fnocharts: 06/05/2007

Thursday, May 10, 2007

4440 above 3900, think its impossible?? Read this conversation

Raja: Raja (5/9/2007 11:00:32 AM): http://fnocharts.blogspot.com nifty call pe dekho main bola buy 4000 call for 100-120 target 200-240 abhi sab bolenge call trigger nahin hua day low 121
Anurag Shukla (5/9/2007 11:12:01 AM):
Anurag Shukla (5/9/2007 11:12:18 AM): missed 1 rs.
Raja (5/9/2007 11:12:28 AM):
Raja (5/9/2007 11:12:32 AM): ultimate joke na
Raja (5/9/2007 11:12:37 AM): of course the irony would be
Raja (5/9/2007 11:12:39 AM): if it now does
Raja (5/9/2007 11:12:40 AM): 100
Raja (5/9/2007 11:12:40 AM):
Raja (5/9/2007 11:12:43 AM): 3980 one last dip
Raja (5/9/2007 11:12:46 AM): but so tough now
Raja (5/9/2007 11:12:48 AM): not looking possible
Anurag Shukla (5/9/2007 11:13:01 AM): yes you are right

Anurag Shukla (5/11/2007 7:38:24 AM): Raja Kumar: i dreamt 3975-3980 Raja Kumar: or something Raja Kumar: bears are calling for Raja Kumar: 3900
Anurag Shukla (5/11/2007 7:38:33 AM): what you think?
Raja (5/11/2007 7:38:42 AM): no idea bhai
Anurag Shukla (5/11/2007 7:38:42 AM): same?
Raja (5/11/2007 7:38:45 AM): see andhra bank chart
Raja (5/11/2007 7:38:47 AM): see how
Raja (5/11/2007 7:38:49 AM): there is one new low
Raja (5/11/2007 7:38:52 AM): then mega rally up
Raja (5/11/2007 7:38:56 AM): similar pattern could emerge

3975-3987-3915-3900 supports

Most punters seeing 3900 now.
4030-3% = 3910 area. If we gap down to the first target zone? what comes next??
:)
The real miracle would be if we hold 3975-3987
Not gonna count on it.
only trade bullish above 4030 with a stop under 4020 or trade bullish near 3915 with a stop below 3900.

Prediction is fine but try to follow a profitable system. Currently nifty is in sell mode as per automated system
http://niftytraders.blogspot.com
we're looking to buy if it gives us a buy setup within the rising eod channel.
Shorts are interested below 4030 but if we open gap down it would be a tough place to short nifty which will probably be at a discount, random counters might give short trades for intraday.

The previous buy setups posted allow for profitable long trades above 4030.
That is also a system which is backtested to be profitable as long as one books profits partial/full profit at t2/t3 and books partial/full losses at sl1/sl2.

If you wish to learn about trading systems or purchase one of my systems
contact me : niftytradersinc@yahoo.com

World markets in trouble

Watch the rising channel.
Earlier bulls were so insanely bullish they were refusing to hit 3987-3975
Now if you read over mushtaq khair's view he is allowing for as low as 3900
which is the rising channel of nifty.
http://www.shareanalyst.com/newsletter.htm

If u check the automated trading system
it triggered buy on gap up
Then triggered sell intraday
http://niftytraders.blogspot.com
markets are 50:50. very few people can call the market better than that over long durations and if they are calling it better than 50:50 their reward/risk is not as good and they are not generating money with their calls.
The automated trading system calls the market around 50:50 (40:60 if you take the small stoplosses) but has a high profitability ratio (returns>risk adjusted buy+hold nifty)
Also keep in mind intraday or ultra short term trading is best done in fno where comissions are low and liquidity is high.

see the reward/risk of calls given yesterday?? 4030 entry? 4020-3965 sl
narrow sl on nifty might get hit on gap down.
now we can go lower , longer term view intact 3900+ = 4440 possible

In order to truly manage risk one must have a trading account in world markets. Otherwise this gapup/down kills. I should get an account on nasdaq, would have been so bloody easy to hedge nifty longs with indian adrs short. Oh well, this goes on my todo list. The purpose of heding is not to make mega profits but to avoid mega losses. once boe raised, europed died, u.s could have died and did die and a global fund can easily hedge while us small traders get stuck with overnight longs.

This is the problem when all the bulls become bears overnight. Just because all world markets are down, everyone is going to take tension and want an exit tomorrow.
For those who took the 4000 call? if u took for 120. Hmm atleast your max risk is limited :)
As for me I will be a bear only below rising channel. The channel defines the trend, till the channel rises, trend is up. Tomorrow if we do gap down will be profitable to trade the short side of most stocks. may 11th anniversary, bears make a comeback :), w3/wc, w3,wc the debate rages on. One solution to w3/wc debates
is to be on the the right side of the breakout/support/res at all times. That creates lots of entries/exits, hence option setups.

Keep in mind I am a mega bull target new high possible: 4400 if 3900 sustains and we get a higher low on eod charts. That converts into an option trade of buy 4000 call for 100-120. Reasoning is simple even if we went long at 4000 we would need a 100 pt stoploss and at the target zone of 4200-4440 the call would double or quadruple.

Watch dow 13200 if that doesn't hold?? Then markets will be in a bad bad mood.
Those who took futures?? if dow closes 1-2% down we will open 2-3% down?
Anyway rising channel support remember 3965-3915
For longer term positions which are held on lower leverage can stay long.

Hindlever: Invest

At the current market price of Rs195, the stock is quoting at 22.8x its CY2007E earnings per share (EPS) of Rs8.5 and 20x its CY2008E EPS of Rs9.6. We maintain our Buy recommendation on the stock with a price target of Rs280.

Hll trade long if it closes above 193
or wait for new eod high
So far lower low/lower high continuing in what i believe is only a fake c wave to the downside.
Long term picture looks ok to me.

Intraday trade setups for tomorrow

Trade long only if market sustains 4030 tomorrow.
If we crash under 4030 it will be a bloody day. A lot like what followed after 3970 was broken last time can repeat this time. The market is not in a significantly better position on the fundamentals. Still a p.e of 20-21 like last time at this 4000 area.

Boe has raised rates , watch how world markets react.
The goal of this trading system is to take quick profits in volatility
Book half at t2, full exit at t3.
If you are mega bullish can keep a small qty for a potential w5 breakout which might or might not come.
If you are bearish you may even chose to be short under the support levels. But the targets would be unclear. Since right now the system doesn't allow shorting.

In any event if stock closes under support then exit.

Stock Name: TATAPOWER
Buyarea=571.912
Support1 :581.94 Support2 :571.34
Resistance1:600.61 Resistance2:618.68
Target1:580.945 Target2:589.979
Target3:600.819
SL1:568.298 SL2:553.845

System: Trend follower)
Stock Name: ABANLOYD
Buyarea=2371.36
Support1 :2,430.83 Support2 :2,368.99
Resistance1:2,518.19 Resistance2:2,610.29
Target1:2417.41 Target2:2463.46
Target3:2518.72
SL1:2352.94 SL2:2279.26

Stock Name: AMTEKAUTO
Buyarea=383.667
Support1 :383.28 Support2 :380.23
Resistance1:404.06 Resistance2:416.89
Target1:390.08 Target2:396.493
Target3:404.189
SL1:381.101 SL2:370.84

System: Trend follower)
Stock Name: REL
Buyarea=510.639
Support1 :512.95 Support2 :510.13
Resistance1:531.49 Resistance2:544.68
Target1:517.232 Target2:523.825
Target3:531.736
SL1:508.002 SL2:497.454
Sl to be employed on closing basis,

Still within a triangle

Triangle continues 4130-4140 res line held , now for 4030 support line.
Wb/w4 or terminal???
The same pattern is allowed to break up or down
No hard and fast rules.
Probability lets say 55:45 for triangles in direction of entry. Since entry into triangle was upward, favoring exit to upside.
If it breaks up looking for 4240-4400-4440-4692-4920 etc
If it breaks down looking for 3970-3915-3900-3850-...... . Lets not go there
I am still long :). Tech still weak so its mostly up to telecom/oil/banks/metals to drive this market higher. Pharma flattish, fmcg also flattish but could turn up.

Also keep in mind triangles often show up as the last leg in a local move. ('limiting triangles' setup for good shorts after the move ends, while the non limiting triangles could go anywhere. Read neely for details)

Wednesday, May 09, 2007

Random Stuff

IMPEX INVESTMENT: 31 New Contract will be available in Futures & option from 14th May 2007 http://www.nseindia.com/content/circulars/faop8889.htm

vishnu shanbhag (5/8/2007 2:24:52 PM): Imagination is more important than knowledge. knowledge is limited.Imagination encircles the world. Albert Einstein
There are two rules for success: 1) Never tell everything you know… Roger H. Lincoln

excelent sanjay (5/9/2007 2:14:48 PM): many friends not tell there T.A. study to other but u openly tell everybody
Raja (5/9/2007 2:15:00 PM): yes its a bad habit isn't it?
excelent sanjay (5/9/2007 2:15:16 PM): good habit
excelent sanjay (5/9/2007 2:15:20 PM):
excelent sanjay (5/9/2007 2:15:55 PM): good T.A. gyan spreading

Rish .: >FIIs turn net sellers in equities worth Rs 2,221 on 8th
http://aiiireports.blogspot.com/2007/05/fiis-turn-net-sellers-in-equities-worth.html

I wonder if they bought today , just remember daily move means nothing but if the selling is weekly basis then it can be a top.

Liquidate some stocks in delivery :)
because if we do sub 3900 u won't get a chance to book anything
Until 3900 holds trade for 4400-4440
Refer to old post for levels/pictures and stuff
Its easier to cut a trading position
in a panic than a delivery position
u'll have to hunt for it and what not.

Tuesday, May 08, 2007

Old figure in my head:3975

3975 = ideal target for corrective 3975-3960 rising channel already mentioned this in my old analysis
but gotta also account for possibility of
failed flat, ie no new lows 4040 holding
or triangle 4074-4066 area to hold.
3975 came to me in a flash
just like hero honda 720
hero hit 718 in spot but in futures didn't go there so i didn't make much.

Dreaming up levels is fine
One must not trade on hope or illusions but on a definite plan
just take the next buy signal on the automated system.
http://niftytraders.blogspot.com .

remember the call setup
if you can get 4000 call for
100-120 its an ok buy target 200-240-300-340-400-440 in may itself.

All bullish views are founded on 3900 holding
If it doesn't hold game over.
Suggestion1: Look for stocks which are doing this to go short on.
Suggestion2: Only take eod shorts on stocks which close under 13/21 ema/previous swing highs/lows.
Do not try to short stuff like rcom
that would be a counter trend adventure
By all means look to sell rallies in cipla/icici/indhotel.

Fed meeting=wednesday
Market might make a confirmed move to upside by thursday.

Rcom investment

Rcom invest at 460-450
If you have booked profits in futures. invest some of the profits into delivery.
Hold for 1-2 years.
target 30% cagr in lines with earnings growth of 30-40-50%
30% returns on investment is a conservative target over the timeframe of next 2-5 years
Lets just look at 2 year targets
450*1.3 585 next year
then 585*1.3 760
Just rough estimates based on fundas

morgan stanley /merryl lynch have said
520-770 fy07, 08
fits with my figures
currently available at a p.e of roughly 30 times trailing
15 eps, * 30 = 450
I am taking the benign view that the balance sheet is not manipulated in giving these targets

Now lets see if my technical swing can throw up a level near 760 for us as the next target??
Here is the call in technical format for obsessive compulsive technicians who do not understand fundas and desire a stoploss.

RCOM, Analysis Date:5/8/2007
Close/cmp:462.5
Swing : Up=Buy ( 18.000% sensitivity)
T1:784.388 T2:1037.14
T3:1449.53 1xR:665.7
ImpulseTargetZone:1702.28-2114.67
SwingHigh:518.8 CMP:462.5
SwingLow:186.1 SLPivot:372.0
2xAtr14Stop:35.2682
Narrowsl:372.00
WideSl:280.95
Lower Chan:417.022 Upper Chan:670.383
ResLine:629.552
Retracements :518.85-372
0.236:440.321 0.382:391.74
0.5 :352.475 0.618:313.211
0.764:264.629
Notice the swing size
18%
this is an investment timeframe
not a typical trade
not to be taken in fno
since holding period is 2 years.
narrow sl can get whipsawed
wide sl should hold

Also if you were a trader
entry 460, sl 372 means risk of 90 rs
target of 520/784 means reward of? 60-224 rs
decide for yourself if the trade is sensible?
at 450 its a clear cut trade :)

I am going to also mention short term technical swing levels
Trade long only above s2 or s1 for intraday
use the targets mentioned

System: Trend follower)
Stock Name: RCOM
Buyarea=452.072
Support1 :460.02 Support2 :451.62
Resistance1:480.47 Resistance2:498.27
ATR(14)=17.8059
Target1:460.975 Target2:469.878
Target3:480.561
SL1:448.511 SL2:434.266
Sl to be employed on closing basis,

Fresh breakout is only above 484 and will target 515 within 3 sessions of breakout

These are based on my trading system , the one that 'walks on water' metaphorically speaking anyway i know i am a crazy person not people understand my views sometimes.
Vision=krissh , walking on water, twin peaks possibly being scaled?
If enough people insist that they do not want to hear about my dreams i will remove that too.

I will be the first one to say i am only 50% right, you don't need to tell me i am 50% wrong :). But when i am right the profits are 2-3 times as big as the losses.
Thats the way to make money.

Monday, May 07, 2007

Nifty still in 'w4' since 'w2' was 'sharp' expecting flat/triangular/complex corrective

Check pictures for list of levels for corrective and then the breakout if/when it comes
Gann and elder both talk about expecting a w5 and not seeing it come. So while u should be 'bullish' on nifty since trend is up, do not hesitate to short weak stocks if the trend says down. Also intraday shorting opportunities are always there. even if eod trend is now up there are times when intrady trend will be down.
As long as 3900 holds 4440 valid, thats the bullish view.
Some stocks will not make it above 4200, some will form local tops.
Vision: To walk on water one must be quick , twin peaks, flat correction or double top??
not gonna elaborate :)

Review old post for view on nifty.

http://fnocharts.blogspot.com/2007/04/nifty-maybe-w4-of-some-sort.html
http://fnocharts.blogspot.com/2007/04/old-post.html

We're heading towards the end of time allotted for bears
bulls will make a move very soon.

keep an eye on auropharma, hll, rcom, bharti, parsvnath, maybe even reliance though not a big fan at 1630 would rather be a bull at 1512-1476 in reliance but i guess market might not take it there.

auro is a buy at 676, rel near 510-500
rcom near 464/460/450, bharti near 800, parsvnath near 305-300-295
hll near 193

For details on levels or how to trade intraday try floor pivots
feeling too lazy to post the levels right now, need to go sleep soon

As it is this site gets maybe 5 hits a day, not worth the effort.
Then again maybe if I made some effort more people would visit.
Time to sleep now.

Sunday, May 06, 2007

Looking for a trading partner

Looking for a trading partner who specializes in fundamentals.
I get a lot of reports and stuff but I need someone who can summarize everything
and give me relative bets in a sector.
For instance I want to find stocks which have sell ratings with target 10-20% below cmp
and stocks which have buy ratings with target 20%+ above cmp with a 1 year timeframe.
The goal is to trade hedged with a slightly longer term view if technicals and fundamentals are aligned.
Ex. in pharma
Big brokers are giving a buy on wockhardt with 20% upside
and the charts also show some potential+ earnings are stable/improving
While cipla is being downgraded to hold/sell with a targets of anywhere from up 10% to down 20%
Charts also suggest weakness due to the falling gap 220-240
target could be around 180 below 210

Truth of the stock tape: another quote

W.D. Gann: "Truth of the stock tape"
A must read :)

"Wide fluctuations occur more often at high levels than
at low levels, because distribution is taking place. When
stocks reach very low levels after a final drive, they slow
down and often work for some time in a very narrow range
while accumulation is taking place. Accumulation and distribution
are exactly opposite. When the insiders want to
sell stocks, they make all the noise possible and do everything
to attract the attention of the public and create a large public
buying power. When stocks decline to low levels and they
want to accumulate a large line, they work just as quietly as
possible. They use every means to disguise the fact that
they are buying stocks, and do everything to discourage the
outsiders from buying them."

CAPM r/s list using 50 day alpha

Stocks sorted in order of alpha 50 day duration

Strongest stocks on top.

Read previous posts on ideas regarding how to trade

Ticker Date/Time alpha beta R-Sqr Duration
IFCI 5/4/2007 1.07 1.52 0.44 51
RENUKA 5/4/2007 0.98 0.31 0.02 51
ABAN 5/4/2007 0.73 0.71 0.44 51
JSTAINLESS 5/4/2007 0.62 0.77 0.50 51
JSWSTEEL 5/4/2007 0.59 1.09 0.45 51
TRIVENI 5/4/2007 0.51 0.26 0.09 51
LUPIN 5/4/2007 0.48 0.81 0.60 51
GESHIP 5/4/2007 0.45 0.24 0.62 51
JINDALSTEL 5/4/2007 0.44 0.72 0.68 51
PRAJIND 5/4/2007 0.44 1.48 0.62 51
SCI 5/4/2007 0.43 0.54 0.61 51
WOCKPHARMA 5/4/2007 0.43 0.61 0.13 51
I-FLEX 5/4/2007 0.43 0.31 0.45 51
SAIL 5/4/2007 0.39 1.48 0.73 51
COLGATE 5/4/2007 0.39 0.14 0.31 51
CORPBANK 5/4/2007 0.36 1.15 0.72 51
GTL 5/4/2007 0.36 0.80 0.68 51
BAJAJHIND 5/4/2007 0.35 0.48 0.11 51
TTML 5/4/2007 0.35 1.11 0.78 51
NAGARFERT 5/4/2007 0.35 1.42 0.73 51
RPL 5/4/2007 0.34 0.38 0.41 51
IPCL 5/4/2007 0.33 0.98 0.60 51
NDTV 5/4/2007 0.29 1.30 0.75 51
BANKINDIA 5/4/2007 0.28 1.35 0.75 51
TATATEA 5/4/2007 0.25 0.65 0.72 51
RELIANCE 5/4/2007 0.25 0.94 0.80 51
KOTAKBANK 5/4/2007 0.25 0.71 0.56 51
MAHSEAMLES 5/4/2007 0.24 0.79 0.73 51
BALRAMCHIN 5/4/2007 0.24 0.29 0.00 51
CESC 5/4/2007 0.24 0.85 0.30 51
DIVISLAB 5/4/2007 0.23 1.24 0.79 51
STER 5/4/2007 0.23 1.10 0.83 51
PARSVNATH 5/4/2007 0.22 1.39 0.77 51
NEYVELILIG 5/4/2007 0.22 0.75 0.71 51
CROMPGREAV 5/4/2007 0.21 1.00 0.74 51
SUZLON 5/4/2007 0.21 0.96 0.51 51
SOBHA 5/4/2007 0.20 1.27 0.66 51
RELCAPITAL 5/4/2007 0.19 1.42 0.86 51
NTPC 5/4/2007 0.18 0.37 0.27 51
GDL 5/4/2007 0.18 0.74 0.70 51
GLAXO 5/4/2007 0.18 0.24 0.20 51
PATNI 5/4/2007 0.17 0.60 0.62 51
J&KBANK 5/4/2007 0.17 0.57 0.58 51
ABB 5/4/2007 0.17 0.78 0.84 51
PNB 5/4/2007 0.17 1.33 0.72 51
IOB 5/4/2007 0.15 0.79 0.70 51
VIJAYABANK 5/4/2007 0.15 1.11 0.75 51
MCDOWELL-N 5/4/2007 0.14 0.99 0.53 51
BONGAIREFN 5/4/2007 0.14 0.39 0.67 51
IDFC 5/4/2007 0.14 1.39 0.88 51
NICOLASPIR 5/4/2007 0.13 0.82 0.44 51
VSNL 5/4/2007 0.13 1.03 0.80 51
BANKBARODA 5/4/2007 0.13 1.18 0.80 51
JPHYDRO 5/4/2007 0.13 0.89 0.89 51
SIEMENS 5/4/2007 0.12 0.98 0.66 51
NATIONALUM 5/4/2007 0.12 0.55 0.58 51
BHEL 5/4/2007 0.12 1.07 0.66 51
GMRINFRA 5/4/2007 0.12 1.24 0.70 51
SYNDIBANK 5/4/2007 0.11 1.06 0.72 51
BHARTIARTL 5/4/2007 0.11 1.10 0.78 51
GUJALKALI 5/4/2007 0.11 0.95 0.82 51
CANBK 5/4/2007 0.10 1.26 0.76 51
BEL 5/4/2007 0.10 0.96 0.68 51
GAIL 5/4/2007 0.09 0.46 0.55 51
ORCHIDCHEM 5/4/2007 0.09 0.87 0.33 51
MTNL 5/4/2007 0.07 0.76 0.30 51
UNIONBANK 5/4/2007 0.07 1.10 0.74 51
LT 5/4/2007 0.07 1.25 0.90 51
RCOM 5/4/2007 0.06 1.23 0.88 51
CHAMBLFERT 5/4/2007 0.06 0.79 0.53 51
BPCL 5/4/2007 0.06 0.65 0.81 51
BILT 5/4/2007 0.05 0.44 0.67 51
IOC 5/4/2007 0.05 0.40 0.46 51
TITAN 5/4/2007 0.04 1.18 0.81 51
ONGC 5/4/2007 0.04 0.94 0.78 51
HCLTECH 5/4/2007 0.04 1.11 0.51 51
CENTURYTEX 5/4/2007 0.04 1.57 0.82 51
BHARATFORG 5/4/2007 0.03 0.68 0.61 51
JETAIRWAYS 5/4/2007 0.03 1.01 0.80 51
SBIN 5/4/2007 0.02 1.20 0.83 51
ANDHRABANK 5/4/2007 0.02 0.63 0.60 51
MRPL 5/4/2007 0.02 0.78 0.73 51
ESSAROIL 5/4/2007 0.02 0.58 0.48 51
JPASSOCIAT 5/4/2007 0.01 1.07 0.76 51
SATYAMCOMP 5/4/2007 0.01 1.18 0.62 51
HINDALC0 5/4/2007 0.01 0.62 0.86 51
AMTEKAUTO 5/4/2007 0.01 0.73 0.77 51
VOLTAS 5/4/2007 0.01 1.11 0.49 51
FEDERALBNK 5/4/2007 0.01 0.85 0.86 51
TCS 5/4/2007 -0.00 1.03 0.36 51
DRREDDY 5/4/2007 -0.01 0.56 0.41 51
TATACHEM 5/4/2007 -0.01 0.51 0.64 51
HINDPETRO 5/4/2007 -0.02 0.62 0.43 51
GNFC 5/4/2007 -0.02 0.66 0.41 51
HEROHONDA 5/4/2007 -0.03 0.62 0.18 51
ALOKTEXT 5/4/2007 -0.03 0.82 0.83 51
LICHSGFIN 5/4/2007 -0.03 0.93 0.63 51
CAIRN 5/4/2007 -0.03 0.53 0.55 51
SUNPHARMA 5/4/2007 -0.03 0.55 0.20 51
TATAPOWER 5/4/2007 -0.03 0.67 0.80 51
PUNJLLOYD 5/4/2007 -0.03 1.31 0.93 51
BANK Nifty 5/4/2007 -0.04 1.20 0.92 51
HDFCBANK 5/4/2007 -0.04 1.02 0.77 51
IDBI 5/4/2007 -0.04 1.57 0.81 51
AUROPHARMA 5/4/2007 -0.05 0.29 0.43 51
HINDLEVER 5/4/2007 -0.06 0.87 0.47 51
SRF 5/4/2007 -0.06 1.22 0.72 51
STAR 5/4/2007 -0.06 0.52 0.01 51
INDHOTEL 5/4/2007 -0.06 0.76 0.55 51
BOMDYEING 5/4/2007 -0.07 1.53 0.41 51
HDFC 5/4/2007 -0.07 0.85 0.78 51
INDIACEM 5/4/2007 -0.07 1.23 0.57 51
ALBK 5/4/2007 -0.09 0.66 0.56 51
INDUSINDBK 5/4/2007 -0.09 1.43 0.45 51
BATAINDIA 5/4/2007 -0.10 1.11 0.60 51
DABUR 5/4/2007 -0.10 0.55 0.57 51
NAGARCONST 5/4/2007 -0.11 1.55 0.72 51
ESCORTS 5/4/2007 -0.11 1.11 0.64 51
SUNTV 5/4/2007 -0.11 0.89 0.75 51
SESAGOA 5/4/2007 -0.12 0.27 0.40 51
REL 5/4/2007 -0.13 0.58 0.81 51
KTKBANK 5/4/2007 -0.13 0.57 0.13 51
GRASIM 5/4/2007 -0.14 0.77 0.85 51
MARUTI 5/4/2007 -0.14 1.13 0.15 51
ITC 5/4/2007 -0.15 0.58 0.31 51
ICICIBANK 5/4/2007 -0.15 1.20 0.74 51
BEML 5/4/2007 -0.16 0.53 0.00 51
RANBAXY 5/4/2007 -0.16 0.66 0.64 51
UTIBANK 5/4/2007 -0.16 1.34 0.22 51
GUJAMBCEM 5/4/2007 -0.18 0.87 0.56 51
M&M 5/4/2007 -0.18 1.15 0.26 51
ORIENTBANK 5/4/2007 -0.20 1.42 0.84 51
ASHOKLEY 5/4/2007 -0.22 1.15 0.13 51
TVSMOTOR 5/4/2007 -0.22 0.95 0.23 51
INFOSYSTCH 5/4/2007 -0.22 1.01 0.17 51
CIPLA 5/4/2007 -0.23 0.95 0.18 51
MATRIXLABS 5/4/2007 -0.24 0.79 0.78 51
ARVINDMILL 5/4/2007 -0.24 0.94 0.20 51
IVRCLINFRA 5/4/2007 -0.25 1.79 0.51 51
WIPRO 5/4/2007 -0.29 1.39 0.24 51
ULTRACEMCO 5/4/2007 -0.29 0.94 0.26 51
TATAMOTORS 5/4/2007 -0.31 1.13 0.13 51
BAJAJAUTO 5/4/2007 -0.33 0.59 0.18 51
LITL 5/4/2007 -0.33 0.97 0.00 51
ACC 5/4/2007 -0.34 0.92 0.32 51
HCC 5/4/2007 -0.38 1.76 0.31 51
POLARIS 5/4/2007 -0.49 1.54 0.56 51

Pivot break Relative strength list

Stocks sorted in order of maximum breakouts
obviously 52 week high breakout type stuff would show up closer to the top of this list.
while new 52wk lows would show up at the bottom
If you are a trend follower you will look to buy 2-3 day declines in the stocks on the top of the list and sell rallies in the stocks at the bottom.
If you are a contrarian look to short good news. There will be tons of good news in the strong counters.
Ofcourse even if you are a contrarian. short only if u see new hourly lows. there has to be atleast some weakness!!!

Ticker Date/Time Triangle Trianglesunc ihsunc ihsc Doublebotu ihsc Hnsu Hnsc breakupc breakdownc
IFCI 5/4/2007 0.00 0.00 75.00 75.00 9.00 9.00 0.00 0.00 120.00 0.00
JSTAINLESS 5/4/2007 0.00 0.00 73.00 73.00 0.00 0.00 0.00 0.00 120.00 0.00
SCI 5/4/2007 0.00 0.00 21.00 21.00 13.00 13.00 0.00 0.00 120.00 0.00
DIVISLAB 5/4/2007 0.00 0.00 5.00 5.00 11.00 11.00 0.00 0.00 120.00 0.00
KOTAKBANK 5/4/2007 0.00 0.00 9.00 9.00 7.00 7.00 0.00 0.00 117.00 0.00
ABB 5/4/2007 0.00 0.00 7.00 7.00 21.00 21.00 0.00 0.00 117.00 0.00
JSWSTEEL 5/4/2007 0.00 0.00 7.00 7.00 0.00 0.00 0.00 0.00 115.00 0.00
ABAN 5/4/2007 7.00 0.00 0.00 0.00 40.00 40.00 0.00 0.00 112.00 0.00
JINDALSTEL 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 112.00 0.00
PRAJIND 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 112.00 0.00
PARSVNATH 5/4/2007 0.00 0.00 105.00 96.00 0.00 0.00 3.00 0.00 105.00 0.00
RELCAPITAL 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 105.00 0.00
RELIANCE 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 105.00 0.00
SAIL 5/4/2007 0.00 0.00 11.00 11.00 0.00 0.00 0.00 0.00 105.00 0.00
MAHSEAMLES 5/4/2007 0.00 0.00 48.00 48.00 3.00 0.00 0.00 0.00 105.00 0.00
I-FLEX 5/4/2007 0.00 0.00 51.00 51.00 0.00 0.00 0.00 0.00 105.00 0.00
LUPIN 5/4/2007 9.00 0.00 24.00 24.00 24.00 24.00 0.00 0.00 105.00 0.00
HCLTECH 5/4/2007 0.00 0.00 11.00 11.00 0.00 0.00 0.00 0.00 99.00 0.00
GESHIP 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 99.00 0.00
NAGARFERT 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 99.00 0.00
CESC 5/4/2007 0.00 0.00 9.00 0.00 0.00 0.00 5.00 0.00 96.00 0.00
JETAIRWAYS 5/4/2007 24.00 0.00 60.00 60.00 28.00 7.00 0.00 0.00 91.00 0.00
TTML 5/4/2007 0.00 0.00 11.00 11.00 16.00 16.00 0.00 0.00 91.00 0.00
IPCL 5/4/2007 0.00 0.00 9.00 9.00 0.00 0.00 0.00 0.00 91.00 0.00
NTPC 5/4/2007 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.00 85.00 0.00
GTL 5/4/2007 0.00 0.00 72.00 72.00 0.00 0.00 3.00 0.00 85.00 0.00
IVRCLINFRA 5/4/2007 0.00 0.00 12.00 0.00 0.00 0.00 0.00 0.00 84.00 0.00
BANKINDIA 5/4/2007 0.00 0.00 84.00 84.00 0.00 0.00 3.00 0.00 84.00 0.00
RPL 5/4/2007 0.00 0.00 17.00 0.00 45.00 45.00 0.00 0.00 77.00 0.00
SYNDIBANK 5/4/2007 0.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 64.00 0.00
NICOLASPIR 5/4/2007 0.00 0.00 9.00 0.00 0.00 0.00 0.00 0.00 64.00 0.00
CROMPGREAV 5/4/2007 11.00 0.00 33.00 33.00 11.00 11.00 0.00 0.00 63.00 0.00
GMRINFRA 5/4/2007 0.00 0.00 12.00 12.00 48.00 48.00 0.00 0.00 63.00 0.00
IDBI 5/4/2007 0.00 0.00 48.00 0.00 0.00 0.00 0.00 0.00 63.00 0.00
ORCHIDCHEM 5/4/2007 0.00 0.00 14.00 11.00 8.00 0.00 0.00 0.00 56.00 0.00
NEYVELILIG 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 55.00 0.00
RENUKA 5/4/2007 0.00 0.00 3.00 3.00 0.00 0.00 0.00 0.00 55.00 0.00
STER 5/4/2007 0.00 0.00 15.00 15.00 30.00 15.00 0.00 0.00 51.00 0.00
INDIACEM 5/4/2007 0.00 0.00 15.00 15.00 0.00 0.00 0.00 0.00 51.00 0.00
LICHSGFIN 5/4/2007 0.00 0.00 45.00 45.00 0.00 0.00 0.00 0.00 48.00 0.00
CORPBANK 5/4/2007 0.00 0.00 55.00 48.00 0.00 0.00 0.00 0.00 48.00 0.00
VIJAYABANK 5/4/2007 0.00 0.00 15.00 15.00 33.00 33.00 0.00 0.00 48.00 0.00
RCOM 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 48.00 0.00
GUJAMBCEM 5/4/2007 0.00 0.00 9.00 9.00 48.00 48.00 0.00 0.00 48.00 0.00
UNIONBANK 5/4/2007 0.00 0.00 35.00 28.00 0.00 0.00 0.00 0.00 48.00 0.00
ESCORTS 5/4/2007 0.00 0.00 37.00 9.00 28.00 28.00 0.00 0.00 48.00 0.00
GRASIM 5/4/2007 0.00 0.00 33.00 9.00 48.00 48.00 0.00 0.00 48.00 0.00
MRPL 5/4/2007 0.00 0.00 0.00 0.00 33.00 33.00 0.00 0.00 45.00 0.00
J&KBANK 5/4/2007 0.00 0.00 32.00 11.00 21.00 21.00 0.00 0.00 45.00 0.00
IDFC 5/4/2007 0.00 0.00 13.00 13.00 3.00 0.00 0.00 0.00 45.00 0.00
GAIL 5/4/2007 0.00 0.00 7.00 7.00 29.00 29.00 0.00 0.00 45.00 0.00
TCS 5/4/2007 0.00 0.00 5.00 0.00 36.00 3.00 0.00 0.00 43.00 0.00
TVSMOTOR 5/4/2007 0.00 0.00 40.00 40.00 40.00 40.00 0.00 0.00 40.00 0.00
SUNPHARMA 5/4/2007 0.00 0.00 0.00 0.00 8.00 0.00 16.00 0.00 40.00 0.00
KTKBANK 5/4/2007 0.00 0.00 0.00 0.00 8.00 0.00 0.00 0.00 40.00 0.00
GDL 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 40.00 0.00
JPASSOCIAT 5/4/2007 0.00 0.00 20.00 7.00 0.00 0.00 0.00 0.00 40.00 0.00
NDTV 5/4/2007 0.00 0.00 11.00 11.00 0.00 0.00 0.00 0.00 39.00 0.00
SUZLON 5/4/2007 0.00 0.00 14.00 0.00 36.00 0.00 3.00 0.00 39.00 0.00
ACC 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 35.00 0.00
SIEMENS 5/4/2007 0.00 0.00 16.00 16.00 9.00 9.00 0.00 0.00 35.00 0.00
INDUSINDBK 5/4/2007 0.00 0.00 16.00 16.00 27.00 27.00 0.00 0.00 35.00 0.00
COLGATE 5/4/2007 0.00 0.00 28.00 7.00 12.00 12.00 0.00 0.00 35.00 0.00
TATATEA 5/4/2007 0.00 0.00 33.00 9.00 0.00 0.00 0.00 0.00 33.00 0.00
MCDOWELL-N 5/4/2007 0.00 0.00 9.00 9.00 5.00 0.00 0.00 0.00 33.00 0.00
CENTURYTEX 5/4/2007 0.00 0.00 20.00 13.00 0.00 0.00 0.00 0.00 33.00 0.00
PUNJLLOYD 5/4/2007 0.00 0.00 20.00 20.00 13.00 13.00 0.00 0.00 33.00 0.00
CANBK 5/4/2007 0.00 0.00 24.00 0.00 0.00 0.00 0.00 0.00 33.00 0.00
LT 5/4/2007 0.00 0.00 9.00 9.00 0.00 0.00 0.00 0.00 32.00 0.00
VOLTAS 5/4/2007 0.00 0.00 16.00 16.00 0.00 0.00 0.00 0.00 32.00 0.00
HINDPETRO 5/4/2007 0.00 0.00 7.00 7.00 84.00 20.00 21.00 0.00 27.00 0.00
BHEL 5/4/2007 0.00 0.00 7.00 7.00 0.00 0.00 0.00 0.00 27.00 0.00
IOB 5/4/2007 0.00 0.00 20.00 20.00 0.00 0.00 0.00 0.00 27.00 0.00
FEDERALBNK 5/4/2007 0.00 0.00 27.00 27.00 72.00 0.00 0.00 0.00 27.00 0.00
VSNL 5/4/2007 0.00 0.00 11.00 0.00 0.00 0.00 0.00 0.00 27.00 0.00
CHAMBLFERT 5/4/2007 0.00 0.00 0.00 0.00 16.00 16.00 0.00 0.00 24.00 0.00
BATAINDIA 5/4/2007 0.00 0.00 16.00 16.00 3.00 3.00 0.00 0.00 24.00 0.00
ULTRACEMCO 5/4/2007 0.00 0.00 16.00 0.00 8.00 0.00 0.00 0.00 24.00 0.00
RANBAXY 5/4/2007 0.00 0.00 9.00 9.00 0.00 0.00 0.00 0.00 24.00 0.00
NAGARCONST 5/4/2007 0.00 0.00 24.00 0.00 0.00 0.00 3.00 0.00 24.00 0.00
TITAN 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 24.00 0.00
SUNTV 5/4/2007 0.00 0.00 24.00 24.00 0.00 0.00 0.00 0.00 24.00 0.00
PATNI 5/4/2007 0.00 0.00 0.00 0.00 55.00 0.00 0.00 0.00 24.00 0.00
PNB 5/4/2007 0.00 0.00 64.00 24.00 3.00 0.00 0.00 0.00 24.00 0.00
TRIVENI 5/4/2007 0.00 0.00 22.00 3.00 40.00 0.00 0.00 0.00 22.00 0.00
BHARTIARTL 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 21.00 0.00
INFOSYSTCH 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 21.00 0.00
BILT 5/4/2007 0.00 0.00 16.00 16.00 0.00 0.00 0.00 0.00 21.00 0.00
IOC 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 21.00 0.00
JPHYDRO 5/4/2007 0.00 0.00 7.00 0.00 72.00 0.00 0.00 0.00 21.00 0.00
DABUR 5/4/2007 0.00 0.00 11.00 0.00 28.00 0.00 0.00 0.00 20.00 0.00
BANK Nifty 5/4/2007 0.00 0.00 77.00 20.00 0.00 0.00 0.00 0.00 20.00 0.00
DRREDDY 5/4/2007 0.00 0.00 8.00 0.00 28.00 20.00 0.00 0.00 20.00 0.00
BANKBARODA 5/4/2007 0.00 0.00 39.00 0.00 17.00 17.00 0.00 0.00 17.00 0.00
REL 5/4/2007 0.00 0.00 36.00 0.00 27.00 9.00 0.00 0.00 16.00 0.00
ALBK 5/4/2007 0.00 0.00 21.00 0.00 0.00 0.00 0.00 0.00 16.00 0.00
TATAPOWER 5/4/2007 0.00 0.00 60.00 0.00 0.00 0.00 0.00 0.00 16.00 0.00
BHARATFORG 5/4/2007 0.00 40.00 5.00 5.00 48.00 3.00 0.00 0.00 15.00 0.00
WOCKPHARMA 5/4/2007 0.00 0.00 21.00 0.00 41.00 13.00 0.00 0.00 13.00 0.00
GUJALKALI 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.00 8.00
SOBHA 5/4/2007 11.00 0.00 0.00 0.00 11.00 11.00 0.00 0.00 11.00 0.00
HDFC 5/4/2007 0.00 0.00 0.00 0.00 51.00 0.00 3.00 0.00 11.00 0.00
GLAXO 5/4/2007 0.00 0.00 13.00 0.00 32.00 11.00 0.00 0.00 11.00 0.00
ALOKTEXT 5/4/2007 0.00 0.00 0.00 0.00 72.00 0.00 0.00 0.00 11.00 0.00
SBIN 5/4/2007 0.00 0.00 11.00 0.00 0.00 0.00 0.00 0.00 11.00 0.00
LITL 5/4/2007 0.00 0.00 16.00 0.00 0.00 0.00 0.00 0.00 11.00 0.00
BEL 5/4/2007 0.00 0.00 11.00 11.00 0.00 0.00 0.00 0.00 11.00 0.00
CAIRN 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00 9.00 0.00
HINDALC0 5/4/2007 0.00 0.00 56.00 0.00 0.00 0.00 3.00 0.00 9.00 0.00
GNFC 5/4/2007 0.00 0.00 5.00 5.00 5.00 5.00 0.00 0.00 8.00 0.00
M&M 5/4/2007 0.00 0.00 19.00 8.00 27.00 0.00 0.00 0.00 8.00 0.00
BALRAMCHIN 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.00 0.00
UTIBANK 5/4/2007 0.00 0.00 42.00 0.00 46.00 0.00 13.00 0.00 8.00 0.00
BONGAIREFN 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.00 0.00
ITC 5/4/2007 0.00 0.00 7.00 0.00 0.00 0.00 0.00 0.00 7.00 0.00
BAJAJAUTO 5/4/2007 0.00 0.00 12.00 0.00 0.00 0.00 0.00 0.00 3.00 0.00
CIPLA 5/4/2007 0.00 0.00 3.00 0.00 43.00 0.00 22.00 0.00 0.00 16.00
ESSAROIL 5/4/2007 0.00 0.00 32.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
ONGC 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
HCC 5/4/2007 0.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 0.00 0.00
TATACHEM 5/4/2007 0.00 0.00 16.00 0.00 45.00 0.00 0.00 0.00 0.00 0.00
BPCL 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
HDFCBANK 5/4/2007 0.00 0.00 24.00 0.00 33.00 0.00 3.00 0.00 0.00 0.00
BOMDYEING 5/4/2007 0.00 0.00 54.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
HEROHONDA 5/4/2007 0.00 0.00 7.00 0.00 20.00 0.00 40.00 0.00 0.00 0.00
HINDLEVER 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.00
ICICIBANK 5/4/2007 0.00 0.00 0.00 0.00 36.00 0.00 8.00 0.00 0.00 0.00
INDHOTEL 5/4/2007 0.00 0.00 52.00 0.00 3.00 0.00 0.00 0.00 0.00 0.00
BEML 5/4/2007 0.00 0.00 33.00 0.00 21.00 0.00 51.00 0.00 0.00 0.00
STAR 5/4/2007 0.00 0.00 0.00 0.00 32.00 0.00 0.00 0.00 0.00 7.00
SRF 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SESAGOA 5/4/2007 0.00 3.00 7.00 0.00 9.00 0.00 5.00 0.00 0.00 0.00
SATYAMCOMP 5/4/2007 0.00 3.00 24.00 0.00 0.00 0.00 7.00 0.00 0.00 0.00
POLARIS 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.00
MARUTI 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
BAJAJHIND 5/4/2007 0.00 0.00 0.00 0.00 8.00 0.00 0.00 0.00 0.00 7.00
MATRIXLABS 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 3.00 3.00 0.00 3.00
AUROPHARMA 5/4/2007 0.00 0.00 64.00 0.00 33.00 0.00 0.00 0.00 0.00 0.00
ASHOKLEY 5/4/2007 0.00 0.00 3.00 0.00 19.00 0.00 0.00 0.00 0.00 0.00
ARVINDMILL 5/4/2007 0.00 0.00 16.00 0.00 0.00 0.00 40.00 0.00 0.00 17.00
ANDHRABANK 5/4/2007 0.00 0.00 0.00 0.00 3.00 0.00 0.00 0.00 0.00 0.00
AMTEKAUTO 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
MTNL 5/4/2007 0.00 0.00 72.00 0.00 0.00 0.00 13.00 0.00 0.00 0.00
NATIONALUM 5/4/2007 0.00 0.00 48.00 0.00 56.00 0.00 0.00 0.00 0.00 0.00
ORIENTBANK 5/4/2007 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WIPRO 5/4/2007 0.00 0.00 16.00 0.00 57.00 0.00 0.00 0.00 0.00 0.00
TATAMOTORS 5/4/2007 0.00 0.00 0.00 0.00 19.00 0.00 0.00 0.00 0.00 0.00

Quantifying relative strength

Relative strength my way of doing it:
a stock which gives superior risk adjusted returns compared to nifty
Mathematically speaking
From a Capital asset pricing model perspective:

Relative strength can be quantified as a stock with high alpha
(high beta just means the stock is wild which means you want to trade it! but high alpha means the stock has been rewarding an investor with superior gains compared to the risks in holding it)

While larry williams would get into the nitty gritty of exact lows and highs and where market turned etc.
typical divergence setups
i.e stock higher low, nifty lower low = high rs
or stock new high before nifty = high rs
reverse for downside.

I actually had an argument with someone a few days ago who was questioning my buy call of idbi at 84-82 with sl 80-78 and target of 88-92-94

IDBI has a positive alpha + beta + rsqrd>0.8 for 20,200,1500 day durations
Meaning it is not a 'weak' stock in pure mathematical terms.
My chartist friends who were eyeballing the chart could not see this mathematical truth. Reason is they might be using 'pivots' in their own mind certain points of reference, highs/lows to derive 'relative strength/outperformance'
for instance if i bought idbi at its 52 week high last year, i would say it hasn't performed as well as some other stock which i bought at a 52 week high last year and has managed to make a new 52 week high :)

So anyway i guess the point is there are two ways to do relative strength
One is the pivot break. i.e all time high break is stronger than short term high break.
Second is the alpha/beta method
I will be posting a list of strongest+weakest stocks

How you use these values are up to you
you can be a trend follower, go long in dips on high alpha.
and go short in rallies on low alpha
will work really well for trading until good news/bad news which the insiders had been trading for arrives

Other way to trade is to
go long on breakouts in low alpha stocks if fundas are good
and go short in high alpha stocks if fundas are stretched when good news hits :)

Also some very important points for next few months as market heads to major topping out zone 4440-5550 monthly chart trendline.
Individual stocks can always form tops ahead of the markets!! So look to follow the trend on the weak alpha stocks on the downside as long as you are simulatenously long on some high alpha stocks.
I will be using a period of 25 days to do r/s
and the entire chart history to do the r/s based on pivot breaks.
meaning the pivot break list will show stocks which are showing max breakouts, above 52 week highs and what not. while my alpha/beta list will show r/s compared to nifty over last 1 month

Standing on the shoulders of giants: Relative strength

W.D. Gann from Truth of the stock tape
"If you are waiting for an indication to buy stocks, you
want to select the strongest stock in a certain group, as the
stock which is in the strongest position is naturally the one
that will lead in a Bull market and the one in weakest position
will lead in a Bear market."

"Suppose in 1920 or 1921 you were watching and waiting
to buy one of the Motor stocks. Note that the low price
on Studebaker in 1917 was 34; again in 1918 low 34. The
high in 1919 was 152. It declined to 38 in December, 1920,
holding 4 points above the support levels of 1917 and 1918,
which showed that it was in a strong position. However,
the general group of Motor stocks in the Spring of 1921
did not show any sure signs of having made bottom, but
Studebaker led the advance."

Larry williams from "The secret of selecting stocks for immediate and substantial gains"

"COMPARATIVE STRENGTH, THE SECRET TO FOLLOWING ALL STOCKS
Many people have been amazed that I can follow just about all stocks traded and
in an instant tell if the stock has been under basic accumulation or distribution.
There's really nothing to it other than an understanding of the preceding
paragraph.
You see, to spot professional accumulation, all we need to do is find an example
of steady and determined buying in the face of a weak stock market. When this
happens we have a good idea that professional buying is taking place.
Professional selling will show up when we see consistent and determined selling in
the face of a strong market. That is, when the market is surging up, but selling
pressures enter a particular stock we can bet that we have a stock undergoing
professional, informed selling."

Gr8 minds think alike? Or plagurism? No way to tell :)
As gann would say there is nothing new under the sun (which by the way he quotes from some other source which i cannot recall now)
Human psychology is the same it was 10,20,50,100 years ago. I don't think any significant evolutionary changes have yet occured in the human brain.
Some techniques have withstood the test of time.
Relative strength analysis is one such technique.

I would like to add my own corrolary to relative strength.
When a stock with mega high relative strength comes with good news it is more likely to get sold.
Reason: all those people who never follow the trend but follow the news finally have a reason to buy. The insiders have a reason to book profits. They created the high relative strength in the first place by continuously buying even when the market was selling!!
So imagine you are a trader you watch this stock go up and up and up and you don't buy. You keep thinking why is it going up? Instead of looking at what it is doing.
Finally when the news comes you jump in impulsively without looking at stuff like fibonacci targets etc. You will often end up buying the high or selling the low.

As usual caveat applies. If the new is earth shattering, huge funda news which could have an impact for few months/years then you never know the stock might reaccumulate at higher levels before going up.
However the fact remains that at the moment when the good/bad news comes on a high/low rs stock it will be extremely vulnerable to a correction.

Want examples??
Siemens bad news gap down 1030 now at 1200(13 month ema)
mphasis 32x top on buyback offer
ipcl 320 top on buyback offer for 350
reliance recent top on good news 1630 fib t3
indiacements top 242/254, buy back offer 264.

When i started to trade the markets I kept a notebook where I had my own list of patterns. One such pattern was what i called the 'double jump'
It looks like a double top except it doesn't break down significantly.
Maybe goes down by a few pts below previous low but then moves up violently.
This is what is called a flat correction in EWT :)
So perhaps larry williams did discover r/s independently but since gann wrote about it first I would say he should share the credit for 'larry williams' million dollar idea'.

Btw r/s works insanely well. it is the ultimate filter for any trend following system.
But like every other approach there are caveats :)
Read my corrolary, r/s works till good/bad news arrives; the reason why the insiders were making the abnormal move in the first place.
Once the abnormality is out into the open there is no longer an abnormality left to make crazy profits from.
Want an example?
Keep tracking sesagoa.
offer price 2032
it has already topped there once on good news. Offer is still valid.
could form a major top near 2030 area before working its way to lower levels.

Aban lloyd fccb conversion around 2750 news came few days ago when stock was near 2660-2700. Could form a top near 2750 area
Right now the stock is heading for support near 2450 or so and will probably require some time for distribution.
remember distribution can easily continue on the way up.
and you will often see 5-10% trading ranges as the stock distributes
Confirmation of distribution is only below the range.

Think Independently

A friend of mine made a comment about an analyst who was saying exit renuka at the bottom. Even I said to him sugar is weak man. Now my friend had not looked up renuka fundamentals or anything he was just making fun of the analyst and yet how right he was :)
Now Lets take a look at the current state of technicals.
Renuka as pointed out near 420 area : it has unfilled gap up near 414-400
When the market was doing a sideways a correction , another friend of mine chided me. In a market like this nothing will hold its levels.
RENUKA, Analysis Date:5/4/2007
Close/cmp:483.25
Swing : Up=Buy ( 11.000% sensitivity)
T1:598.219 T2:709.688
T3:891.557 1xR:603.65
ImpulseTargetZone:1003.02-1184.89
SwingHigh:510.0 CMP:483.3
SwingLow:299.2 SLPivot:416.4
2xAtr14Stop:47.3944
Narrowsl:416.35
WideSl:358.29
Lower Chan:432.373 Upper Chan:620.519
ResLine:726.364
How to trade:
Buy above swing high or above 0.5 retracement level for early entry
Sl : use narrow or wide sl or the support line

Retracements :510-416.35
0.236:438.451 0.382:452.124
0.5 :463.175 0.618:474.226
0.764:487.899

There are weak sugar stocks and strong ones
"Renuka is emerging as one of the largest Ethanol producers in India today & that will relatively sheild it's
bottomline from sugar commodity price swings. Also, it one of the major sugar exporters in country today & the
export incentives announced by the government will add to it's earnings, which we haven't incorporated.
Without incentives, however, stock is trading at 8.3x it's FY08 earnings. We will revise upwards our forecasts
shortly."

"Shree Renuka Sugars (SHRS IN, INR 454, maintain Accumulate)

Shree Renuka Sugars Limited's (SHRS) Q2FY07 results were below our estimates. The company's consolidated revenue grew 30% Y-o-Y to INR 3 bn driven by capacity ramp-up and higher capacity utilisation due to the peak crushing March quarter. As domestic sugar prices continue to remain soft, consolidated EBITDA fell 37% Y-o-Y to INR 366 mn for Q2FY07. The striking feature still remains a double digit operational margin on the sugar segment for the past few quarters, where most sugar mills are reporting single digit margin. SHRS reported consolidated earnings of INR 229 mn translating into EPS of INR 9.6 for the current quarter. Recent government support measures making export remunerative and improving coproducts profitability scenario reinstates our belief in SHRS as the best bet on the ailing sugar sector.

* Valuations available at discount to peers; best play on sector downturn

At CMP, the stock trades at P/E of 11x and 4.3x FY07E and FY08E consolidated earnings, respectively. On an EV to replacement cost, the stock is available at a relative discount to peers at 0.8x SS07E-end capacities. In addition to inherent advantage of operating in freer market (SMP applicable for cane procurement), as exports become remunerative with government support and higher contribution to profitability from coproducts, the outlook for SHRS remains positive over the next few quarters. Despite compelling valuations and decent growth outlook, in the absence of any significant medium-term catalyst to lead to buoyant valuations, we maintain our 'ACCUMULATE' recommendation on the stock."

Ideas from W.D. Gann

1) The daily move means nothing to the trend!!! Follow the weekly/monthly charts to make the big bucks!
"Another important fact traders overlook is that the more
times a man gets in or out of a market, the more times he
changes his judgment. Therefore, the percentage of his
being wrong increases. In a bull or bear market, there are
often big reverse moves opposite to the main trend, from
which big profits can be made, but a man can not catch them
by jumping in and out every day. He must wait until he
has a real cause and sufficient reasons, based on facts, before
he makes a trade. If he jumps in or out on hope or fear,
he will not only make losses, but he will miss the real opportunity
when it comes. The daily moves generally mean very
little to the main trend of the market."

2) Buy weakness monday/tuesday factor in a bull market
"A market that has been strong during the week or especially
during the latter part of the week and closes strong
on Saturday, is likely to open strong Monday and finish the
advance in the first hour on Monday. Therefore, be very
careful about buying stocks on Monday morning’s strong
opening. Public buying orders which accumulate over Sunday
are all executed Monday morning and as soon as this
demand is supplied professionals start selling and the market
has a reaction in proportion to its condition and position at
the time.
Even if it is a bull market and going higher you will be
able to buy cheaper on Monday afternoon or Tuesday when
the professionals are hammering prices down after the public
buying wave has been satisfied."

3) 2:30 factor
"As a rule, out-of-town buying orders accumulate over
night. If the buying orders are in excess of the selling,
stocks will advance for the first thirty minutes, while the
public’s buying orders are being filled. Then a reaction will
take place. Prices may go lower than they were at the
opening; drift along in an uncertain way until about 2 :30
P.M. when the professional crowd on the floor decide to
even up; then either advance or decline for thirty minutes,
according to whether the floor traders are long or short."

From "Truth of the stock tape"

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