R2:182.40
Target1:123.358 Target2:137.387
Target3:154.223
SL1:98.1039 SL2:81.2681
Please check fundas for yourself before buying in delivery.

Stocks to buy in any big dips

LT, relcap, mcdowell, patni, ndtv
Stocks which are already at supports satyam/hll/indianb/syndi/albk

Nifty any dip to 4200-4180 is a clear cut eod chart buy sl below 4140/4110 previous low.
Worst case scenario you do 50% retrace of first drop wave b pullback and then head lower for wave c

buy hll

System: Trend follower
Stock Name: HINDLEVER
BuyStrategy: Buy between s1-s2
S1:198.86 S2:199.10
R1:208.99 R2:215.24
Target1:202.804 Target2:205.93
Target3:209.68
SL1:197.179 SL2:193.429
Sl to be employed on closing basis

Low beta stock
low risk, low reward.
can trade slightly bigger quantity than other stocks to compensate for this

Nifty consolidation

Nifty 4240 support from breakout
if broken??
then 4200(round figure) 4180-4140 etc etc
uptrend dies only below 4140/3980 levels.
bull market ends only below 200 sma.
Simple rules.
If you do short a bull market keep 2-3 day/2-3 week rule in mind.
Most corrections are over by the time u notice they have started.
For those who are seeing 'downtrend' and weakness
I suggest looking at the bigger picture.
Open a weekly or monthly chart of nifty and tell me how weak/strong we are.
Did u know I bought today? I gave buy calls and i bought, did u know fiis also bought???
Trade with fiis, trade against retail/punters
retail/punters create the daily chart moves/noise, fii trends create the weekly /monthly chart trends.
I am still bullish on syndibank near 20 day lows.
hll above 192
pateleng near 400
and nifty above 4240 (sl 4240) or near 4180(sl 4140/4110)

Look at dow.. opens gap down/weak
due to global cues
But bucks the trend closes strong.
So again tomorrow.. china might be down. But atleast cues from u.s will be neutral/up.
China is going to retrace 50% OF ENTIRE MOVE FROM LOW TO HIGH
I wish i could buy a put on the chinese index. I'd buy a put on any/every rally
and buy a call on nifty in every decline.


Want to learn the optimal point for shorting????

"Buy/Sell the first correction after a big rally/decline"
W.D.Gann...
Don't understand???
Buzz me i'll give u a document.

Zen update

Go back to my old zen post
"To be happy act like you are already happy."
How do you identify a person who is happy?? Facial expression, laughter, joy usually.
what came first? the smile? the laugh? or happiness?
if you can find something to smile about every day you will be happy

The modern economic machine

In the old days if you taught someone, they would owe you.
Have you heard of eklayva?
These days people will learn from you and forget you.
We live in a world where children kick their parents out of their homes and students mock their teachers.

Funny how the world changes.
Thats why in the modern age we have something called money. Its an easy way to track favours.
In the old days when people lived in villages and everyone knew everyone it was a different story. You could easily track favors, you had barter, you had a social heirarchy of respect.
These days we have money.
However since most people are not comfortable paying atleast try not to waste too much of my time either?
If I am a TA and you are a TA we don't have much to offer each other, we can waste time arguing about levels we will get no where.
If you are a technical analyst the first thing u need to do to get on my good books is to offer me knowledge/information. Failiure to give something before u ask for something just puts you on the wrong side of my lists.
I have already programmed stuff that does in 1 minute same amount of work which a technical analyst will do in 1 hour.
Are you a good programmer? Then you can automate the process...
Who would like to give me code that rips fundamental data+news from asiancerc/idbi/icicidirect/kotak/indiabulls etc any one of those sites?
Anyone? for free?? :)
I'll trade an automated fundamental ripper with full source for a copy of elder's tripple screen with full source!! I have no issues with barter. I just expect my work to be treated with the same respect as yours. Of course if you are not working hard.... then the problem lies with you, not with me or my attitudes.

If I am a technical analyst and you are a fundamental analyst then we can collaborate.
If you are a budding technical/fundamental analyst and you don't know how to program either but you still wish to learn I have lots of chores you can do.
Want one?? go to icicidirect convert all multex estimates/brokerage ratings fy08/fy09 for fno stocks into a spreadsheet. This info is already available out there in clean formats with some people and yet I have not been offered this info by anyone.
I am just about the only idiot on this planet who gives information/knowledge to people for free. Not even info i am giving away knowledge. 10x more powerful than pure info.

Ever heard of apprenticeships? That is how the arts are learned, and TA is much more an Art than an exact science.
Seriously if I were to ask people to do this 1 simple task for me. No one would do it. Exactly why should I be helping people with levels or TA ????
I don't feel like refusing people when they ask me to allow them to add then I don't feel like refusing when they ask for levels.

Next person who comes and asks me for a favour is going to get bashed up. Before you ask me for something , you need to know what you can offer.

a) if you want trading levels give me a funda report (i want an executive summary fy08eps/fy09/p.e/p.e.g/any fundamental stories, capacity expansions)/earth shattering news (M&A/takeover/buyback all qualify)
MAIL ME THE INFO FIRST , then ask for the levels
b) If you want a book or information, suggest one book or idea to me that I don't already know and I will offer you 2 books/ideas.
c) Do not bother me during market hours or you get deleted from my list.
Bug me after market or before market not during market.
d) If my levels and systems work, why on gods green earth would i give u any useful info? Simple a) out of the goodness of my heart b) fuel my ego/self confidence c) to build a reputation d) you are the guinea pig :) e) to get something in return, a/b/c/d/e? all of the above..
If you wish to learn from me then you need to come up with a good gameplan.
I have found that 80% of people will stop asking for free help if I ask them to do even a small chore :). The remaining 20% are the ones who will make it because they have the right attitude.
"You only get what you give"
"You only reap what you sow"


Fair??
Good.
Now i need to keep a link to this post in my standard cut and paste responses.

Site counter races ahead of nifty spot!!!

Spotted by my good friend rajnish.

Rational markets??

China is crashing
we are stable?
Is that a sign of maturity??
Or did we take our cue from the u.s which gapped down but closed higher??
I am sure the technicians took their cue from the u.s

If china is a p.e of 50 and its a sell for 50% correction of full swing from bull market lows.
Does that make us a sell?
Shouldn't we wait for p.e of 25-30 before we top out??

If bharti is a sell at a p.e of 50-60 does that also make rcom a sell at a p.e of 30-40????
Are the markets rational?
:)
Questions to which i don't have the answer.
But i do know this
He who can keep himself rational during an irrational market
Stands to make the most.
Litl bought 155 50% retracement
1-2-3-4-5 abc
contrarian pattern
AT SUPPORt
NO CONFIRMATION
its up to 170 now..
Here is the beauty of studying exotic market theories.
You will realize that with certain patterns the sl will not change regardless of whether u get confirmation or not and the confirmation signal might not significantly improve odds of immediate success in all cases ..
The ultimate confirmation is fundamentals. Buy in delivery only if you are convinced of fundas
litl will now up 190-200-240 above 176.

In the may panic of 2006 rel crashed to book value 3xx rs per share...
Those who kept their cool got in right at the bottom just by placing a bid at the book value.. such a simple technique for buying a large cap :)

Learning from a guru

everyone has a guru.
Some people follow cnbc
Some people follow others on yahoo.
pick your gurus carefully
i follow elder/gann/larry williams/bill williams/linda raschke/neely/elliot
I have studied the works of all these people in detail.
Even after all this study: The ultimate guru is the market.
People often make the mistake of using trading techniques/systems without testing them thoroughly.
Avoid that mistake,
Test your idea on actual market data before you actually jump into trade it.
Gann suggests that every technique should be tested and made one's own before using it.


People will say stuff like buy low sell high???
But not many people know how to quantify their setups
rsi<30 is low?
rsi>70 is higher??

a couple of examples:
13/21 ema is low
13/21 ema + 2x atr is high.
(provided trend of 2 out of 3 tfs is up)


1-2-3-4-5 is high
1-2-3-4-5 + abc is low...
there
are
lots
and
lots
of setups
the more exotic ones like pattern based setups are difficult to test


p.s 1-2-3-4-5 + a-b-c results in w3/wc /inv hns.


Will post pictures later if I get time

Going to be busy this week
need to buy a new pc.
quad core 6600 with water cooling
+ 4gb ram
+ 4 tb space raid 0+1
+ some good sound card for ddl/dts

maybe a mediocre gfx solution otherwise I will end up playing too many games on it :)).

Market Egos

The market is full off egos
Every time Someone tells you I told u so , against the trend..
Then look to go with the trend.
Bears get proven wrong more often than right in a bull market.

Bull market corrections come in various sizes.
Read gann for details
my short version is
2-3 days
2-3 weeks
2-3 months
this is a bull market on steroids
Gann also allows for much bigger pullbacks but our markets haven't really given the opportunity to study those.... So I don't have much experience with other cycles.

This is also the premise of the tripple screen trading system
You trade with the direction of the higher timeframe trend
on a medium timeframe pullback
with a shortest timeframe breakout
Basically you get the most excited when
in a bull market
Bears come and tell you "I told you so"
(bears making money for 1-2 days = force index dip)
Then when the bears get proven wrong on the shortest timeframe
You have a situation where
its 2 vs 1

long tf+shortest up with mid tf in pullback but not down.

If you want to learn how to trade the tripple screen
a) read alexander elder (www.4shared.com or your local bookstore)
or
b) buy a trading system from me and i'll give u a tutorial with it.

Nifty thoughts

Raja: nifty is doing massive 1-2, 1-2, 1-2 post the action near 3990. (meaning 1-2's within a local 5th)

a 5th wave extension in nifty's move could take us to not just 4400 but much higher
4672-4900 is valid.
Downside is what? 4140/3990?
Nifty usually spends 2-3 months correcting every year and 8-9 months rallying
So right now max downside is?? 3990 ?

those who are praying for a correction need to study the charts
please tell me what was 4240-3600?
what was 4215-3990?
we have spent adequate time correcting!!!!!!
It is time to MOVE
if we don't move now then bulls will all go to sleep
check out syndi/albk/pateleng for abc/flat corrective setups if u would rather buy low/sell high rather than chase nifty's move

Nifty 50: 50:50

All 50:50 no trade setups nothing.
w5= pure speculation meaning we are going beyond fair value of p.e.g = 1 on nifty now.
This is not a place to buy nifty on fundamental grounds for 1-2 years.
As for indiv stocks there is value to be found if one looks around.

No more calls on nifty because there is no gr8 trade setup.
Keep an eye on hll/pateleng
hll bouncing from support maybe a flat correction support 198-200 sl 192
patel eng also has good support near 400-396, sl 384
syndibank near 77-76-74, sl 72
might get 10-20% in june

multiple support levels don't know which one exactly will hold.
can use close above previous day's high to trigger long

Trading systems.

A couple of people who had already bought my system got annoyed.
Get back to me i will give you the patched afl.

It seems that i have already written a more generic version of kamal's code.
http://fnocharts.blogspot.com/2007/05/new-system-is-born.html
this is the old system.. only two letters need to be modified in the old afl that I have given out to get nearly identical performance.
As gann would say there is nothing new under the sun.
Even the old system i had was using a filter for short side trades.

Anyway kamal will be handling the training part from now on for the double screen.

A new system is born

My star protege, Kamal Mahal; has come up with a minor twist in a system that now beats both 7/105 and tripple screen.
The twist is simple
Be quick to turn bullish and slow to turn bearish. This twist has been talked about by gann and the other masters and yet somehow a lot of systems are built as if the market is symmetrical on the upside/downside.

Kamal actually started with a unique way of measuring accumulation/distribution. Somehow he ended up building what I can best define as a double screen system.
Its effectively a subset of elder's tripple screen system with the extra twist of being quick to turn bullish. (that bias probably works well on nifty right now because nifty is in a sustained fundamental+technical uptrend)
I had been reluctant to market my tripple screen initially because its just a lot of work. The tripple screen leaves a lot to the user's discretion like the final entry trigger. This new system which we're calling a double screen system is almost as good, purely mechanical and easy to use.

So we'll have it ready within a few days.

This is probably one of the top systems for trading nifty that is out there and it will be available for sale:
5000 rs per copy. That will include a mini tutorial on how to set it up/trade so that beginners are not lost.

I'll post a link to Kamal's website as soon as he sends me the link

Lots and lots and lots of people bearish

Just about everyone i know except me. is mega bearish
Of course my justification for bullishness is
a) dream
b) fibonacci
on fundas we are 'fairly valued'
means up 10% is just as likely as down 10%
up 4200+420 or 4200-420

But here is the thing
w3 is built on fundas!!
W5s are not about fundas
they are about speculation!!!!!

w5 is about p.e.g of 1.6 :)
lets say nifty p.e target of 26-32 if we really want to set ourselves up for a crash.
After that you can crash , 50% retracement OF FULL MOVE FROM LOW TO HIGH
Target p.e of 15-16 once again

IS nifty Topped??? Or is the 5th extending???

just hold 4140, the old low and also the trendline (check carefully in attatched picture)

and I can see the possibility of a 5th wave extension
We need rupee strength and tech strength to get us there.
Tcs has to make a move for 1380-1440 by the end of this month, the triangle needs resolution
on the downside max damage is 1050 and i would not become a seller in tcs even if it crashes....
buy and hold.........
10 years
tcs
Various growth rate projections
all of which i find reasonable....
average case lets say 20% cagr for 10 years...
With some years where u get 30% and some where u get as low as 5-10%
1.15^10= 4.04 =>
1.2^10 = 7.43 =>
1.25^10= 9.31 =>
1.30^10= 13.78 =>
The stock could be up anywhere from 300% to 1300% in 10 years :)
I am thinking maybe 10 times...
Exactly how much will it grow?? Go talk to tcs management!!


one year tentative target is 1550-1600 for tcs based on a 30% growth in earnings.

Nifty's extension could be similar to the way divis moved
When nifty starts moving it will get wild.
The big big breakout is above 4240.. that is the old monthly top.
I posted the targets for that breakout a long long time ago
Will post them again tomorrow.


S&P CNX NIFTY, Analysis Date:5/31/2007
Close/cmp:4294.05
Swing : Up=Buy ( 5.000% sensitivity)
T1:4399.92 T2:4649.84
T3:5057.61 1xR:4437.35
ImpulseTargetZone:5307.53-5715.3
SwingHigh:4,214.8 CMP:4,294.0
SwingLow:3,618.6 SLPivot:3,992.1
2xAtr14Stop:128.801
Narrowsl:3,992.15
WideSl:3,854.14
TrailingSL:4,130.02
Lower Chan:4209.02 Upper Chan:4604.87
ResLine:4569.23

Old dream: hero honda

Hero hits 720
AFter staying in a triangle for an extended duration...
On the dot
720
spot
Floor pivots for session after5/16/2007
Pivot:683.617
Lo: 670.0 Hi: 703
S1: 664.2 R1: 697.233
S2: 650.6 R2: 716.617
Projected Hi:706.05 Projected Low:656.9
System: Trend follower
Stock Name: HEROHONDA
BuyStrategy: Buy between s1-s2
S1:683.30 S2:687.77
R1:723.42 R2:748.18
Target1:695.685 Target2:708.067
Target3:722.925
SL1:673.397 SL2:658.539

Hero did not give a single close under the sl.....

Another call hits T3

Keep in mind sl is closing basis !!
"Also intraday today i gave a buy call @ 4265 with some reservation due to expiry volatility
System: Trend follower
Stock Name: S&P CNX NIFTY
BuyStrategy: Buy between s1-s2
S1:4,264.92 S2:4,270.82
R1:4,300.09 R2:4,321.80
Target1:4275.77 Target2:4286.63
Target3:4299.65
SL1:4256.23 SL2:4243.2
Now you will say why on earth am i posting a call which is just about to get stopped out and has very little chance of success?"

Looks like my system is smarter than me :-?
SL2 was not hit on closing basis on even the hourly charts!!
Remember the stoplosses are all closing basis in this trend following system...
sl1 is a narrow st

My wide sl was given as 4240
reason? 4250 or so was narrow sl old low. My override was based on a flat correction knocking out lows temporarily.
In spot 4240 was never taken by bears!!!

So we just hit another t3
Amusing isn't it? :)
Shorts ka baj gaya band yet again!!!
U know why??
Because as i said last time 7/105 is not a profitable system on short side on 10 minute while 7/105 on hourly is.
The profitable trading systems (on the short side) just never turned short!



Here is a fresh call that was given in conf yesterday during panic selloff
System: Trend follower
Stock Name: HINDLEVER
BuyStrategy: Buy between s1-s2
S1:198.45 S2:198.60
R1:207.87 R2:213.68
Target1:201.359 Target2:204.264
Target3:207.749
SL1:196.13 SL2:192.644
Remember all call levels will stay valid for 2-3 days atleast.

Mechanical sl levels for eod uptrend

Gann swing support= 4140 area recent low
Target below 4240 seems to be 4200-4180 region

7/105 on 10 minute turned short a while ago (As i already explained this is a very very short term trading system which needs manual intervention to be profitable if traded on the short side of nifty futures. If traded on spot then this system is one of the most profitable systems i have except for my tripple screen setup.)


7/105 on hourly will turn short under 4180 area.
If both systems go short then it will definitely be time to look at the short side of the market
right now i would suggest shorts look to cover near 4180 and try long again with sl 4150/4140/4111

So basic point is: don't panic right now.
Delivery of good stocks should be held for nifty 4672-4900 levels.
Speculative junk can be unloaded if its beyond p.e.g of 1.6

If this is a flat correction in progress then 4240 could hold. That would give max power to the followup move.
Otherwise a deeper corrective that holds 4140 is also allowed without damaging the trend.
Keep shopping.
When there is a sale at a shopping store. Do you run around in panic and say omg
the value of all the products i already bought went down?
OR do you buy more and try to sell later when the prices get marked up again??

Short term selling pressure

Nifty looking weak overdue for another dip
below 4240 4200 in a near straight line.
4240-4180-4140-4110-4040-3980
take your pick :)
I am not so good at calling tops and bottoms.

Looking to buy some stocks in delivery in any panics
dabur near 84 ideally, 90 max
aftekinfo near 66-72 max
prithvi near 288-300 max
litl near 153-144 , 157 max
infy near 1750
tcs near 1200-1150-1100-1050
rel 500-480
agrodutch 26
krbl 112


If you have any good funda picks then do post them here in comments section
criteria
p.e.g < 1
growth rate > 30-50% cagr next 3-5 years
debt/equity <1.5



Short term 2 reasons for fiis to pull out money
a) chinese confusion? play on sentiment
b) strong rupee they get 9% yoy forex gains+ capital gains

Few days ago i mentioned this chinese issue p.e of 50+ and what not
dunno whats the current state
let me give u a concrete example
Longer term fundas >> technicals
but short term sentiment can always weak havoc
if china is gonna do a 10-16% drop we can do 6-10% easy

for instance rpl ipo listed at a bad time (market top) and stagnated
same with pfc
idea ipo listed during a market bottom!!
:)

idea as per my view was a tad overbought on fundas on listing as well yet it has outperformed...
pfc had an eps of 14-16 or something but no one cared and it didn't touch 140-160 after listing.
It did that now...
And now that everyone wants it, its probably gonna be topping out short term near 166-176.

dlf ipo if u list at a market peak. lots of room for downsides.
Watch to short this one if it lists at a mega premium.
in line with recent mega prem listings
sobha
parsvnath
etc

A rising tide lifts all ships...
Remember that
So if you want to invest during high tide.
Try to invest only on good funda stocks
I can show u overbought and value in this market right now

p.e.g <1 midcap tech like aftekinfo/prithvi
p.e.g >1 in some midcap tech like 3iinfo
or in something like praj which is approaching p.e.g of 2 now
and yet the technicians keep giving buy calls!!!!
They were screaming buy at 512 +++ as well.
then again i have been thinking sell since 440 :))
and divis since something like 3000-3800-4200
the results of divis were blockbuster 17x rs....
so maybe even praj can delivery blockbuster results next year?? I don't know.
Its all a game of probabilities.
Find your stoploss find your target, figure out your odds and take the trade.

Nifty futures, arbitrage from point of view of investors.

Nifty June futures discounted by almost 0.5%
This is how rolling over is done :)
People talk about positive cost of carry and premium and what not. thats not how the professionals roll over. They will bash up nifty slightly so they can conduct their rollover at discounts.

Imagine u have 1 crore rs to invest into a group because u believe in the india story and want to invest for 2 years
u can buy 1 crore of A group shares in nifty weights (very tough to manage)
you will get 1.8% dividend per year
And you will get capital gains
Lets imagine that at the end of 2 years the index is up 20% (conservative case, ideal case would be up 40%)
since you own nifty shares in the right ratio u made 20%+dividend yield 1.8%- the cost of transactions = 21.8% - 2% = 19.8%

Now imagine that you decided to think for yourself.
Lets also imagine that you decided to study what a futures contract is and what cost of carry is.

You would soon realize the following
cost of carry is the premium the futures buyer pays to the cash holder for the privelige of paying low margin
effectively the person buying futures is paying 10-20% margin on one contract.
(varies by contract/sebi mood etc). So effectively the person who is long futures is borrowing money from the market @ coc and the person short futures is lending money @ coc

Lets assume for now
we have 1 crore
we put 80 lakhs in the bank , fixed deposit and earn 9% interest per year
remaining 20 lakhs we keep to buy 1 crore worth of nifty.

We use the clever strategy of rolling over our positions only when cost of carry is negative.
so At end of the one year
we have paid either 0 charges for rolling over
or maybe even made 3-4% per year during rollover process
for instance right now if i am long nifty may @ 4238 i can buy nifty june for 4228
which means cost of carry, annualized is negative (0.25% ^ 12) = negative 3%
meaning market is paying me 3% per year to take the risk of holding nifty futures rather than holding nifty spot.

the transaction cost for nifty, lets say we do 4 rollovers
i.e we use far month series for rolling over instead of trying to hold near series
Every time we rollover the cost is negative around lets say 10 pts
those 10 pts can be used to pay off the comissions

So in 2 years
I have held nifty long thru futures. 1crore worth
imagine nifty is up 20% after 2 years
Nifty futures are trading @ par on a certain day or @ premium on a day that a new 52 week high is made
I cover the rolled over nifty futures
my net gain??

i made 18.81% on the 80 lakhs fixed deposit = 15 lakhs
Also on the 1 crore worth of nifty i made 20% = 20 lakhs
Total gain on one crore = 35 lakhs or 35 % in 2 years
Vs the average joe who used an index fund or invested in a group shares and made 19.2%

Now i know this is the perfect scenario.
You might have to break the fixed deposit if nifty crashes by > 10% since u would be recieving a margin call.
so this strategy is best initiated near 200 sma of nifty from where the drawdown is usually not greater than 5-10%
Or initiate the strategy after atleast a 5-10% correction in nifty spot...
(so far in this cycle degree max dip has been roughly 30% and 200 sma has been the mother of all supports)
If you initiate the strategy at 52 week high odds are u will have to break that fixed deposit and pay up more margin as nifty corrects.

Now imagine a person who knows all this and yet doesn't execute this strategy :)
Thats me.
Knowledge = power but only for those who wield it with confidence.

Nifty 4180-4140 area eod supports can get tested if 4250-4240 intraday supports are broken

Nifty has support near 4250, that level everyone sees.
However since everyone sees the level my sl level is 4240
if 4240 fails then trend is still intact, wider sl level 4140.
You would look for reentry lower only near 4180 or so..

Previous 10-12 calls in trend follower series have hit t3 before they hit sl2.
(trading strategy is buy at s2 , target t2/t3, sl2)
(or buy above s1, t2/t3, sl1)
Rcom most recent buy setup @ 480, sl 470 target 520 just did target
u can now move all levels up by 10 pts for rcom for next buy setup

This is the next call in the eod trend follower series
System: Trend follower
Stock Name: S&P CNX NIFTY
BuyStrategy: Buy between s1-s2
S1:4,177.17 S2:4,212.66
R1:4,283.23 R2:4,348.71
Target1:4209.9 Target2:4242.64
Target3:4281.92
SL1:4150.98 SL2:4111.69

Also intraday today i gave a buy call @ 4265 with some reservation due to expiry volatility
System: Trend follower
Stock Name: S&P CNX NIFTY
BuyStrategy: Buy between s1-s2
S1:4,264.92 S2:4,270.82
R1:4,300.09 R2:4,321.80
Target1:4275.77 Target2:4286.63
Target3:4299.65
SL1:4256.23 SL2:4243.2
Now you will say why on earth am i posting a call which is just about to get stopped out and has very little chance of success?

This is just to show, not all calls work out.
Odds over the longer term are only 50:50 or 60:40 at best.
The key to making money is the profitability of the call and not the accuracy in isolation
profit expectancy is roughly = (%profit * probability of profit - % loss * probability of loss.) ^ number_of_trials

Blah blah

Raja: 2 calls given both on way down in recent history
http://fnocharts.blogspot.com

Nifty old call hits T3: followup
Stock Name: S&P CNX NIFTY
Buyarea=4179.67
S1:4,179.25 S2:4,200.28
R1:4,286.10 R2:4,352.06
Target1:4212.65 Target2:4245.63
Target3:4285.2
SL1:4153.29 SL2:4113.71


Fresh support from gap up created 4250 area
System: Trend follower
Stock Name: S&P CNX NIFTY
Buyarea=4246.78
S1:4,245.08 S2:4,250.53
R1:4,281.88 R2:4,304.59
Target1:4258.14 Target2:4269.49
Target3:4283.12
SL1:4237.69 SL2:4224.07

Look to reenter if you booked at t3 i.e 4285.
Day high 4295 so far.

want to learn how to catch a falling knife???
'holy grail' by raschke/ 13/26 ema macd trading strategies by alexander elder

want the books? then go to http://www.4shared.com
and search for the authors

heartchakra1: you take classes
heartchakra1: books too tough
Raja: chakra you are the only one
Raja: who wants classes


Raja: i already told you
Raja: u get me 4 other people
Raja: 5 combined
Raja: i will give
heartchakra1: online ?
heartchakra1: on webcam ?
Raja: 5000 rs each , online classes
Raja: yes webcam only
Raja: webcam+whiteboard+conference
heartchakra1: most people are idiots
heartchakra1: they wont give 5 grand - kanjoos
heartchakra1:
Raja: well how about this
Raja: how about an afl file + mini tutorial
Raja: afl = amibroker scanner for the trading setup?
Raja: so u know which stocks are in powerful moves but are pulling back
Raja: thats the key to managing risk, buying the pullbacks
Raja: rather than breakaway moves

heartchakra1: yeah
heartchakra1: pullbacks
heartchakra1: not like i did in glenmak
heartchakra1: bought at breakout
heartchakra1: then had to wait
Raja: yes
Raja: your profit potential
Raja: becomes half
Raja: and risk is double

Giving calls/trading them

The more calls I give.. the easier it is to derive satisfaction from a 'successful call'.
That is in direct conflict with successful trading.
Reason is when giving calls people will judge you both on accuracy and returns.
In fact most people on yahoo etc will not even have a damn clue about the reward/risk/long term profitability of your calls.

You could keep giving calls that generate 0 % returns per year in all
and people might be impressed with your 'accuracy' (i.e you give 8 2% wins and 2 10% losses they might still think of your calls as good unless they happened to trade the two bad calls :))
You could give calls that generate 100% a year when traded perfectly and people might forget you :)

Hence if one is to become a truly good trader.
One must focus not on giving calls but on trading them.
I keep running in circles in this market.
I actually made a resolution to not give calls for a while in jan and made a lot of money. Then I made some big losses in feb/march thanks to breakout trading strategies that I was employing :).
Since then I have switched most systems to pullback mode/early entry.

Whenever I am testing/developing new systems I like to give a few more calls :)
Just a way of getting feedback.
So right now the feedback seems to be that the calls don't move quickly enough.
One person complained about losses, while 5 times as many have managed to make 10-20% gains on capital in the recent volatility.
The stops have been wide from 2-5% so it wasn't easy for most stops to get hit.
I'm going to be packing up here in Germany soon.
So I'll be on and off.
When I come to Delhi then I'll get into trading on a whole other level.
What i really want to do is either
a) start up a trading firm: hire people to trade a pooled account of money
or
b) find a way to trade signals automatically.

The gap up in nifty has almost been filled
friday's high 425x/closing 4248
now just try to trade long using narrow stops

Be careful with the doublish top pattern on nifty

Pattern: DoubleTopunc:1
Retracements :4146.75-4295
0.236:4260.01 0.382:4238.370.5 :4220.88 0.618:4203.38
0.764:4181.74
we really have no biz going under 4238/4220 if we are going to achieve the higher objectives for this fresh move.
if we start slipping could easily result in a retest of the old lows near 4160 etc
that would be a flat correction and then a fresh move up.
Anyway overall I remain bullish.
Just pick a stoploss and stick with it
Keep in mind the bullish structhre of the market is only negated below the most recent swing low of 4141 nifty.
if we close under that. then definite time to trade short.
Until then you can look to short for 3-10 hours on weaker stocks which are making new hourly lows but please avoid shorting nifty itself. As for bulls. Anything that makes a new 52 week high is always interesting when it pulls back.

Nifty is too strong and shouldn't be shorted because the discount/premium fluctuations usually kill the shorts.
Better is to short stocks where u short @ prem and cover at discount or par in a panic.