fnocharts

CAT 2008 final score 99.36 pctile

2009-01-08T14:58:00.000-08:00

Weak score in quant even though I am not weak in mathematics per se.
Final verdict : I need to improve my time management skills.

1-2 fewer questions in DI and 1-2 extra questions in quant would have meant IIM A, C and K.
I actually spent 40 mins english, 1 hr DI and 50 mins quant.
40/50/1hr or 40/55/55 would have done the trick.

Hedge funds

2008-12-14T20:04:00.000-08:00

So I can be a little headstrong:
Refer to old post:

http://fnocharts.blogspot.com/2007/06/buffet-vs-raja-on-derivatives.html

I have taken some losses this year, both in derivatives and in investments.
Lets hope I come out stronger at the end of this bear market. I've still got cash and I've still got the will.

Old quote:

"It will be very interesting to note whether the top performing fund of the 21st century will be a hedgefund or a 'value/sip/buffet/graham type fund"

I wonder what the top value/sip type fund has returned in the recent financial crisis.
One of the top performing hedge funds is Medallion, I don't think any regular fund or even Warren Buffet comes close to the performance delivered by Medallion.
Of course few important points should be noted: Buffet has a longer track record, and he is still bigger in size. (total returns delivered). Not all funds run by the owner of medallion have returned phenomenal profits.
Another distinction is the fee. The management fees charged by medallion are huge almost 40%+. So medallion not only makes massive amounts of money for others they also make insane cash for themselves.
Anyway we will need another decade or two to see who truly comes out on top.
(remember that mutual funds need a bull market to actually deliver any major returns so another 2-5 years should in my view be enough to get a clear picture of who weathered the financial storm better)

Buffet/Soros/other top manager returns here:
http://www.coattailinvestor.com/

Some info on Renaissance funds here:
http://www.answers.com/topic/renaissance-technologies

http://www.nypost.com/seven/08082008/business/medallion_fund_hits_a_jackpot_123592.htm
"Last year, Medallion earned upward of 85 percent. And despite tumultuous markets last month, which slammed some of the year's best performing funds, Medallion was up nearly 7 percent in July, The Post has learned.

Medallion, which specializes in lightening-fast trading directed by complicated computer models, does best when there's volatility, people say.

Of course, not everything Simons touches turns to gold. The firm's Renaissance Institutional Equities Fund, which was launched in 2005 for outside investors, now manages around $15 billion in assets, down from around $28 billion a year ago."

http://www.hedgefundsindia.com/blog/_archives/2008/10/24/3944998.html
I suspect the survivors of this bear market will dominate the markets in the next century.

Another interesting point
Watch how one site distorts Renaisance head Jim Simon's view
"He declined to discuss any particular Renaissance strategy, except to say that "trend following," a strategy that identifies trends in any particular market, has "lost its zip" in recent years due to intense investor speculation, a factor which accelerates trends."
This is the original viewpoint
http://seekingalpha.com/article/22014-hedge-fund-renaissance-equities-still-smoking

DISTORTED WITH ADS on this site:
http://www.turtletrader.com/trader-simons.html

Cues negative, world down a tad, iip expected to come in lower

2008-12-11T19:30:00.000-08:00

Key question: Can we hold the supports with the weak cues?
hourly charts might top out below 2870 ish
below that 2830/2800/2770/2700
We really need to hold 2830 to keep the breakout/momentum intact on the short term charts.

Bears are gonna have a field day today with all the negatives.
What I want to see is whether we can rally post the weak IIP
if we can then we have a good chance of going higher until then ultra short term looking to short.

Also keep an eye on REL to see if it can clear 626 that will be a sign of things to come
triangle or abc.

Nifty chart analysis

2008-12-10T20:04:00.000-08:00

3 charts for nifty dec series.
Invhns type of move forming for bulls
for bears maybe a triangle and they'll keep trying to short on the way up finding every level/resistance as an excuse.

My view? 3260+ likely
HSI did it
dow almost doing it.

And guess which stock is leading the rally in nifty??
REL...
much closer to old high 626 cmp 606 ish.

Power sector remains my favorite sector, fundamental reasons.
So for anyone who says technicals precede fundamentals. Think again.

Rel was damn 'weak' at 360-400 (relative to nifty)
now its 'strong'.

I need to find some kind of economic calendar for India so I can be prepared ahead of time for the major data releases.
If anyone has an idea, leave a link.

For the u.s there are lots of sites with good coverage.
Need something similar for India.
I wonder why cnbc tv 18/moneycontrol don't have any organized section
they added the indiaearnings site which is a good step. They should also add something along the lines of an economic calendar.

REL Inv hns

2008-11-29T09:05:00.001-08:00

Rel inv hns breakout above 626 but strong above 470
play long target 520-540-580-626-666-726
sl below 470

BHEL

2008-11-29T08:18:00.000-08:00

strong above 1324 sl 1300
target 1355-1370-1456-1550
Chart later: feeling lazy.

Still stuck on the CAT....

2008-11-18T10:02:00.000-08:00

Spent more time on cat 2008 analysis
I guess scores vary a bit depending on which answer key is used!!
TIME: 29/45/66 total 140 required 18/28/42/120
Career Forum: 29/45/66 total 140 vs required cutoffs 28/32/46/116
IMS: 29/45/66 total 140 vs required cutoffs 32/32/46/120
CL: 29/45/56 total 130 vs required 30/26/44/121
PT: 29/45/66 total 140 vs 39/29/47/115

I think clearing the cutoff means 1 call and every 4 pts above the cutoff could mean one additional call.
Usually 24 pts above the cutoff would mean almost all calls.
Screwed by quant I suspect... I probably have the basic cutoff for all iim's except A/C
Lets see what happens.

Anyway, getting back to trading: I will post a good chart soon , I promise :)
Just waiting for REL to confirm eod low.
I don't wanna analyze 20 stocks and make 50 trades. I just want one big move for december.
Its the big inv hns patterns/double bottoms etc that I talked about earlier; REL will give the best setup of all.

CAT 2008 written test is over, but I'm still not quite over it.

2008-11-18T05:23:00.000-08:00

                      QA DI EU OVERALL 
Your Score            29 45 56 130 
Predicted CAT %ile    87.62 97.56 99.4 98.48

I can't quite seem to get over the 98.4 pctilish score in CAT 2008. another 45 seconds/1-2 questions in Quant could have meant IIM A/B/C.
Cutoff for iim means around 97.5 pctile barely enough for iim i/k/l
a/c take in much higher scores 98.5-99.5pctile
(Even harvard takes in 95-98 pctile .... but india. of course.. 99.9999999 is what u need to win out here)

iim-b I guess is the exception as it pays more attention to work exp in its selection process.
Unfortunately for me. full time trading for 2 solid years counts as 0 years of work ex!!!
I wonder who would make a better asset manager 3 years from now:
Someone who spent 2 years in a cubicle at tcs/infy and then did an mba finance from iim??
Or someone who actually watched almost every tick for atleast 2 years, studied almost every significant theory on trading the markets and watched/traded one full bull/bear swing.

I think the avg placement salaries are bothering me along with possibly missing out on the 'iim' brand.

IMI avg : 9.89 lakhs, pctile : 94
IMT avg placement: 12 lakhs, pctile 95
Mdi/SPJain avg placement: 12.5/13.5 lakhs, pctile 96-97 (spjain pays more attention to work ex)
IIM I/K/L: 15 lakhs pctile 98-99
IIM A/B/C: 17.5 lakhs pctile 99 (iim b pays attention to workex)

I gotta take a break of some sort to get my mind off the CAT.

U.S bailout package

2008-11-18T01:46:00.000-08:00

Keep an eye on news about the U.S 700 billion dollar relief/bailout package.
I have a hunch that some news on this front will will seal the lows for 2008.

Raja vs Cat 2008

2008-11-16T07:11:00.000-08:00

According to CL:
For atleast one IIM call:
QA:30
LRDI:26
EU:44
Overall cut-off:120

CAT 08
Name : RAJA  Booklet No.: 222
Total Attempts: 55  Total Correct : 37
QA  LRDI  EU  Total
29  45  56  130.0

Cutoff i.e 97.5 ish percenile 120-125
130 is probably around 98-98.5 percentile..
99 would have been nicer but oh well

Anyway this is all theoretical: final results sometime in Jan: Still going to need some serious luck to get an IIM (A/B/C) Call. Most likely will get calls from some one/2 of iim i/k/l and mdi/spjain/imt/imi.

http://time4education.com/cat2008/catanalysis_home.asp
http://edutalkindia.blogspot.com/2007/07/mba-cutoff-through-cat-score.html

I love the comment by Time4education:The set on ‘Share prices’ would have stumped anyone who dared to get into it.

The set involved analyzing intraday trading strategies of some fictitious characters and figuring out
a) who made profits if prices did xyz
b) what prices did based on which fictitious character's strategy made profits
Guess how I did on that set :D

Rcom might move up

2008-11-06T20:46:00.000-08:00

Pure hunch support 220-215.
Can touch 260-270

UPDATE: target 251.. 260-270 area bonus.
res levels on fib 231/237/242/249

Old short tatapower

2008-11-05T09:55:00.000-08:00

Short tatapower again. It hit the final target of 520 ish last time on the way down.
Now Tatapower has res at 777-800, sl 800/820/864. Bearish trend on eod ends only on a close above 864, basically its not gonna happen anytime soon. So I suspect its time to sell this rally.
short for 724-699-687-656-640-625
If 525 old low breaks tatapower could test 480-430 region, but that will probably only happen in a panicky market and no real signs of that yet.
U.S Market is already down so tomorrow will be a gap down. I actually gave the short call on tatapower and rel today intraday around 760 but you can play your own levels.

Corrrection soon

2008-11-04T21:55:00.000-08:00

Can't give the exact top, just look for a top on hourly charts.
Target 3000-2950-2900-2850
Major res at 3260
then at 3565-3640
problem with shorting up here is if you short too early you get stopped out
and then miss the real move down. so one can wait for hourly charts to confirm a top and then trade the charts with the proper stops

Market bottom done for now?

2008-11-01T06:00:00.000-07:00

Look for inv hns and breakout setups on stocks this month.
Already gave hdil earlier it moved up early.
Its still 140+ but consolidating 148-156. Should touch 176 soon.
Next week more short covering in banks and realty since rbi just cut rates.

I will start posting bullish setups for nov/dec when I start seeing them. ex this punter lightweight stock coreprotec just blasted 20-40% in one day... Basically whatever breaks has to be bought now. Shorts are in trouble, squeeze the life out of them. Doesn't matter if its a punter who is short or if its a silly FII/hedge fund.

Bears will keep predicting 2100; they were right about 3600 and 2600 even 2300 but can we go lower?? Select stocks did touch nifty 2k equivalent lows, hell some stocks even went down to 2004 bull market lows. So yes the market is erratic but just because the indiv stocks went down doesn't mean the index will go down all the way..
Thats part of the beauty of diversification :)!

My favorite pick for the next bull market=RELinfra and second in line is rcom.
Rel moved up from 360-460 not bad right? but wait for 520-600-660 much more left.
Sure there will be more dips along the way but every dip is a buy in RELinfra.
Ex. Rel if it dips now on eod , lets say it goes to 520-660 and then dips. 99% chance in my view of a higher low, then u have inv hns and then you get explosion up later..... So basically bottom is done. If you wanna fight it be my guest.
Rcom will post chart soon when I see the setup. Might have a minor breakout above 227 but tough res near 234-244, then 260-270. Not sure if it will react harshly from 234 and then do the higher low so rcom is riskier. Results were damn good. profit growth vs expected drop. RCOm is trading near a p.e of 16, for a company thats gonna grow at 16-20-40% thats damn cheap.

CAT is on the 16th, 2 more weeks of studying then I'll get back to coding some really new and cool stuff :). Right now pretty erratic on the trading side.
I'm practicing with the old CATs. My scores have improved slighlty, I think I'm pretty close to the 99pctile mark in both GMAT and CAT now.

I took the Cat 2007: Got 128 vs around a required score of 100-120 for 1-6 iim calls
2005 cat: Got 64 vs 49 for IIM calls
Now I just need to get a 99pctile in the actual 2008 CAT.
Gotta work a bit more on my Quant/DI skills.
Anyway I think I really should make it into atleast MDI if not IIM. + I would be more comfy at MDI, its right here in Delhi . I'd like to clear the cutoff for IIM mostly for the bragging rights :).

REL 360 wolfe wave buy, target 500 , picture later, cmp 373

2008-10-26T22:41:00.000-07:00

Keep in mind wolfe alone is not that powerful.
u need a level
360 is 3 year rel low.

Nifty 2304-2314 is late 2005 low
early 2005 low 2000-1950 area nifty
we wanna be long now
for atleast 3000-3600-3800
depending on timeframe

Titan double top target 680-572-543 weak below 930

2008-10-24T07:27:00.000-07:00

Titan weak below 937 and 900 can touch 695-572
Results already out, nothing can save it, except a move above 1020

SBI HNS

2008-10-23T08:52:00.000-07:00

Old hns big picture 1622-1562 broken supports
got retested now smaller picture hns breaks below 1368
Refer to old post:
http://fnocharts.blogspot.com/2008/06/just-charts-part-ii.html

Momentum will increase only below 1295
targets 1231-1165-1147-1100
panic low of july 1000 area ultimate target

P.S: Mind you I am bullish nifty 2950/2800/2600
These are humongous supports for nifty and we could get a 20-30% rally, I am bearish on sbi/tatapower.
Just be careful because a 'rising tide lifts all boats' to some extent anyway :)
2 more candidates for late lateef tops=hll/itc will post pics later.

Tatapower futures triangle upper TL res @ 800

2008-10-21T02:31:00.001-07:00

HNS TARGET is around 620-560
old consolidations 660,570,508 (if tatapower had been trashed like nifty or rel it would be closer to 500 right now.

watch the res near 790-800 from the upper end of the triangle
Follow the technical levels
triangular action res: 800
my targets 670-600-550

tatapower p.e 20 ish
REL p.e 12 ish
tatapower bv: 426 ish
rel bv: 477
rel cmp 505
tatapower 790

i think the two will converge. only caveat: remember the saying the market can remain irrational longer than you can remain solvent.

Last excuse to short: bearish wolfe wave , though not a perfect one
Wolfe would predict a very sharp decline to 480 ish

Update:
Triangle developing as expected abcde all done now for breakout below 695-670 area
that will open up the targets of 567-565 and 527 (which is this triangle's technical target)

HDIL no idea about fundas but its breaking up.

2008-10-21T02:09:00.000-07:00

technical breakout above 140/148
follow the action around 140-148 and try to play long.

looking for 175
HDIL, :17/10/08
Close: 125.65
T1: 136.158 T2: 157.707
T3: 192.865 1xR: 178.5
Tech Target: 190
Narrowsl: 101.00
WideSl: 76.97
SwingHigh: 139.8 CMP: 125.7
SwingLow: 89.5 SLPivot: 101.0
ImpulseTargetZone : 214.4-249.6
Lower Chan: 104.099 Upper Chan: 154.394
SupportLine: 104.099 ResLine: 126.799

Hindalco

2008-10-21T02:08:00.001-07:00

4x earnings
birla group
book value 140
buy at 60-70 target 140 in 2-3 years
and maybe 200-210 in 5 if we get a boom in metals that early.

REL:Another large cap at book value: 477

2008-10-21T02:04:00.000-07:00

Book value 477
Few years ago this stock formed a major bottom (All time low 360)
also happened to be near its book value at that time.

Granted fundas don't always work but they're much more likely to work with large caps than with mid/small caps.

rel eps=42
rock bottom valuations 420
as far as i know rel is flush with cash.

UMPP will require more cash but they've already done the rpower ipo for that so i'm guessing there is atleast a decent amount of cash with ambanis to execute a few power projects.

REL should head to 1000-2000 within 3-5 years

Nifty big Big levels, this is where you build up your portfolio for the next 5 years.

2008-10-13T09:09:00.001-07:00

Expect broken support 3800 area to be retested if 3200-3000 holds.
Probably gonna tank once from there, so look for a short setup near 3800. If u.s goes through with the bailout then we might just rally through 3800 but otherwise I suspect it will give good res.

As for the longer term bull perspective
You can place your 1-2-3-4 wherever you like.
Just check the elliot osc, read up on bill will/aget etc. the basic idea is if elliot osc is pulling back to 0 line, then assume w4. If you have divergence and a lower high in elliot osc + a drop then w5 is over.

Simple stuff:
1-2, 3 big wave,
4th consolidation.....
but the 4th must end above wave 1 top...
Thats the key. w1 top = 2000/2004 highs near 2000-2100 nifty.

Fundamentally p.e of 10 for the stock market is pretty much the ground floor for large caps. (trailing 10x = 2250, forward 10x =2600 ish)
I already went all in on friday so I do have a bullish bias.
Some fresh FDs will mature in july or so , so until then I got nothing to do in the market.

Still studying for the CAT.
Still don't have that perfect 6pack..
I think I'll bulk up a bit more then cut back to get a lean muscular look.
Right now 1 rep max on the bench is 200 pounds, Goal is to take that up to 300.
http://www.ncbi.nlm.nih.gov/pubmed/12859029
My BMI is around 22, optimal bmi for my age group is 21.6. So I don't wanna drop too much weight, just wanna drop a bit of fat and replace it with muscle.
Might take a year or 2 to get in perfect shape.

Even my portfolio is a little chubby right now. I have way too much rcom. avg price 400 need to book half in a rally and diversify. The gap down 480 area is mega res and should hold in most rallies.

It might also take the market a year or 2 to get up to any real levels where people like me can earn a profit (I've made 2 major investments this year 4600 and 3200.., now I can't really buy any more and I sure as hell am not selling at a loss considering I am only 27. I can wait as long as it takes. In the long run I'll still outperform FDS.)

Favorite sectors: power, pharma, telecom, metals
If I can free up some more cash will buy REL
on friday I bought rcom/tisco/ranbaxy.

Mega cap at book value??

2008-10-09T23:17:00.000-07:00

Tisco book value 300
I just bought @ 310.
eps around 64-70.
few years ago eps was as low as 40-50
Anyway
http://in.biz.yahoo.com/081009/203/6yfu1.html
arcelor expects ok numbers.
I don't and the market doesn't..
Steel stocks have crashed. More price drops to come but I think that tisco's profitability will go back to pre bull market levels..
Last time tisco was at 300 was when I started trading..
2004 ish.
So I think I'll just hold for 3-5 years and exit at a p.e of 10 around lets say 800-1000 rs.

Keep in mind bear markets are sharp violent affairs. especially near the end of local waves. I'm not saying nifty is done tanking but such a violent spike could lead to a profit taking/pullback rally maybe a consolidation between 3000-3600-3800. If we had held 3800 then 5k would have been my jan target but since we broke that. Jan target is around 4400 now.

Nifty strong support at 3300-3000-2800-2600
2600=ground floor
eps of nifty = 225
If anyone has estimates for fy2009 nifty/sensex earnings estimates, then please do leave a comment.
old estimates for nifty earnings would have been 20% eps growth
so 270 eps. or 2700 ground floor
but fresh estimates might be lower around 250-260?? I really don't know.
But if I had to pick an area then the break all your bank deposits and buy nifty
region would be 2300-2700.
10 times forward earnings (since current yield on a fixed deposit is around 10%)
(I still have some fds... all fds start getting broken if we touch 2800-2600 and 2300)

Market might touch 3900 in a panic

2008-08-25T10:43:00.000-07:00

I have this weird hunch that 3900 will be retested.
Target for next bull market is 8-10k nifty.
almost 9 months done, maybe 3-9 months left in this bear market.

Still studying for the CAT so don't have much time to trade or post.
scoring around 80/300, 40/75 attempts, 60% accuracy.
and this is around 95th percentile...
need to get to around 100/300 to get into the 98-99 % area.
That should be good enough for iim/fms/mdi.

Data Services for traders

2008-08-16T04:46:00.000-07:00

Head over to http://niftytraders.blogspot.com
Cheap, affordable data services for traders!

Very high probability of a bottom at 3824

2008-07-16T22:34:00.000-07:00

3824 very very imp support also rising channel area 3900
keep an eye on these levels.
My view is bottom has been formed.

I've been out for a while, will probably be missing for a bit longer.
gotta study for the CAT
the interesting thing about the CAT is , just like the stock market u don't have to be 70-100% right to be the best.
a raw score of 50% on the cat will probably land you in the top 0.5% in India

The longer term rising trend channel

2008-06-24T23:37:00.000-07:00

Lets hope this is only a Wave IV...
Even if it isn't and its a much bigger corrective wave.
Then we can hold this channel area and rally; maybe an x wave before more downside.

Look to buy

2008-06-22T23:32:00.000-07:00

Buy nf 4260 sl below 4210
support is 4230 ish
Target is gap fill 4540-4580.
Source based + charts indicate very strong support at 4240-4230

Nifty downside targets if we sustain under 4430

2008-06-21T07:47:00.000-07:00

Just targets for bears who were crazy enuff to hold their shorts below 4430.
4380-4240-4230-4189-4111-4063-3956-3900
3900-4000 is probably the next area where one would try counter trend long.
anything higher is significantly more risky.

Bulls might do best to take a break from the markets until we get some stability.

Short nifty on rallies

2008-06-18T02:35:00.000-07:00

res 4640-4670 sl 4680
target 4530-4430
missed the early morning short...
The high of course was a fib level 4680.
Mentioned in previous post.

Right now intra 4565 nf support/4583 ish spot
gonna try to bounce from there get a lower hourly high then disaster for bulls.

Last few days the automated short setup didn't trigger. finally triggered today.
STOCK : S&P CNX NIFTY

Sell v4633.46, SL :4682.48, Tgt:4498.96
lets see if this one finally works out.
This is the machine.. not man :)
anyway its only 50% ish accurate.

Chess and markets

2008-06-17T10:33:00.001-07:00

http://www.global-derivatives.com/download/files.php?func=download&id=129 http://www.cs.vu.nl/~aske/db.html
http://www.chesscorner.com/games/deepblue/deepblu.htm

http://www.chess-analysis.com/chess-software/deep-blue.html

Do you think you could beat deep blue? or for that matter even some simple grandmaster level chess program?
What % of humans can beat a pc at chess?
What % of humans can beat a pc at trading?

Leave a comment.

Timepass predictions

2008-06-16T10:24:00.000-07:00

Important warning. I never trade pure predictions.
Entry/sl has to come from intraday structure.
REsistance 4610-4640-4680 will hold
target 4430

support 4400-4430 will hold target 4720-4770
resistance 4770 will holdtarget 4480
market expire within 4400-4800 range most likely right in the middle 4600 ish.

Its just a script. we'll score it on the basis of number of turning points hit after one month.

Res Levels

2008-06-16T07:25:00.000-07:00

Short setups for bears
levels 4610-4620 gap fill area
next old high that gave res 4710-4720 area.
Today tried short but the damn bulls didn't give up intraday and held their gap ups.
Tomorrow most likely gap down.

Support remains 4430-4500 area.
we had a good bounce from sub 4430 levels which to me is a good sign.
We might just have done the bottom. vertically anyway.
Now for the horizontal part.
Refer to old post on channel lines.
We have hit one channel line , still have to hit the wider uptrend channels.
Best case for bulls 4430-4470 gets retested and is held.
Worst case 4000 area etc is still a possibility

stocks worth investing in
LT/bhel , capital goods 25-30% cagr, bhel near 25x trailing good value. lt dunno p.e but it has wierder valuations anyway. always read a few funda reports before buying in delivery.

Midcap space i like indiabulls and idfc.
buy in declines.
Both can double in a few years.
30-50% cagr for these two is possible.

Infy double top+wolfe wave tgt 1700 below 1850 sl 1920/2000

2008-06-09T22:46:00.000-07:00

Timepass trading

2008-06-09T12:35:00.001-07:00

Check out http://www.gcitrading.com/
you get a cfd/share trading demo totally free for 30 days. anyway fun part is live rates and trading practice! Sophisticated traders might actually want to consider a full fledged account so they can hedge their positions in the indian market against just about anything!!
commodities? exchange rates? global markets?
If you guys know of any other such international brokers who will let one trade in a wide range of instruments leave a comment.
I didn't fully understand the interest cost in gcitrading , it was only levied on crude positions and not on other positions.

What i really want to do is get a full fledged automated trading account.
put in 10 lakhs in it. And double my capital every year :D.
I know I have the skills to write the code for trading systems which can do this even after accounting for ridiculously high slippage and poor execution.
What I seem to be lacking is the discipline to follow my own systems at times.

ex. on friday i had 3 short setups ntpc/jpassociates/relcap i took only one...
needless to say didn't make much.

Market morning call

2008-06-08T19:29:00.000-07:00

http://stquote.sgx.com/live/dt/DTFuture.asp?INFE
http://finance.yahoo.com/intlindices?e=asia

I believe today's gap down will be retested on wednesday morning most likely with a gap up.

Random conversation, people will keep asking me the levels so i figured i'd post it in one place.

2008-06-08T07:30:00.000-07:00

[15:23] rajak1981: S&P CNX NIFTY, :6/6/2008 2:53:59 PM
Close: 4656.65
T1: 4494.33 T2: 4341.83
T3: 4093.01 1xR: 4330.55
Tech Target: 4117.5
Narrowsl: 4,743.15
WideSl: 4,871.06
SwingHigh: 4,956.2 Stoploss: 4,743.1
SwingLow: 4,536.9 CMP: 4,656.6
ImpulseTargetZone :3940.5-3691.68
Lower Chan: 4498.66 Upper Chan: 4720.05
SupportLine: 4720.05 ResLine: 4485.04
2xAtr14Stop: 98.3549
TrailingSL: 4,714.85
[15:23] rajak1981: buy at t1
[15:23] rajak1981: buy at t2
[15:24] rajak1981: buy at t3
[15:24] rajak1981: investing perspective
[15:24] rajak1981: trading can short for the targets from 4540 region , don't short the gap down
[15:24] rajak1981: most bullish case which bears cannot see right now
[15:24] rajak1981: is 4494-4500 area holding out
[15:24] rajak1981: i.e no new lows
[15:24] rajak1981: most bearish case which bulls will not see right now
[15:24] rajak1981: is all the way till 3600
[15:25] rajak1981: i'd say consensus is 4000k area could be tested

my view?? 33% t1, 33%t2, 33%t3
all equally likely.

Just another manic monday??

2008-06-06T08:27:00.000-07:00

Monday looks like a mega mega gap down since dow jones is down.
contrarian call buy 4600 call target 100-120-160
for june
so the buy zone has to be 50-60-80 max
sl = 0 target double/tripple
buy 2-3 lots sell half at double , sell full at tripple

hedge for 4600 call long = 4800 call short if/when the 4600 call moves into profits.
try to sell 4800 call for around 30 or try to sell the 4750 call option for 50.

forming an intermediate bottom can be a painful exercise, will take a while.
If you get a gap down on monday take profits on all shorts.
For friday I had reccomended short relcap/ntpc, did try trading nf long but got stopped out for a loss of 10 pts.

If you want to be on the intraday call list on yahoo my id is rajak1981@yahoo.com
you need to be online to receive msgs.

Nifty in a triangle?? no new lows? will 4440 hold?? or will we do a wave C carnage till 4000-3600 nifty?

2008-06-04T04:21:00.001-07:00

Title says it all.
Bought indiabulls/bhel/bel/albk today.
Had moved into 50% cash earlier, now only 25% cash.
My reccomendation to everyone is start buying around 4560-4507 invest 33% now
33% if a 5% drop comes and final 33% if another 5% drop comes. so @ 4000 ish one should be fully invested
4500-4250-4000

Aggresive strategy is 50% @ 4560 ish then 50% at 4250
In both strategies if market does not go below your buy price and confirms an eod bottom then remaining capital can be deployed on the way up!

Only mega bears will be talking of nifty 3600 but hey anything is possible :).

Just charts part II

2008-06-02T10:19:00.001-07:00

Old Trade setup that HIT EVERY SINGLE TARGET!! SBI SHORT!!
when it broke below 1585 ish

Note if you can't figure out how to trade this chart
then i would suggest reading martin pring+bullkowski.
All patterns come with targets/stoplosses.
So here we go, pattern of the day head and shoulders :)

Just charts

2008-05-26T10:52:00.001-07:00

A picture is worth a thousand words.
So I'm going to post a few pictures which look interesting to me.

Time pass reverse engineering trading systems

2008-05-26T10:19:00.001-07:00

Here is one of my hobbies.
Figuring out code given a set of trading signals

Check out trendrider original+ my replica

and eageleye trading system+my replica.

I think 1-2 signals might be off by just a bit. but the general concept is captured i think.

Now i know this isn't challenging stuff... I've actually been meaning to code mt pred replica and t3 fibs replica.
I am just being ridiculously ridiculously lazy thats all.
I can see 100% of the code for mtpred in my head and maybe 90% of t3fibs....
one of these days, i'll finish it all :)..................!!!!

trend rider apparently sells for 31k per year though i can't see why in gods name its worth even 1 rupee
no idea of eagleeye pricing.

Mt pred=1 lakh per copy, t3 fibs 4 lakhs per copy
Of course in India, nothing sells only pirated copies galore :)
I guess thats one of the reasons I am not too motivated. Even if I code all this stuff it'll be a major headache to market it.

The longer term bull case

2008-05-24T23:49:00.000-07:00

Buy any dips to lower channel on the weekly charts.
Marked as green/light blue in this chart.
The primary support levels for the wIV are
33-38.2-50% retracement levels
which read 4680/4430/3930 on my charts
so basically 4.4k-4k massive buy area
sl 62% at 3.6k or the old low at 3.5k
which is like 12k sensex?
target will be 8k/10k/15k nifty for the wV when it comes

This dip is going to be the investment opportunity of a lifetime....
So while traders will try to trade it short
Investors should try to accumulate good shares at bargain valuations.

The Bear Case

2008-05-24T22:43:00.001-07:00

Bulls: Banks+Realty

2008-04-29T20:28:00.000-07:00

Go long on realty/banks
Worst of the subprime crisis and interest rate/inflations fears are already PRICED In. A few crr hikes here and there won't really kill the liquidity entirely and the impact on banks' net interest margins is expected to be around 6bp (emkay report).

So there is only one way to go: up
funda picks albk 84-170
axis bank 944-1200
boi 333-425
icicibank 901-1600
uinon bank 163-240

Rbi meeting is done and we got a nice breakout yesterday in bank nifty and bse realty.
Watch for breakouts some have happened some will happen soon
bank nifty is still 40% below the all time highs!! within 1, 2 years max those highs will most likely get tested again.
Short term even if its a pullback 50-62% retrace of the entire fall is easy. stronger banks have have already done those pullbacks.

Realty : hdil, omaxe, purvankara, ivrprime.
Short term 10-20% easy on breakouts. for investors maybe even 100% with a 2-3 year timeframe.
Most of these stocks are trading around 50% of nav based on funda reports which I saw in feb. Will post details if I get time later.

Simply don't have a lot of time these days
Trading takes up 6 hours
trading prep takes up 1 hour
gym takes 2 hours
cat prep is another 2 hours
and I'm also supposed to squeeze in 1-2 hours of cardio which hasn't been working out lately.

6 pack is not quite done. It'll take a lot longer to get all the way up to a Hrithik Roshan standard six pack. If I wanna go the SK way then I guess I just gotta drop another 5 kilos, but I'm not a big fan of the ESP look (emaciated six pack)

Secret to Trading/Investing

2008-02-13T09:15:00.000-08:00

One word
Discipline.
This is for the guys. This market is going to remain choppy.

If you're too addicted to trading take a break!! If this really is a w4 on monthly then any trend following system is going to get slaughtered over the next 6 months.
So for all adrenaline junkies I would suggest finding something else too get rid of the adrenaline addiction.

Here's my latest pastime.
http://www.iwantsixpackabs.com/home_my_story.html
http://www.wikihow.com/Get-Six-Pack-Abs
Currently up to a 4 pack from a 2pack.
6 pack in another 8-10 weeks.
We all know we can have a gr8 body if we eat healthy and exercise. How many of us do?
We all know that the key to trading is to cut losses and let profits run. How many of us manage to do that?

Its all about discipline. I wasn't even trading in the drop from 6.4k-4600 and my portfolio lost nearly 50% because I didn't take profits at the right time. Luckily for me I had a fresh infusion of funds near nifty 5k so I've just bought a lot more stuff near 5k. Now I get to hold. Even if this market goes down. The strategy is simply to hold the delivery positions.

I'm invested right now, not excessively leveraged around 1.2x. can take a drawdown till 3k nifty.
might have to break a fixed deposit if we go under there. Not seeing any such trouble just yet.
Now I just gotta hang on. Thats the discipline part. I've made some investments which I believe are made at bargain prices and there is nothing to do but hold.
The most important part of investing/trading is probably position sizing/risk management. When trading u gotta worry about where your stoploss is and figure out the right size of your position based on % risk to capital.
With investment usually the risk is 100% on every position. i.e stoploss is 0.
So if sl is 0 and you wanna manage risk, try not to invest >10% of equity in one stock.
If a stock moves too far up compared to the rest of your portfolio you get to take profits and invest in something new.

For now I am trading tiny positions. Will resume trading bigger positions as soon as I see some profits on those delivery positions and I see some stability in this market.

If trading I would stick with the brokers/telecom/power/punterstocks in bull moves because this market seems to be lacking breadth. relcap showed gr8 strength past few days. Rcom/bharti might outperform going forward.
550-600 is a good investment area for rcom for a target of 950 in 1 year. (Merryl Lynch)

Bears Be careful

2008-02-08T21:39:00.001-08:00

One of the great rules of trading based on trend following.
Don't sell short or go long into a major moving average.
i.e do not mess with the trend.
5k area is the domain of the bulls. thats the 200 dma area.
We're going to be buying :)
I know I am
5000 calls
and maybe some investments in midcaps near a p.e of 5
I like Patni. Some news of a buyback as well, the book value is around 211 which is also around the recent low that the stock made in jan/feb.

What amazes me about this market is that on the one hand people worry about a recession and on the other hand you got metals trading at a p.e of 10 while gr8 companies with solid cash flows are trading at a p.e of 5 or lower and some stocks are even lower than book value.

Wouldn't mind picking up something in the metal space if I see a p.e of 5.

Possible w4 on monthly

2008-02-08T07:29:00.000-08:00

W4 on monthly
6 months of consolidation
expected damage was 20% from the highs min, max 35%

that is 5100-4200 roughly.
anyway 5000-5100 200 dma area invest.
Lots of stock available at garbage rates
like p.e of 3-5
at or below book value especially in the midcap space.

after this six month consolidation, the target of 15,000 nifty and sensex 50,000 will open up. Will post the chart when the target is visible.
Only traders who have the stomach for volatility should even bother trading this market.

Previous post was 5k support 6k res.
6k held gave 5.4k then 6.4k was hit
next 5k broke and 4.5k ish came.
Basically we're in this 5k-6k band for the next 5-6 months.

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

2007-12-30T09:25:00.000-08:00

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

2007-11-09T22:30:00.000-08:00

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

2007-11-08T02:12:00.001-08:00

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

2007-11-07T23:21:00.001-08:00

Looking to buy there.
hedge for bulls is ster

Looking to buy, pure timing no levels

2007-11-07T19:10:00.000-08:00

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

2007-11-01T03:26:00.001-07:00

Success=Work+Play+shut up

Source: Einstein.

Market can go higher if bulls hold 5800

2007-10-31T20:45:00.000-07:00

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

2007-10-28T23:42:00.000-07:00

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

2007-10-25T22:03:00.000-07:00

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!!

2007-10-20T23:34:00.000-07:00

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.

2007-07-28T08:14:00.001-07:00

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

2007-07-19T05:59:00.001-07:00

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.

Cryptic clues

2007-07-17T01:09:00.000-07:00

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

Another Trading system for sale (whitebox with code)

2007-07-13T12:21:00.001-07:00

This equity curve is over a period of maybe 7 months or so.
In 6 months 10 lakhs could become 30+ lakhs. Lets say that actual trading is not as successful. Lets use my favorite technique. Divide theoretical profits into 1/2 and double/tripple theoretical drawdowns. Still I would say this system could easily convert 10 lakhs into 15-20 lakh rs in one year with a risk of 1-2 lakh rs.
Assumption is that the system continues to work in the future atleast 1/4th-1/8th as well as it has in the past.

I would price this at around 1,00,000 Rs per copy (with full source code! no hidden stuff/tricks) with 2 years of technical support.
Once you have the code you can always modify the system to suit your needs as you see fit.
The other option for purchasing this system will be through a chat room of some sort, maybe 5000 rs a month. Anyone who trades with me for 3 years... thats 1.8 lakh rs; would get a copy of the code and be able to own the system as well.

I ran a survey a while ago in my yahoo group , 1 year ago maybe?
Fishing rod or fishes? Most people voted for fishes rather than the fishing rod.
However I'm going to cut a good deal. Buy the fish for 3 years and you get the fishing rod free! OR if you can afford it buy the fishing rod itself.

Note: All testing on intraday data is above 200 sma mostly on nifty, i.e bull market.
However the fun part is the system can really short fno stocks!! More profits from shorting than going long!! So in my view the system is balanced and useful.
Once I am in India I'll purchase all tick data from nse for 10k and do a more thorough test.

One of the keys of this system is scalability.. It can be scaled up to max leverage i.e 16%-10% margin or so and still seems to work ok.
Also none of the parameters have been optimized except the stoplosses and profit targets. Even then the optimization is on the entire fno series/long/short! Plus the optimization was done last year and the tests have been done this year on up/down/sideways. So the tested sample is not overlapping with the development sample and the finished system is tested in a wide range of conditions. Just check last 7 months of action!! Any issues? Trend/sideways? down back up?

Before you decide to spend the money. Look around for stuff on trading systems vs discretionary trading etc. Also figure out if you have the discipline to follow a system which is 50% accurate and is telling you to go both long and short as much as possible!
http://www.futuresexaminer.com/aboutTS.php

I would suggest people try to trade with me for a few months (using the paid chatroom) when I am in India and then if they find real world performance acceptable , buy the full code so it can be understood/improved. I haven't been running any kind of chatroom service because right now I am in Germany and I'm not always up on time. That should change shortly.

The chatroom+sales for this system will begin when I am in India. The next big system I do publish will be based on gas/nns/fibconfluence/pattern detection.

Read this.
http://www.jurikres.com/snake/main_oil.htm#top
Then email jurik and ask them, why sell indicators if those indicators can't be used in trading systems/rule based trading to work??

Quotes

2007-07-06T12:19:00.000-07:00

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

Random Quotes

2007-07-02T18:11:00.000-07:00

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

2007-06-26T04:23:00.001-07:00

"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

2007-06-24T19:06:00.000-07:00

//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

2007-06-19T11:05:00.000-07:00

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

2007-06-19T01:14:00.000-07:00

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

2007-06-17T18:06:00.000-07:00

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

2007-06-15T11:18:00.000-07:00

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

2007-06-14T08:42:00.001-07:00

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 :)

2007-06-13T10:10:00.000-07:00

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

2007-06-13T09:13:00.001-07:00

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

2007-06-13T03:41:00.000-07:00

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

Buffet vs Raja on derivatives

2007-06-09T04:51:00.001-07:00

Posted over at 'traderji'
http://www.traderji.com/derivatives/12989-buffett-derivatives-fools-game.html#post95075

Re: Buffett On Derivatives: 'A Fool's Game'

I like to debate, its fun. The more knowledge one has on a subject the more one can speak on it. Having a view is not a crime even if it is in disagreement with a legend of investing.
For without debate you have no progress or reform.

--------------------------------------------------------------------------------
"The introduction of derivatives has totally made any regulation of margin requirements a joke," said Mr. Buffett, referring to the U.S. government's rules limiting the amount of borrowed money an investor can apply to each trade. "I believe we may not know where exactly the danger begins and at what point it becomes a super danger. We don't know when it will end precisely, but...at some point some very unpleasant things will happen in markets."
Best summarized as a paranoid statement.

Leverage or borrowing is a double edged sword
Those who don't know how to wield it cut themselves.
They don't really cut up the system.
You do know why right??
Derivatives don't come out of thin air
There is a counter party/stabilizing influence who has the opportunity to take profits
Don't believe me??
run an analysis of smoothness of trend of fno stocks vs eod trading punter stocks.
Fno stocks there are more buyer/sellers/liquid moves less spikes.

Short selling adds to stability of the markets.
The professional derivatives trader usually is both borrowing and lending..
he might be intraday short on something that is correcting/declining/downtrending or just pulling back and eod long from a positional perspective.
Not all people are crazy and go 100% long with 10x leverage.
Those who do go 10-20-100x leveraged in one direction usually end up cutting themselves so deeply that they never recover. Infact they are out of the game so quickly before the market can even move that the impact on the market is near 0. reason a 5-10% move in spot will kill a derivatives trader who is 10-20 x long.
The weak members of the herd are culled through natural selection.
Buffet need not worry.
Natural selection has worked for millions of years , it will continue to work.

If anything a mechanism for easy borrowing/lending of money IMPROVES the 'efficiency of markets'. Any student of capm/market efficiency will know that one of the requirements for truly 'efficient markets' is the ability to borrow/lend insane amounts of money for the market to be truly efficient.

If someone borrows 10x leverage because he has no brains that is his fault
But imagine i am a sophisticated investor
i have 40 crores in the bank. 40 crores in shares
and with 20 crores i play long/short in the market.
I am not always truly borrowing from the market. I have already lent 40 crores @ 8-10% fd
the 20 crores is only subjected to exposure when a market inefficiency arises.
Sometimes i might use the 40 crores to hedge by shorting stocks i already own in cash if there is too much premium. The hedge might only be in place for a few months with a purpose of saving me brokerage/liquidity cost of entry/exit and also taxation on FULL profit vs taxation on 3-5% profit. Basically by holding my delivery position for 1 year on all occassions in good funda stocks i allow myself to fall into 0 tax bracket while still participating in market swings WITH LOW COMISSIONS AND IMPACT COST.

At other times.
I would declare my intention to buy a stock by buying a future and borrowing cash from someone @ cost of carry ideally below or at the rate of my fd. (P.S Ideal entries/rollovers are at discounts so my borrowing rate is not even as much as my earnings from fd!! though that will be tough to find in stocks. just check nifty it manages to go into discount once every month...)

IF at end of the month some punter wants to muscle me out of my position
I have 2 options..
I can a) rollover position by paying cost of carry and borrowing again
or b) convert position to cash. by either selling other shares that i own or breaking the fd!!
I may choose to continue rolling over since cost of breaking fd balances with cost of rolling over. these two are negating each other to some extent.
If my futures just never moves into a profit and my funda view is intact and my fd is now expiring
I move my fd into cash and buy the stock
or if i have profits in another stock which I can book and my funda view on new futures position is intact i can take a cash position.

Now I am long...
This is an example of how an efficient market can work successfully.
For every secnario of derivatives causing market failiure i can give u a scenario where derivatives work successfully.
Guns? weapons? legal? They can be used to kill people? or enforce the law?
Which way do u use them??
Some people might even use them to commit suicide.
Is a gun a fool's weapon?
Would there be no fools without guns?
Would people not commit suicide/crimes with knives/clubs/ropes/swords?

Buffet is old school maybe he is stuck in his times.
Maybe he never moved forward. History is full of examples of people who fail to adapt. No one is perfect. Some people survive some people go extinct. No one is a 'god'
It will be very interesting to note whether the top performing fund of the 21st century will be a hedgefund or a 'value/sip/buffet/graham type fund'
Of course if u do believe in efficient markets then u will realize that a hedge fund by nature of its existence enforces more efficient markets. i.e the more hedge funds u have the more efficient markets become and the smaller the profit of the hedge fund
So can hedge funds truly create abnormal profits ??
Interesting paradox isn't it??

P.S This is intended to be a thought provoking informative discussion
pun intended
No flame towards author of post intended. Just trying to enlighten some lost souls who do not understand derviatives.
I speak from experience when I tell you that some people will BUY A STOCK USING MARGIN AND FEEL SAFER. even though the future is available at discount...+ there is no upcoming dividend etc..
People just don't know the value of derivatives.
How many people know that buying a futures contract means borrowing from market @ coc? Thats step 1.. most rookies get it. How many people here honestly know how to avoid capital gains using derivatives and still protect profits??
Think over it.
and please by all means do flame if you like
Leave a comment here
http://fnocharts.blogspot.com

Strong stocks

2007-06-07T23:02:00.000-07:00

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

2007-06-07T10:34:00.000-07:00

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

2007-06-07T09:47:00.000-07:00

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

2007-06-07T07:28:00.001-07:00

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

2007-06-07T06:58:00.001-07:00

"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

2007-06-06T18:20:00.001-07:00

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

2007-06-06T15:18:00.001-07:00

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.

Dreams

2007-06-06T14:30:00.000-07:00

http://www.beliefnet.com/story/107/story_10799_1.html
I have only one issue with dreams.
How do u know god/angels/devil or whatever u believe in is not out there to teach u a lesson :)
like herohonda
After i bought hero at 686+ and saw it plummet i had this thought. looks like a triangle. what if the lesson is to buy patiently in the center of the trend but by then it was too late :).
Lesson learned: triangle expired it hit target. but the initial discount held almost until last day of expiry
744.5 was achieved vs target zone of 720-750.
Which is why in srf.
the patient buying area is 162-160-155 sl 150
the aggressive buying is above 176. the target 200-220 is intact till 150 is being held.
I will not advise anyone to buy aggressively :D
The levels i sent 2 days ago suggested buying near 160 or up to 165 highest based on support from intraday gap up.
sl narrow 159 wide 155 , ultra wide 150/144 (if you are investor)

"The idea that God speaks to us through our dreams is powerfully conveyed in the Old Testament story of Jacob and the ladder; in it, Jacob dreamed of a ladder reaching up into heaven, with angels ascending and descending. It is a beautiful metaphor of the way dreams are a bridge between worlds. In their prayers, students of the Sufi Order invoke the "spirit of guidance," who embodies the wisdom of all the illuminated souls. Thus, like winged messengers, our dreams take flight at night to the universal source of divine knowledge, returning like angels with advice to help guide us through the labyrinthine confusions of everyday life.
This was a well-known secret to the shamans of Paleolithic cultures, who turned to their dreams to get guidance on the next day's hunt. Both the Greeks and Egyptians made pilgrimages to sacred dream sanctuaries, where they sought visitation from a god in a dream to cure their illnesses through the practice of "dream incubation." The ancient Egyptians, for instance, worshipped Serapis, the god of Dreams, and built temples devoted to his worship. In Greece, dream interpretation was considered one of the "important signs of civilization" and dream incubation became a highly developed art. People traveled from around the world to visit the famous shrines dedicated to the god of healing, Aesculapius, where they underwent elaborate purification ceremonies before sleeping in the god's temple.
"

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

2007-06-06T13:14:00.000-07:00

"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.

2007-06-06T12:39:00.001-07:00

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

Conversation

2007-06-06T11:53:00.000-07:00

Raja (6/5/2007 11:07:11 AM): 4295+? or not?
buffet of bombay (6/5/2007 11:20:03 AM): 4308 test karega kal
Raja (6/5/2007 11:20:26 AM): ok
Raja (6/5/2007 11:20:31 AM): are u long?

buffet of bombay (6/5/2007 11:25:50 AM): do u think nifty can be sold around 4310-4315
Raja (6/5/2007 11:26:01 AM): if u get lucky maybe
Raja (6/5/2007 11:26:05 AM): i got severe res 4285-4295
Raja (6/5/2007 11:26:11 AM): and i am quite confused
Raja (6/5/2007 11:26:16 AM): see i had a weird dream
buffet of bombay (6/5/2007 11:26:21 AM): bcoz we know this distribution
Raja (6/5/2007 11:26:25 AM): 4600-4100-4900
Raja (6/5/2007 11:26:28 AM): now the issue is
Raja (6/5/2007 11:26:31 AM): the order of the levels
Raja (6/5/2007 11:26:32 AM):
Raja (6/5/2007 11:26:35 AM): what comes first
Raja (6/5/2007 11:26:44 AM): the right brain is not good at doing things in the right order
Raja (6/5/2007 11:26:48 AM): always jumbles stuff up
Raja (6/5/2007 11:27:02 AM): so the reasoning has to be worked out
buffet of bombay (6/5/2007 11:27:04 AM): even if gotta move up we need to consolidate
Raja (6/5/2007 11:27:12 AM): ya we've been consolidating plenty
Raja (6/5/2007 11:27:18 AM): and actually consolidating
Raja (6/5/2007 11:27:21 AM): with a weak bias
Raja (6/5/2007 11:27:23 AM): in A group
Raja (6/5/2007 11:27:26 AM): strong in midcaps
buffet of bombay (6/5/2007 11:27:28 AM): hmm
Raja (6/5/2007 11:27:28 AM): lots of crazy moves
buffet of bombay (6/5/2007 11:27:30 AM): true
Raja (6/5/2007 11:27:32 AM): 5-10-15%
Raja (6/5/2007 11:27:46 AM): i think a lot more money to be made in midcaps
Raja (6/5/2007 11:27:49 AM): while nifty consolidates
Raja (6/5/2007 11:27:52 AM): and prepares for 4600-4900
Raja (6/5/2007 11:27:59 AM): some midcaps are still at p.e of 3-8
Raja (6/5/2007 11:28:04 AM): silktex on cnbc yesterday
Raja (6/5/2007 11:28:05 AM): p.e of 3
Raja (6/5/2007 11:28:06 AM): eps 10
Raja (6/5/2007 11:28:08 AM): cmp 30

Raja (6/5/2007 11:49:13 AM): S&P CNX NIFTY, Analysis Date:6/5/2007 3:53:59 PM Close/cmp:4281.65
Swing : Up=Buy ( 0.600% sensitivity)
T1:4272.13 T2:4285.96
T3:4308.54 1xR:4401.45
ImpulseTargetZone:4322.38-4344.95
SwingHigh:4,325.5 CMP:4,281.6
SwingLow:4,288.8 SLPivot:4,249.5
2xAtr14Stop:39.737 Narrowsl:4,249.55 WideSl:4,202.46
TrailingSL:4,278.20
Lower Chan:4221.77 Upper Chan:4263.47
ResLine:4325.39 Pattern:
BullishABCC:1 Retracements :4325.5-4249.55 0.236:4267.47 0.382:4278.56 0.5 :4287.52 0.618:4296.49 0.764:4307.58
Raja (6/5/2007 11:49:19 AM): nifty if rally is corrective
Raja (6/5/2007 11:49:21 AM): should not cross 4308
Raja (6/5/2007 11:49:30 AM): 4285 is shorting area for bears
Raja (6/5/2007 11:49:32 AM): sl 4310
Raja (6/5/2007 11:49:49 AM): 4287 50% retrace 4296 62% retrace 0.76 retrace is a suitable stop i guess
Raja (6/5/2007 11:49:50 AM): for bears
Raja (6/5/2007 11:49:53 AM): target dunno
Raja (6/5/2007 11:49:54 AM): 4240?
Raja (6/5/2007 11:49:57 AM): 4180?
Raja (6/5/2007 11:49:59 AM): 4140?
Raja (6/5/2007 11:50:03 AM): i mean look at indiv stocks
Raja (6/5/2007 11:50:07 AM): they have come down to 21 ema etc
Raja (6/5/2007 11:50:10 AM): nifty has held strong

Raja (6/5/2007 12:12:15 PM): nifty looking just a tad tired. consider 4295 critical because if we don't get back above u have a failed break pattern
target =retest of 4180-4140 sl would be the fresh high 43xx and if u look at individual stocks lots of them have come to the center of the channels.
nifty as usual has been one of the strongest. visit http://fnocharts.blogspot.com for list of stocks to buy

6/6/2007 Nifty spot ltp 4192, nifty futures 4170

Not looking good at all. If spot breaks 4180 then Bulls will need to go sleep for a while.
Let the market find its own support.
Need a system to follow??
visit http://niftytraders.blogspot.com
second post from top.
A better version of a system based on elder's technique + ewt developed in conjunction with kamal will be released soon.

Profitability is roughly 2 times that of the 7/105 system and thats not a dream.
Thats a fact :)
These systems will only continue to function in the current cycle degree wave, as and when we end the full cycle I at a p.e of say 30-50 and begin a major bear market then the waves and internal rhythms of the market would change.

Nifty Diagnosis

2007-06-06T04:23:00.001-07:00

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

2007-06-06T04:05:00.000-07:00

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

2007-06-06T03:01:00.000-07:00

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

2007-06-05T17:07:00.000-07:00

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

2007-06-05T05:52:00.000-07:00

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

2007-06-05T03:25:00.000-07:00

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

2007-06-04T16:51:00.000-07:00

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

2007-06-04T16:30:00.000-07:00

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

2007-06-04T15:52:00.001-07:00

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

2007-06-04T15:12:00.000-07:00

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

2007-06-04T13:28:00.000-07:00

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

2007-06-04T12:46:00.000-07:00

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.
I'll probably ask you to do some task for me first.
So don't ask if you're lazy. You can just scour the web for information on your own. Spend 1-2 years and you could teach me a thing or two as well.

Hmm now i know the reason I am cranky. Its because someone
had the audacity to teach me after 2 days what I taught them...
Of course what I had taught this person was basic alexander elder. So maybe I shouldn't be upset. But it still bothers me.
The basic point was regarding timeframes.
This someone wanted to know 'the ideal timeframe'
And i told him
Step 1) find 1 timeframe that works lets say weekly
Step 2) divide by 5.. factor of 5 ( 5 days in a week, roughly 70 minutes in a day , 5 , 14 minute periods within 1 70 minute period).. so on and so forth into infinity.
I was lectured to do this after 3 days of having taught the person this. Presumably he forgot he had learned this from elder through me.

There is actually one more trick to picking the right tf.
But that is seriously proprietary.
Its connected to driving a car. I'll leave it at that.
IF someone can seriously pick out my way of picking the optimal tf from this one line, then do drop me a line. I will consider you my equal in technical analysis if you can solve the puzzle with just these few clues.

Zen update

2007-06-04T12:42:00.000-07:00

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

2007-06-01T05:40:00.000-07:00

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.