If you want to be rich, act like you are rich.
If you want to be happy, act like you are happy..
Saturday, May 19, 2007
Nifty overvalued on fundas
Slightly overbought on the fundamental charts.
then again all time high forward p.e = 20
and trailing 26x or so
So maybe we could touch nifty 5000 before bulls notice that fundas cannot really take us higher?
Nifty should target 4400-4440-46xx-4900.
Check old post on w5 for levels.
People also keep throwing up the level 4350 on yahoo but its not showing up on my charts . Might be an arithmetic level.
Be discriminating in selecting stocks.
Even in the current market i can find you stocks trading at p.e.g of less than 1
and stocks trading at p.e.g of >2
My gameplan is to short p.e.g>2 while buying growth stocks available at value prices.
http://www.nationmaster.com/graph/eco_gdp_rea_gro_rat-economy-gdp-real-growth-rate
People do tend to make the same mistakes over and over and over
http://www.investmentu.com/IUEL/2006/20060223.html
'irrational exuberance'
We might be where the u.s was in the 60's/70s but that doesn't mean it is impossible to dip to a p.e of 10/5 or something in a crash scenario.
Refer to crash of u.s market in 1987.
http://www.investmentu.com/IUEL/2006/20060223.html
Friday, May 18, 2007
Dabur
Dabur is as good as a fixed deposit 100% in 5 years
question is where to enter
90-88-84 technical levels
for next few months
Fundamental levels 80-75-70
Max damage is 64.
So risk of 30-40% from 80 area and reward of 100%
don't chase it up
if it goes up
let someone else make money
u'll get it for 100 next year as well
If its already at 95 then the upsides are not major
my reco is buy at 84-88 highest and keep buying till 70 if it does drop without any change in fundas.
As for technicians I guess they made money :)
2 day falling channel breakout will face res at 96
I repeat do not chase
Just see prithvi
old post??
277 pullback trade??
Everyone wants it above 308 now....
Just because its a breakout. The fundamentals didn't change much
p.e/eps/bv/forward earnings estimates/stock ratings all are mostly static.
The good news in dabur is its not gonna breakout above 120 and go to all time new highs. Its still in a cycle degree wave 4 with mega mega support near 84 region.
Look to buy there, be patient :). If you can't get it at 84 this year u'll still be able to get it @ 100 next year so its not like you will miss out on much.
question is where to enter
90-88-84 technical levels
for next few months
Fundamental levels 80-75-70
Max damage is 64.
So risk of 30-40% from 80 area and reward of 100%
don't chase it up
if it goes up
let someone else make money
u'll get it for 100 next year as well
If its already at 95 then the upsides are not major
my reco is buy at 84-88 highest and keep buying till 70 if it does drop without any change in fundas.
As for technicians I guess they made money :)
2 day falling channel breakout will face res at 96
I repeat do not chase
Just see prithvi
old post??
277 pullback trade??
Everyone wants it above 308 now....
Just because its a breakout. The fundamentals didn't change much
p.e/eps/bv/forward earnings estimates/stock ratings all are mostly static.
The good news in dabur is its not gonna breakout above 120 and go to all time new highs. Its still in a cycle degree wave 4 with mega mega support near 84 region.
Look to buy there, be patient :). If you can't get it at 84 this year u'll still be able to get it @ 100 next year so its not like you will miss out on much.
Wednesday, May 16, 2007
Rel : Why every view has an other side
Short term weakness issues with fresh power projects.
This stock will double/tripple if/when the new power projects actually go through
if/then/else always
imagine you can buy a stock at cheap valuations
Now this is good only if the management is good and keeps the capital working efficiently.
Report from citisb.
74% of Rel assets are in cash and the company is at a p.e of 12.....
Its still valued cheaply. All that is required is a bold move by rel to utilize its cash!! As i mentioned in my previous view look , what if rel announces some weird plans. I mean can the ambani's really be so stupid that they don't notice the capital lying around in cash??? I don't know..
We'll know in 2-3 years if this capital is still lying around in cash or not.
The premise of buying stocks at cheap valuations is to get in early before the big parabolic move happens. It can take a while to materialize. Short term pressures will continue in rel so the trading call is negated. Only take in delivery. Punters can trade in tatapower/ntpc/cesc which look stronger.
"
Reliance Energy (RLEN.BO)
Downgrade to Sell: Deconstructing the Enigma
Disappointing — We are downgrading RELE to Sell (3L) from Buy (1H) and cutting
our target price to Rs510 given its 1) lack of delivery – four years after EA03, RELE
has only 941MW of capacity and distribution licenses in three circles; 2) inefficient
capital deployment – its RoCE is in the 2-4 % range, the lowest in our electric
utilities universe; and 3) modest long-term earnings growth of ~15%.
Lack of delivery — Many of RELE’s announced projects have hit 1) fuel supply
issues; 2) land allocation problems; or 3) regulatory snags leading to cash and
cash equivalents not being allocated in productive assets.
Inefficient capital deployment — RELE’s 2-4% RoCE is the lowest in our rated
electric utilities universe because 74% of its assets are in cash and cash
equivalents, a clear case of inefficient capital deployment.
Not the time to bottom fish — RELE’s stock underperformance versus the BSE
Sensex over the past six years and its expected 35% YoY earnings growth in
FY08E (from a low base) might seem like a good opportunity to bottom fish. We
believe this approach ignores the business realities as RoCE will be low and
long-term earnings growth will likely be a modest ~15%.
Positive ATE ruling to spur earnings growth — RELE should grow earnings at
20% CAGR over FY07E-10E driven by positive ATE rulings on the Mumbai
business. Despite higher interim growth from a low base, long-term steady state
earnings growth should remain a modest ~ 15%."
This stock will double/tripple if/when the new power projects actually go through
if/then/else always
imagine you can buy a stock at cheap valuations
Now this is good only if the management is good and keeps the capital working efficiently.
Report from citisb.
74% of Rel assets are in cash and the company is at a p.e of 12.....
Its still valued cheaply. All that is required is a bold move by rel to utilize its cash!! As i mentioned in my previous view look , what if rel announces some weird plans. I mean can the ambani's really be so stupid that they don't notice the capital lying around in cash??? I don't know..
We'll know in 2-3 years if this capital is still lying around in cash or not.
The premise of buying stocks at cheap valuations is to get in early before the big parabolic move happens. It can take a while to materialize. Short term pressures will continue in rel so the trading call is negated. Only take in delivery. Punters can trade in tatapower/ntpc/cesc which look stronger.
"
Reliance Energy (RLEN.BO)
Downgrade to Sell: Deconstructing the Enigma
Disappointing — We are downgrading RELE to Sell (3L) from Buy (1H) and cutting
our target price to Rs510 given its 1) lack of delivery – four years after EA03, RELE
has only 941MW of capacity and distribution licenses in three circles; 2) inefficient
capital deployment – its RoCE is in the 2-4 % range, the lowest in our electric
utilities universe; and 3) modest long-term earnings growth of ~15%.
Lack of delivery — Many of RELE’s announced projects have hit 1) fuel supply
issues; 2) land allocation problems; or 3) regulatory snags leading to cash and
cash equivalents not being allocated in productive assets.
Inefficient capital deployment — RELE’s 2-4% RoCE is the lowest in our rated
electric utilities universe because 74% of its assets are in cash and cash
equivalents, a clear case of inefficient capital deployment.
Not the time to bottom fish — RELE’s stock underperformance versus the BSE
Sensex over the past six years and its expected 35% YoY earnings growth in
FY08E (from a low base) might seem like a good opportunity to bottom fish. We
believe this approach ignores the business realities as RoCE will be low and
long-term earnings growth will likely be a modest ~15%.
Positive ATE ruling to spur earnings growth — RELE should grow earnings at
20% CAGR over FY07E-10E driven by positive ATE rulings on the Mumbai
business. Despite higher interim growth from a low base, long-term steady state
earnings growth should remain a modest ~ 15%."
Knowledge is power
Leave a comment if you find any of the links particularly useful
http://www.contentlinks.asiancerc.com/kotaknew/fundamental/FundaReports.asp
http://www.contentlinks.asiancerc.com/IB/
http://idbipaisabuilder.in/multex/mainmultex.asp
http://myiris.com/shares/resultWatch/resCalShow.php?ord=
http://www.indiaearnings.com/sub_india/results_calender.php
Bank nifty heading for 6200-6470-6650
Be careful at res levels from old highs etc same problem as nifty 4184-4240 area
in bank nifty 6280-6400 area
Andhra bank does targets
Possible upper channel short if bears can hold 93 region
Watch for weakness below 90 to short
above 93 can even try 100-110
next two levels
Keep buying rcom
Technicians will say rcom has underperformed bharti is weaker and will continue to do so. That is what a trend follower does.
Do you know the difference between a leader and a follower?
An alpha male and a bottom feeder?
Wayne Gretzky (Hockey legend) said, "Skate to where the puck is going, not to where it is,"
Rcom support is now placed near 474-480 sl stays below 448-460 target zone is 494-515. some selling is inevitable near old highs.
The initial buy call was 410 then 440, 448, 464.
Next entry is 474-480 if we do get a dip.
Keep in mind target was 520 for fy07 we're a little late but we're almost there, considering we already did it once in feb :)
If u do the target ahead of time in an efficient market you correct.
In an inefficient market u go crazy.
Think independently , go over the balance sheets of all 3 rcom/idea/bharti , try to get the scoop on future prospects , check out the views of the big guys from a 2-3 year perspective, form your opinion, check the charts, find a stoploss and trade it. In my view Rcom is cheap and it will grow like crazy in the next decade.
520 for this year.
650 next year
760-1000 in 2 years.
2000-3000 within 6 years.
5000 within 10 years.
Rcom will outperform both these other two telecom stocks in 2 years.
Thank me for this 'idea' in 2 years. not now
2 years ago i was saying tcs over infy. tcs used to be at 10-20% discount to infy
Now it trades at par on p.e terms.
The people who are stuck in the past are still insisting buy infy+short tcs and play for the return of premium in infy. To those people I can only say good luck :)
Here is a quote from a report by macquarie.
"Cheap valuation and recent stock underperformance should help drive the
stock
RCOM is still trading at a significant discount to Bharti. Based on FY09E EV/ EBITDA
multiples, RCOM is trading at a 21% discount to Bharti. The discount of RCOM’s valuations to
Bharti has been on the rise during the past 4-5 months. One of the main reasons behind the
increasing differences has been the widening gap between the market share of the two
companies. However, RCOM’s aggressive subscriber acquisition strategy should see a narrowing
of this market share differential over the next few months. We believe this will also lead to a
closing of the gap between the trading multiples of the two companies. In our opinion, RCOM
should be trading at a discount of ~10% to Bharti, not any larger.
The narrowing of the market share differential between RCOM and BHARTI should lead to stock
outperformance as is evident from stock underperformance vis-à-vis Bharti in the period when it
lost relative market share."
"
Among the cheapest Asian wireless stocks on growth adjusted multiples
On a growth-adjusted basis, RCOM is one of the most attractive stocks in our Asian wireless
universe. On the basis of EV/EBITDA-adjusted for EBITDA CAGR (EV/EBITDA divided by twoyear
EBITDA CAGR), RCOM is trading at multiple of just 0.40x compared to the Asian average of
0.46x. On a PEG basis, RCOM trades at a multiple of just 0.66x, one of the lowest among the
Asian wireless universe.
RCOMS is the second most inexpensive stock among India’s large high-growth stocks both
on EV/EBITDA/EBITDA CAGR and PEG basis. We believe the market is not pricing in the strong
growth that RCOM should see in the next few months. RCOM’s stock price should see significant
upward movement as the market corrects the anomaly."
Do you know the difference between a leader and a follower?
An alpha male and a bottom feeder?
Wayne Gretzky (Hockey legend) said, "Skate to where the puck is going, not to where it is,"
Rcom support is now placed near 474-480 sl stays below 448-460 target zone is 494-515. some selling is inevitable near old highs.
The initial buy call was 410 then 440, 448, 464.
Next entry is 474-480 if we do get a dip.
Keep in mind target was 520 for fy07 we're a little late but we're almost there, considering we already did it once in feb :)
If u do the target ahead of time in an efficient market you correct.
In an inefficient market u go crazy.
Think independently , go over the balance sheets of all 3 rcom/idea/bharti , try to get the scoop on future prospects , check out the views of the big guys from a 2-3 year perspective, form your opinion, check the charts, find a stoploss and trade it. In my view Rcom is cheap and it will grow like crazy in the next decade.
520 for this year.
650 next year
760-1000 in 2 years.
2000-3000 within 6 years.
5000 within 10 years.
Rcom will outperform both these other two telecom stocks in 2 years.
Thank me for this 'idea' in 2 years. not now
2 years ago i was saying tcs over infy. tcs used to be at 10-20% discount to infy
Now it trades at par on p.e terms.
The people who are stuck in the past are still insisting buy infy+short tcs and play for the return of premium in infy. To those people I can only say good luck :)
Here is a quote from a report by macquarie.
"Cheap valuation and recent stock underperformance should help drive the
stock
RCOM is still trading at a significant discount to Bharti. Based on FY09E EV/ EBITDA
multiples, RCOM is trading at a 21% discount to Bharti. The discount of RCOM’s valuations to
Bharti has been on the rise during the past 4-5 months. One of the main reasons behind the
increasing differences has been the widening gap between the market share of the two
companies. However, RCOM’s aggressive subscriber acquisition strategy should see a narrowing
of this market share differential over the next few months. We believe this will also lead to a
closing of the gap between the trading multiples of the two companies. In our opinion, RCOM
should be trading at a discount of ~10% to Bharti, not any larger.
The narrowing of the market share differential between RCOM and BHARTI should lead to stock
outperformance as is evident from stock underperformance vis-à-vis Bharti in the period when it
lost relative market share."
"
Among the cheapest Asian wireless stocks on growth adjusted multiples
On a growth-adjusted basis, RCOM is one of the most attractive stocks in our Asian wireless
universe. On the basis of EV/EBITDA-adjusted for EBITDA CAGR (EV/EBITDA divided by twoyear
EBITDA CAGR), RCOM is trading at multiple of just 0.40x compared to the Asian average of
0.46x. On a PEG basis, RCOM trades at a multiple of just 0.66x, one of the lowest among the
Asian wireless universe.
RCOMS is the second most inexpensive stock among India’s large high-growth stocks both
on EV/EBITDA/EBITDA CAGR and PEG basis. We believe the market is not pricing in the strong
growth that RCOM should see in the next few months. RCOM’s stock price should see significant
upward movement as the market corrects the anomaly."
Tuesday, May 15, 2007
Dabur: Accumulate in dips. 20% cagr for next 5 years safe investment
Trailing eps maybe 3.2 or so
fy08e 3.9
fy09 e 4.6
For me value is at 20-25x trailing , next year i would be willing to pay 80-100 rs for this stock. If its already at 88 where is the upside, 100/88 barely 12% I'd rather own a fixed deposit!!
Anyway don't go short or anything crazy, just look to buy in a panic if the market allows. Otherwise look for better investment opportunities.
Meaning I am a funda buyer at 75-80 or so for fy2007
market won't take it to 64
Though that would be ultimate value buy in a panic.
Just remember the levels for investment
target 160 in 5 years.
no stops as always on funda investments, you want a stoploss? try 50 rs.
DAbur is also expected to enter retail which could lead to higher valuations.
Just see pantaloon retail trades at 50x or something ebitda/ev or something, dunno look up the details and leave a comment on what u think.
Merry lynch says price objective is 104 1 year
Here is a copy+paste from the relevant report. i just recieved this report 16th march 2007. Compare my views (posted few days ago) with the pros :). Gr8 minds think alike
"Valuation marginally ahead of peers
Dabur is trading at P/E of 22xFY08E versus the sector (excl Tata Tea) at 20x. On a
PEG basis it is at 1.1x versus sector at 1x. We believe Dabur deserves some
premium for a diversified portfolio of powerful brands and a very strong track record."
Estimates (Mar)
(Rs) 2005A 2006A 2007E 2008E 2009E
Net Income (Adjusted - mn) 1,558 2,270 2,790 3,355 3,967
EPS 1.81 2.64 3.24 3.90 4.61
EPS Change (YoY) NA 45.7% 22.8% 20.3% 18.2%
Dividend / Share 0.832 1.17 1.46 1.75 2.07
Free Cash Flow / Share 1.70 (0.405) 2.92 3.41 3.50
Valuation (Mar)
2005A 2006A 2007E 2008E 2009E
P/E 49.02x 33.64x 27.39x 22.77x 19.26x
Dividend Yield 0.937% 1.31% 1.64% 1.98% 2.34%
EV / EBITDA* 37.11x 26.84x 22.15x 18.57x 15.80x
Free Cash Flow Yield* 1.91% -0.456% 3.30% 3.84% 3.94%
fy08e 3.9
fy09 e 4.6
For me value is at 20-25x trailing , next year i would be willing to pay 80-100 rs for this stock. If its already at 88 where is the upside, 100/88 barely 12% I'd rather own a fixed deposit!!
Anyway don't go short or anything crazy, just look to buy in a panic if the market allows. Otherwise look for better investment opportunities.
Meaning I am a funda buyer at 75-80 or so for fy2007
market won't take it to 64
Though that would be ultimate value buy in a panic.
Just remember the levels for investment
target 160 in 5 years.
no stops as always on funda investments, you want a stoploss? try 50 rs.
DAbur is also expected to enter retail which could lead to higher valuations.
Just see pantaloon retail trades at 50x or something ebitda/ev or something, dunno look up the details and leave a comment on what u think.
Merry lynch says price objective is 104 1 year
Here is a copy+paste from the relevant report. i just recieved this report 16th march 2007. Compare my views (posted few days ago) with the pros :). Gr8 minds think alike
"Valuation marginally ahead of peers
Dabur is trading at P/E of 22xFY08E versus the sector (excl Tata Tea) at 20x. On a
PEG basis it is at 1.1x versus sector at 1x. We believe Dabur deserves some
premium for a diversified portfolio of powerful brands and a very strong track record."
Estimates (Mar)
(Rs) 2005A 2006A 2007E 2008E 2009E
Net Income (Adjusted - mn) 1,558 2,270 2,790 3,355 3,967
EPS 1.81 2.64 3.24 3.90 4.61
EPS Change (YoY) NA 45.7% 22.8% 20.3% 18.2%
Dividend / Share 0.832 1.17 1.46 1.75 2.07
Free Cash Flow / Share 1.70 (0.405) 2.92 3.41 3.50
Valuation (Mar)
2005A 2006A 2007E 2008E 2009E
P/E 49.02x 33.64x 27.39x 22.77x 19.26x
Dividend Yield 0.937% 1.31% 1.64% 1.98% 2.34%
EV / EBITDA* 37.11x 26.84x 22.15x 18.57x 15.80x
Free Cash Flow Yield* 1.91% -0.456% 3.30% 3.84% 3.94%
EWT and the beauty of markets
From time to time one sees criticism of EWT
From: http://elliott-wave-theory.technicalanalysis.org.uk/
Presumably it be fair to say that "Elliott Wave Financial Forecast" is a fair assessment of Prechter's record up until mid-1999. Or even up until the present.
The Elliott Wave Financial Forecast offers advice for both traders and investors, both underperformed the market on an absolute basis. On a risk-adjusted basis, one equaled the market and the other underperformed.
Martin Sewell
Do people ever criticize English?? Read on for my view :)
kamal mahal: well severe criticism o elliot wave theory e oxusmorous
kamal mahal: he used to be the biggest follower of elliot wave theory a yr back
Raja: did u read
Raja: the link i sent on elliot something or other
Raja: the forecast given by prechter
Raja: underperformed the markets
Raja: what more do u want?
kamal mahal: well they r useless i know
Raja: if the masters of the theory couldn't beat the markets
Raja: what are the odds
Raja: of punters beating the markets with it
kamal mahal: its just a combination of possible ways and patterns market can sh
Raja: yes and every possible combination
Raja: is covered
Raja: and for every setup both views are allowed
kamal mahal: so it has no use just it will give u better understanding of marke
Raja: and even when market does clear 5 wave down move
Raja: weird stuff is allowed
Raja: like abc x abc
Raja: or something
Raja: to split up the 5 into a corrective
Raja: it is mostly hocus pocus
Raja: u relabel the waves in hindsight
Raja: but the strength of elliot wave theory in my view
Raja: is this
Raja: it is a language for communicating the current market's position between two analysts
kamal mahal: commu ?
Raja: if 2 people understand the language
Raja: they can exchange ideas quickly
Raja: on projections
kamal mahal: yaaa
Raja: its like the english language
Raja: its not the best
Raja: or most precise thing
Raja: that mankind every invented
Raja: it allows for double entendres
Raja: and poetry
Raja: and that makes it both imprecise
Raja: and beautiful
Of course the skeptic side of things is
EWT allows people who might not know much about markets or make much trading in the markets , to advise people on how to make money and get paid for it.
The flaw however remains in the people, not the language :)
From: http://elliott-wave-theory.technicalanalysis.org.uk/
Presumably it be fair to say that "Elliott Wave Financial Forecast" is a fair assessment of Prechter's record up until mid-1999. Or even up until the present.
The Elliott Wave Financial Forecast offers advice for both traders and investors, both underperformed the market on an absolute basis. On a risk-adjusted basis, one equaled the market and the other underperformed.
Martin Sewell
Do people ever criticize English?? Read on for my view :)
kamal mahal: well severe criticism o elliot wave theory e oxusmorous
kamal mahal: he used to be the biggest follower of elliot wave theory a yr back
Raja: did u read
Raja: the link i sent on elliot something or other
Raja: the forecast given by prechter
Raja: underperformed the markets
Raja: what more do u want?
kamal mahal: well they r useless i know
Raja: if the masters of the theory couldn't beat the markets
Raja: what are the odds
Raja: of punters beating the markets with it
kamal mahal: its just a combination of possible ways and patterns market can sh
Raja: yes and every possible combination
Raja: is covered
Raja: and for every setup both views are allowed
kamal mahal: so it has no use just it will give u better understanding of marke
Raja: and even when market does clear 5 wave down move
Raja: weird stuff is allowed
Raja: like abc x abc
Raja: or something
Raja: to split up the 5 into a corrective
Raja: it is mostly hocus pocus
Raja: u relabel the waves in hindsight
Raja: but the strength of elliot wave theory in my view
Raja: is this
Raja: it is a language for communicating the current market's position between two analysts
kamal mahal: commu ?
Raja: if 2 people understand the language
Raja: they can exchange ideas quickly
Raja: on projections
kamal mahal: yaaa
Raja: its like the english language
Raja: its not the best
Raja: or most precise thing
Raja: that mankind every invented
Raja: it allows for double entendres
Raja: and poetry
Raja: and that makes it both imprecise
Raja: and beautiful
Of course the skeptic side of things is
EWT allows people who might not know much about markets or make much trading in the markets , to advise people on how to make money and get paid for it.
The flaw however remains in the people, not the language :)
Monday, May 14, 2007
Classic rules of day/swing trading
http://www.rookiedaytrader.com/classic_rules.asp
There are some contradictions in the list which I find amusing
42/47 (42 is gann i think and 47 is raschke)
There are some contradictions in the list which I find amusing
42/47 (42 is gann i think and 47 is raschke)
sbi w5
Concrete example of the insanity that lies ahead
sbi successfull break that did min target of T1
A break above T1 would lead to 1246-1260-1301-1444=bonus target
Keep in mind playing long above t1 for a t2 = gr8er fool theory trade. As long as the fools keep coming you keep going up :)
SBIN, Analysis Date:5/14/2007
Close/cmp:1205.75
Swing : Up=Buy ( 3.000% sensitivity)
T1:1214.44 T2:1301.65
T3:1443.95 1xR:1259.45
ImpulseTargetZone:1531.16-1673.45
SwingHigh:1,165.8 CMP:1,205.8
SwingLow:960.3 SLPivot:1,072.2
2xAtr14Stop:105.727
Narrowsl:1,072.15
WideSl:1,014.09
Lower Chan:1093.21 Upper Chan:1246.17
ResLine:1336.74
The most recent buy setup in sbi was near 1080 area during the flat correction when my friend ghosh asked for the levels.
now its a breakout trade, only for the crazy daredevils who know how to manage risk and understand entering/exiting/reentering etc
Just showing this chart to show you the pattern which i believe nifty is about to display in the coming days :).
Namely uptrend , consolidation, uptrend.
This is called a measured move by the way in standard technicals and the most common target is t2.
In elliot wave if counting a w5 target is t1 and if extended w5 then t2/t3.
Lots of skepticism on yahoo :)
Nifty call lets see.
entry 100-120?
Should book 50% at 200-240?
And try to hold rest for 300-400...
Also do one thing sell 4300 or 4400 call as quickly as possible , this way you protect yourself from time decay. As it is may target is like 4400-4440 so u don't stand to lose much on the hedge and it saves you maybe 50 pts of time decay on the initial 4000 call
It is quite amusing to see the skepticism among the bulls these days and I don't blame the bulls either.
I am taking profits in delivery even as i continue to trade the long side in fno
Reason is it is not possible to exit at reasonable prices in a crash scenario.
If a stock is still at my funda value or i am holding a loss then of course there are no profits to book :)
Dow is down maybe 10-20 pts and bulls are panicking, without seeing that the dow is up 100 pts from last week's lows :)
anyway
yaad rakhna nifty also has a value area 16-17x trailing earnings and mega value area 13-15,
it also has an overbought area 20-22 p.e and mega overbought 25-30
right now only 19x
Goal is to keep the money flowing
As I have mentioned before my most powerful trading systems rely on just 1-2% a week to get rich.
If you look carefully at the recent trading calls, most would have hit t2/t3
some would have breaken out, trend or range? u never know
So trade half the position like its a range and trade other half like its a trend.
If we go down to gap up area 4070-4080 be a buyer small stop under 4060 or so
entry 100-120?
Should book 50% at 200-240?
And try to hold rest for 300-400...
Also do one thing sell 4300 or 4400 call as quickly as possible , this way you protect yourself from time decay. As it is may target is like 4400-4440 so u don't stand to lose much on the hedge and it saves you maybe 50 pts of time decay on the initial 4000 call
It is quite amusing to see the skepticism among the bulls these days and I don't blame the bulls either.
I am taking profits in delivery even as i continue to trade the long side in fno
Reason is it is not possible to exit at reasonable prices in a crash scenario.
If a stock is still at my funda value or i am holding a loss then of course there are no profits to book :)
Dow is down maybe 10-20 pts and bulls are panicking, without seeing that the dow is up 100 pts from last week's lows :)
anyway
yaad rakhna nifty also has a value area 16-17x trailing earnings and mega value area 13-15,
it also has an overbought area 20-22 p.e and mega overbought 25-30
right now only 19x
Goal is to keep the money flowing
As I have mentioned before my most powerful trading systems rely on just 1-2% a week to get rich.
If you look carefully at the recent trading calls, most would have hit t2/t3
some would have breaken out, trend or range? u never know
So trade half the position like its a range and trade other half like its a trend.
If we go down to gap up area 4070-4080 be a buyer small stop under 4060 or so
Nifty possible w5
http://fnocharts.blogspot.com/2007/04/nifty-maybe-w4-of-some-sort.html
Compare with old post abc looks done, now unless we are doing a complex corrective we should start moving up.
Fresh support from gap up created at 4084-4120 nifty spot
Big bad bears still waiting 4177/4184-4215/4240
Possible w5 strength above 4084-4135
Breakout begins above roughly 4215-4250
Target looks like 4400-4440
After this target is done some mega shorting is to be done.
There is no fresh entry signal up here unless u can handle sl levels of 3992-3900 or 4072 atleast.
S&P CNX NIFTY, Analysis Date:5/14/2007
Close/cmp:4134.05
Swing : Up=Buy ( 3.000% sensitivity)
T1:4399.92 T2:4649.84
T3:5057.61 1xR:4437.35
ImpulseTargetZone:5307.53-5715.3
SwingHigh:4,214.8 CMP:4,134.0
SwingLow:3,618.6 SLPivot:3,992.1
2xAtr14Stop:148.774
Narrowsl:3,992.15
WideSl:3,854.14
Lower Chan:4007.26 Upper Chan:4380.13
ResLine:4365.36
Retracements :4214.75-3992.15
0.236:4036.45 0.382:4063.85
0.5 :4086 0.618:4108.15
0.764:4135.55
Strength above 0.5
Might retest gap up 4086-4108 one last time before the big breakout.
Compare with old post abc looks done, now unless we are doing a complex corrective we should start moving up.
Fresh support from gap up created at 4084-4120 nifty spot
Big bad bears still waiting 4177/4184-4215/4240
Possible w5 strength above 4084-4135
Breakout begins above roughly 4215-4250
Target looks like 4400-4440
After this target is done some mega shorting is to be done.
There is no fresh entry signal up here unless u can handle sl levels of 3992-3900 or 4072 atleast.
S&P CNX NIFTY, Analysis Date:5/14/2007
Close/cmp:4134.05
Swing : Up=Buy ( 3.000% sensitivity)
T1:4399.92 T2:4649.84
T3:5057.61 1xR:4437.35
ImpulseTargetZone:5307.53-5715.3
SwingHigh:4,214.8 CMP:4,134.0
SwingLow:3,618.6 SLPivot:3,992.1
2xAtr14Stop:148.774
Narrowsl:3,992.15
WideSl:3,854.14
Lower Chan:4007.26 Upper Chan:4380.13
ResLine:4365.36
Retracements :4214.75-3992.15
0.236:4036.45 0.382:4063.85
0.5 :4086 0.618:4108.15
0.764:4135.55
Strength above 0.5
Might retest gap up 4086-4108 one last time before the big breakout.
Sunday, May 13, 2007
Nifty weekly view
Next week's strategy for nifty based on weekly levels
Stock Name: S&P CNX Nifty
Pivot:4071.82
Lo: 3,981.1 Hi: 4157.65
S1: 3,986.0 R1: 4162.48
S2: 3,895.3 R2: 4248.32
Projected Hi:4134.4 Projected Low:3933.4
Projected Close:4034.58
The projections are based on a linear corrective channel, if the projections are violated significantly the market might be in a new trend.
The pivot point is 4072 long above that for 4135-4160-4200-4240
and short below pivot for 3986-3981-3933
Weekly strategy based on brute force elliot wave (not weird diametrics etc since I don't understand what in gods name a diametric is and how it works, if you want twisted wave counts go read patil, he is the master of convoluted ewt)
w4 ideal retrace support @ 0.382 3987, 0.5 3915 sl w1 top 3900 , target 4184-4240-4440
Just remember, standard technicals w4 is another word for a higher low
and the bullish hope is that we are doing a complex/flat/sideways corrective
If you see a stock trending down or doing a double top/hns no harm in trying to trade it short.
Dow held 13200 : low 13216 and our markets held 3987
Dow made a damn near full recovery on friday.
The level given for trading long intraday worked perfectly above 4030 play long sl 4020. These were automated system levels.
Also the narrow sl 4020 was not hit on closing basis nor was the wide stop hit 3965
narrow sl is whipsaw prone intraday but wide stop should be used for disaster protection.
For now I stick with the rising channel view. The trend is the channel this is ewt+gann+elder ema all 3 saying up.Nifty view remains 3987/3915/3900+ -> 4184-4240-4440.
Possibility of a complex corrective pattern unfolding remains but the key is that the drop should not be very steep now this was mentioned in the initial analysis for the w4. W4 as a general rule should not break the rising channel significantly.
critical for next week 4100 and 4135 for any upside breakouts.
The bullish view is justified on 1 year fundas considering that nifty is at fair value 19x earnings 20% growth rate. We can go down 10-15% max where value buyers would be waiting and up maybe 5-10-20%. Then again someone was saying sensex fy08e is 1000???
Target for next year could be 16-19k. The question is does anyone release reports on the fundamental valuation of nifty/sensex? Why do people release 10 times as many technical reports for nifty/sensex and the other way around in stocks???
If someone has a funda report on nifty/sensex for 1-2 years send me a copy.
Last one i had said something like sensex 50k in 10 years by morgan stanley using 8% cagr gdp growth rate.
The only safe way to be long nifty is with call options. 4000 call for 100-120, reward/risk is built into the price of the call itself.
Watch the rising channel in stocks. Nifty/reliance/rcom type stuff will collapse much later than individual stocks if we are indeed double topping.
One can trade hedged by being short on broken channels/weak stocks and being long on stocks giving fresh breaks or holding their supports in this sideways phase.
I'm going to take a small break from overtrading :)
Will just play positional on nifty i think.
Coding a cutting edge system based on fractals
No not the bill williams 'fractal' which is just one example of a 'fractal' http://en.wikipedia.org/wiki/Fractal
Elliot wave is a fractal
1-2-3 higgerty is a fractal
1-2-3-4-5 + trendline break is a fractal
1-2-3-4-5+abc is a fractal
an inv hns is a fractal
a hns is a fractal
a triangle is a fractal
etc etc
the question is which arrangements are profitable with what kind of entry/exit/sl/trailing stop?
One could test by hand and go crazy. Since I am already quite crazy and do not wish to go completely insane, I am going to let a computer crunch the numbers to find both global and local optimals.
Some people were asking for delivery picks
dabur invest 90-80-70 invest sl 50 target
100-120-160-180-240
1-2-3-4-5 years
Market is priced for growth there are not many bargains at current levels in the frontlines.
ex dabur cagr 20% currently trading at 30x earnings bring it down to 20-25x trailing and I would seriously buy tons
Considering that there is a lot of certainty in the future growth of dabur it might mantain premium valuations and just go sideways instead of down.
If you want to get rich you gotta wait for the panic to enter dabur
near 80-76 ideally
rcom already given read old post.
wockhardt 400-384 support zone, long term pick. trailing eps 17*20 value area is 340 but market might not bring it down to value, target is 32*20 within 2 years 640.
Also be wary of how the fresh acquisition impacts the stock, stock has been declining ever since the acquisition news/results.
hll also a long term pick, but hll needs to get its act together before it gets bashed by dabur/colgate
Up until few years ago hll used to be 30x earnings and dabur was 20x
now dabur is 30x and hll is 20x
how quickly life changes :)
Tcs also given as an invesment near 1200-1150-1050-1000
sl 500 target 1500-2000-3000 etc etc etc.
They are adding another 32k employees this year.
They will keep growing 30% cagr for quite a few years maybe even a decade.
This rupee appreciation setback is temporary
and even with this i believe they have significant pricing power and could actually raise billing rates for the offshore component to offset the stronger rupee.
Go talk to some tcs manager to get the inside scoop :)
Maruti given as a possible investment near 784-800 20% growth rate selling for 15x
What else: Will post other picks later
Keep in mind no stops in delivery except fundamental stops. Like guidance gets lowered or yoy slowdown etc.
Max position size 5-10% of capital in one stock.
Parsvnath delivery pick near 300 target 600 sl 150
The only reason I am giving the sl figure is so that people buy only in small quantities in delivery :)
The trading levels if any will be posted separately parsvnath narrow sl 295 wide 288 or so
Target 320-352 soon but first some consolidation around 300
false breaks on both sides possible. Long above 300-295, sit idle below 295-288.
Rel invest 500-440 region hold for 650-720
Short term some problems with u.p land mayavati and what not
But use short term weakenss to enter.
Old buy call on rel is also there with sl 500
Traders might want to avoid rel and try long on tatapower/ntpc/cesc
Just remember
reliance brothers feud 550 stock crashed to 480 (p.e of 10-12x)
stock rallied 520-530 buyback announced for 570 stock dipped to 480
Currently reliance trades at 1500+ :) (p.e of 20x)
Another investment pick
Stock Name: ASHOKLEY
Buyarea=37.7476
Support1 :39.74 Support2 :37.71
Resistance1:50.10 Resistance2:57.75
Target1:41.5717 Target2:45.3958
Target3:49.9848
SL1:36.218 SL2:30.0994
REL is near a p.e of 10-13 right now
Will touch 650 in 2 years
720 within 3
Wouldn't it be fun if REL were to go into retail as well?
Or some other venture?? :)
I mean all reliance had to do was go into retail and it goes from a stock which can barely sustain 10x p.e to something that rides high at 20x.
You have to understand when you are a huge company with cash on books which is idle you can do a lot with it.
Ambanis are among the top 20 richest people of the world.
P.E etc is fine but cash is king, do not forget that.
Stock Name: S&P CNX Nifty
Pivot:4071.82
Lo: 3,981.1 Hi: 4157.65
S1: 3,986.0 R1: 4162.48
S2: 3,895.3 R2: 4248.32
Projected Hi:4134.4 Projected Low:3933.4
Projected Close:4034.58
The projections are based on a linear corrective channel, if the projections are violated significantly the market might be in a new trend.
The pivot point is 4072 long above that for 4135-4160-4200-4240
and short below pivot for 3986-3981-3933
Weekly strategy based on brute force elliot wave (not weird diametrics etc since I don't understand what in gods name a diametric is and how it works, if you want twisted wave counts go read patil, he is the master of convoluted ewt)
w4 ideal retrace support @ 0.382 3987, 0.5 3915 sl w1 top 3900 , target 4184-4240-4440
Just remember, standard technicals w4 is another word for a higher low
and the bullish hope is that we are doing a complex/flat/sideways corrective
If you see a stock trending down or doing a double top/hns no harm in trying to trade it short.
Dow held 13200 : low 13216 and our markets held 3987
Dow made a damn near full recovery on friday.
The level given for trading long intraday worked perfectly above 4030 play long sl 4020. These were automated system levels.
Also the narrow sl 4020 was not hit on closing basis nor was the wide stop hit 3965
narrow sl is whipsaw prone intraday but wide stop should be used for disaster protection.
For now I stick with the rising channel view. The trend is the channel this is ewt+gann+elder ema all 3 saying up.Nifty view remains 3987/3915/3900+ -> 4184-4240-4440.
Possibility of a complex corrective pattern unfolding remains but the key is that the drop should not be very steep now this was mentioned in the initial analysis for the w4. W4 as a general rule should not break the rising channel significantly.
critical for next week 4100 and 4135 for any upside breakouts.
The bullish view is justified on 1 year fundas considering that nifty is at fair value 19x earnings 20% growth rate. We can go down 10-15% max where value buyers would be waiting and up maybe 5-10-20%. Then again someone was saying sensex fy08e is 1000???
Target for next year could be 16-19k. The question is does anyone release reports on the fundamental valuation of nifty/sensex? Why do people release 10 times as many technical reports for nifty/sensex and the other way around in stocks???
If someone has a funda report on nifty/sensex for 1-2 years send me a copy.
Last one i had said something like sensex 50k in 10 years by morgan stanley using 8% cagr gdp growth rate.
The only safe way to be long nifty is with call options. 4000 call for 100-120, reward/risk is built into the price of the call itself.
Watch the rising channel in stocks. Nifty/reliance/rcom type stuff will collapse much later than individual stocks if we are indeed double topping.
One can trade hedged by being short on broken channels/weak stocks and being long on stocks giving fresh breaks or holding their supports in this sideways phase.
I'm going to take a small break from overtrading :)
Will just play positional on nifty i think.
Coding a cutting edge system based on fractals
No not the bill williams 'fractal' which is just one example of a 'fractal' http://en.wikipedia.org/wiki/Fractal
Elliot wave is a fractal
1-2-3 higgerty is a fractal
1-2-3-4-5 + trendline break is a fractal
1-2-3-4-5+abc is a fractal
an inv hns is a fractal
a hns is a fractal
a triangle is a fractal
etc etc
the question is which arrangements are profitable with what kind of entry/exit/sl/trailing stop?
One could test by hand and go crazy. Since I am already quite crazy and do not wish to go completely insane, I am going to let a computer crunch the numbers to find both global and local optimals.
Some people were asking for delivery picks
dabur invest 90-80-70 invest sl 50 target
100-120-160-180-240
1-2-3-4-5 years
Market is priced for growth there are not many bargains at current levels in the frontlines.
ex dabur cagr 20% currently trading at 30x earnings bring it down to 20-25x trailing and I would seriously buy tons
Considering that there is a lot of certainty in the future growth of dabur it might mantain premium valuations and just go sideways instead of down.
If you want to get rich you gotta wait for the panic to enter dabur
near 80-76 ideally
rcom already given read old post.
wockhardt 400-384 support zone, long term pick. trailing eps 17*20 value area is 340 but market might not bring it down to value, target is 32*20 within 2 years 640.
Also be wary of how the fresh acquisition impacts the stock, stock has been declining ever since the acquisition news/results.
hll also a long term pick, but hll needs to get its act together before it gets bashed by dabur/colgate
Up until few years ago hll used to be 30x earnings and dabur was 20x
now dabur is 30x and hll is 20x
how quickly life changes :)
Tcs also given as an invesment near 1200-1150-1050-1000
sl 500 target 1500-2000-3000 etc etc etc.
They are adding another 32k employees this year.
They will keep growing 30% cagr for quite a few years maybe even a decade.
This rupee appreciation setback is temporary
and even with this i believe they have significant pricing power and could actually raise billing rates for the offshore component to offset the stronger rupee.
Go talk to some tcs manager to get the inside scoop :)
Maruti given as a possible investment near 784-800 20% growth rate selling for 15x
What else: Will post other picks later
Keep in mind no stops in delivery except fundamental stops. Like guidance gets lowered or yoy slowdown etc.
Max position size 5-10% of capital in one stock.
Parsvnath delivery pick near 300 target 600 sl 150
The only reason I am giving the sl figure is so that people buy only in small quantities in delivery :)
The trading levels if any will be posted separately parsvnath narrow sl 295 wide 288 or so
Target 320-352 soon but first some consolidation around 300
false breaks on both sides possible. Long above 300-295, sit idle below 295-288.
Rel invest 500-440 region hold for 650-720
Short term some problems with u.p land mayavati and what not
But use short term weakenss to enter.
Old buy call on rel is also there with sl 500
Traders might want to avoid rel and try long on tatapower/ntpc/cesc
Just remember
reliance brothers feud 550 stock crashed to 480 (p.e of 10-12x)
stock rallied 520-530 buyback announced for 570 stock dipped to 480
Currently reliance trades at 1500+ :) (p.e of 20x)
Another investment pick
Stock Name: ASHOKLEY
Buyarea=37.7476
Support1 :39.74 Support2 :37.71
Resistance1:50.10 Resistance2:57.75
Target1:41.5717 Target2:45.3958
Target3:49.9848
SL1:36.218 SL2:30.0994
REL is near a p.e of 10-13 right now
Will touch 650 in 2 years
720 within 3
Wouldn't it be fun if REL were to go into retail as well?
Or some other venture?? :)
I mean all reliance had to do was go into retail and it goes from a stock which can barely sustain 10x p.e to something that rides high at 20x.
You have to understand when you are a huge company with cash on books which is idle you can do a lot with it.
Ambanis are among the top 20 richest people of the world.
P.E etc is fine but cash is king, do not forget that.
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