Sunday, May 31, 2009

Vakrangee Software!!!

Vakrangee Software is an Easy come Easy go pick! Why I am saying this is because the stock has some good news and the news is that TCS has approached it to work as build partner for the Passport Sewa Kendra project at a few sites. And the bad news is that the FII holding in has dropped from approx 34% as on Dec 2008 to about 16.8 % in Mar 2009!

Check the chart above the stock has been locked in upper circuit for past couple of days (news based buying!) and that too on abysmally low volumes. This can give some astounding returns but then on the flip side it can hit the down circuits with equal ease too and making exit difficult. A small exposure on dips preferably near 40/45 levels can show the 80/110 and 130 in the near future. Just to make things clear I have posted the weekly chart also below.

Remember I still stress on SMALL EXPOSURE and not suggesting this stock for trading. This would be better off if you buy and forget about it for some time rather than watching the screen daily.

Saturday, May 30, 2009

S&P 500 Views!!!

Nothing much as changed in the S&P 500 over the last one week. Infact it is as confused as the mixed signals emanating from various data sources. If one thing comes out positive then the other is just completely opposite leaving all wondering what’s exactly the Status Quo???

The chart above still has to make a lower low to confirm any bearishness. The RSI though it shows an H&S formation (yet to be confirmed) is still above 50 and shows no signs of weakness. The MACD histogram is ready to tick up! In short S&P 500 will only give directional breakout if it either breaks 950 or 870(tgts 1000 or 800) and till this happens, keep asking Quo Vadis?

Hope is the thing... By Emily Dickinson!!!

Hope is the thing...

Hope is the thing with feathers
That perches in the soul,
And sings the tune without the words,
And never stops at all,

And sweetest in the gale is heard;
And sore must be the storm
That could abash the little bird
That kept so many warm.

I've heard it in the chilliest land,
And on the strangest sea;
Yet, never, in extremity,
It asked a crumb of me.

- Emily Dickinson

BSE Sectoral WOW Gains And Relative Strength!!!

Week On Week Percentage Gain Chart;

Week On Week Relative Strength Chart;

Nifty Fifty WOW Gains And Relative Strength!!!

Week On Week Percentage Gain Chart;

Week On Week Relative Strength Chart;

%age Of NSE Stocks Above Their 20/50/200 MA's!!!

Sunday, May 24, 2009

Weekend Views On Nifty!!!

We had one of the most prolific weeks in trading history; over the week, the benchmark index gained 14.08 per cent, which is the sharpest since the week ended March 27, 1992. It has also risen for 11 consecutive weeks for the first time since August 2005. During these 11 weeks the index has gained a whopping 66.80 per cent (5,561 points) since the week ended March 6, 2009. In fact we just happened to give a new definition to Black Monday as something like Magic Monday or simply borrow the title of an old song by Bangles called “Manic Monday”! Anyway the euphoria will fade away sooner or later and once again we would go back to aligning ourselves with the global cues (enuff of decoupling for now!) the next domestic trigger for us would be THE BUDGET sometimes next month!

The Nifty chart below blasted through the 3800 resistance on what some would call The Manmohan Effect, and now staring at the over head resistance at 4650. Yes we have gone above the 200 periods MA on the weekly chart, technically a Bull market Zone. But it would be prudent to wait for perfect alignment of the MA’s to happen and that is the Price above the 20 MA and the 20 MA above the 50 MA and the 50 MA above the 200 MA!!! And like I mentioned that this was a euphoric move it would be only wise to add that a further retest of 3800 is warranted to really cement this move up.

Nothing much to add to the daily chart for now, the MA sequence I just mentioned above seems to be happening on the daily chart. Notice that the Price is above its 20 MA and 20 MA is above both the 50 and 200 MA and now the 50 MA is trying to crossover the 200 tryin2make the GOLDEN CROSS! One thing I wanted to mention that RSI the week before last was showing negative divergence; many must have traded it and lost. This only brings back to much repeated tenet that Divergences need to be confirmed by Price Action. And in this case the Confirmation would have come from decisive break of the TL and the failure to hold the previous peak marked P (remember P also stands for Patience and Patience is what you need in abundance when trading!).

If you felt left out in the recent run up, Please don’t berate your self and for heavens don’t go chasing stocks. Like I mentioned earlier we have a lot of “Reversion to the Mean” to do so you would get lot of chances to buy your favorite stocks on pullback to supports! Till then Patience is the mantra you need and what the heck having Cash in the market also makes you a market player; A Strategic Player!

Saturday, May 23, 2009

S&P 500 Views!!!

Below is the chart of S&P 500(daily) and we seemed to have closed with an Inside Day. S&P is very precariously poised. We have three multiple bottoms right at the 20 periods MA and of course at the previous resistance now turned support line. So far the only resistance we have above is at approx 946 which is also the previous top and the 200 periods MA is also aligning with it!

Speaking of supports we are at one right now. The 20 periods so far has been comforting enough. Though we have broken the very short term trendline (marked in black) but one can take solace that our LH (lower High) is yet to be confirmed by a LL (Lower Low).

As long as we stay in the blue zone, we can attempt another dig at the 200 MA but if we slip into the red zone then only solace is at 50 MA at approx 862 and below that it’s straight to 800!

Speaking Of USD And Gold!!!

Since the post before this was about the Intermarket Relationships, it only makes sense that we examine what the two most important markets are doing. Lets us first examine the USD Index.

The chart (daily) below shows that the Dollar Index has broken a key a support or lets presume its testing it thoroughly (marked in blue horizontal line)! It retested the resistance posed by the 200 periods MA and then drifted lower. There is a 20/200 bearish crossover and prices have made their way down below both the averages. Looking at the indicators below, one does get an indication that now USD might try and consolidate here to either bring down the MA’s or give a lil bounce up to catch up with em (same old principle I oft repeat in this blog “Reversion to the Mean”)!

If we take a look at the Gold chart below we find that the Daily (on the right) has reached its channel resistance and also neckline resistance (marked in dashed red line) of the almost defunct H&S. In this case also the price is way above its nearest MA’s the 20 and the 50 so a pull back (correction) or sideways consolidation is the need of the hour! The weekly chart on the right is what shows a very optimist (for the gold diggers) and a scary (for the stock guys) picture. Gold is on the verge of making an inverse H&S on the weekly! Hold your horses I JUST SAID “ON THE VERGE” only. This gets confirmed only and only if we have a decisive break above $1000 (and boy this aint easy)!

So where does this leave you? Well speaking of myself it leaves me confused and also intrigued coz the USD is at important support and Gold at important resistance. Both will either break them or just bounce back from their respective support and resistance. A lesson in Technical Analysis and Intermarket Relationship.

All in all Ashes to Ashes Dust to Dust, if the USD doesn’t get you Gold must!!!

Intermarket Relationships!!!

I'm Alive, I Believe In Everything By Lesley Choyce!!!

I'm Alive, I Believe In Everything

Self. Brotherhood. God. Zeus. Communism.
Capitalism. Buddha. Vinyl records.
Baseball. Ink. Trees. Cures for disease.
Saltwater. Literature. Walking. Waking.
Arguments. Decisions. Ambiguity. Absolutes.
Presence. Absence. Positive and Negative.
Empathy. Apathy. Sympathy and entropy.
Verbs are necessary. So are nouns.
Empty skies. Dark vacuums of night.
Visions. Revisions. Innocence.
I've seen All the empty spaces yet to be filled.
I've heard All of the sounds that will collect
at the end of the world.
And the silence that follows.

I'm alive, I believe in everything
I'm alive, I believe in it all.

Waves lapping on the shore.
Skies on fire at sunset.
Old men dancing on the streets.
Paradox and possibility.
Sense and sensibility.
Cold logic and half truth.
Final steps and first impressions.
Fools and fine intelligence.
Chaos and clean horizons.
Vague notions and concrete certainty.
Optimism in the face of adversity.

I'm alive, I believe in everything
I'm alive, I believe in it all.

Lesley Choyce

BSE Sectoral WOW Gain And Relative Strength!!!

Week On Week Percentage Gain Chart;

Week On Week Relative Strength Chart;

Nifty Fifty WOW Gains And Relative Strength!!!

Week On Week Percentage Gain Chart;

Week On Week Relative Strength Chart;

%age Of NSE Stocks Above 20/50/200 MA's!!!

Tuesday, May 19, 2009

Margin Of Safety By Seth Klarman!!!

Off late I have started to get interested in value investing! Actually reading is an old habit in the family so when it came to reading I decided why not finance (try it…it puts you to sleep in 5 minutes flat, if you aint got the stomach for it!). Anyway since I was keen on learning Value Investing and not knowing where to start I bought myself The BIBLE; Security Analysis by Graham and Dodd. Buying was the easiest thing; reading was easy too (well I can read ENGLISH), but comprehending was a wee bit (in fact a lot bit I must say) outta my league (damn should have paid attention in college!). Anyway so in my quest to enhance my knowledge I started searching for mentors (no luck so far, If you think you can help me I AM ALL (Y)EARS!) or anyone who could guide me on the correct path.

I started by writing to Sanjay Bakshi and he recommended that I read through all the Berkshire Hathaway annual reports (Warren Buffet at his BEST!). I must say it was indeed quite a recommendation coz I don’t regret what I read (half way through already) on those pages, they themselves are a treatise on Value Investing. Ok now what’s this post all about? It’s about the book by Seth Klarman called Margin of Safety. Seth Klarman who? For the ignorant (Well I was too one of ya before I came across this book), Seth A. Klarman is the President of The Baupost Group which averaged about 20% per year for 24 years with only one negative year. And why am I discussing him or his book? Well because I feel it’s a must read by anyone going on the Value Investing path, because it’s easy, concise, simple and pretty lucid. Personally I think reading this book first, would make it easier for you to understand Graham and Dodd. I am attempting to put a brief summary of the above mentioned book (please do excuse me, coz I know a noob like me, commenting on Klarman’s book is a bit to audacious!).

Well to start with Klarman also advocates what is Buffet’s Guru Mantra; “Rule #1: Don’t lose money. Rule #2: Never forgot Rule #1.” A lot of Buffetlogy quoted in the book.

Like everybody else Karman also advocates that u should do your own analysis & take what the market gives you. Don’t let the market bias influence you. There is one fundamental difference between speculators & the investors that the speculators thrive on activity while investors don’t. Klarman puts forward a nice statistic about the FII participation “from 8% in 1950 to almost 45% by 1990”. FII also needs to thrive on activity (actually if you put it loosely then FII are no more than traders) and thus have to be invested 100% all the time, any idle cash is an unwelcome sight in their books. Therefore this makes FII shortsighted in their approach. Since the FII rank themselves relatively to the index, therefore the need to be invested at all times, even if the valuations are expensive. The major difference between FII’s and the Investors is their approach to analysis, while the FII prefer Top down analysis the Investors do Bottom up analysis.

In one of the chapters he also discusses investment fads like junk bonds which are created by the market to lure the innocent investors. He says these fads will always come and go and the prudent investor needs to be wary of these exotic products.

I fear this is going to be one long post and would put many to sleep and it aint easy writing it at one go so I am going to break into three parts perhaps? A trilogy kinda thing! So till I put the second part through, why not listen to Klarman here!

How To Choose The Right Mutual Fund!!!

Many of us, who don’t like to venture on our own in the stock markets, take the easier route by investing through the mutual funds. But investing through mutual funds also requires some work. Manish Chauhan guides you through how to pick the right mutual fund through this video, enjoy

Monday, May 18, 2009

Honey We just had our FIRST UPPER CIRCUIT!!!!

History is made today at the Indian bourses when we hit the upper circuit; First time ever!!!

The markets gave resounding thumbs up to the newly elected parliament. But what next? Is it the time to jump in? Perhaps no, see what’s happened today is just one off event, sorts of celebration. Celebration of what? Celebration in anticipation of that all things good will happen henceforth!

I feel this is how the bubbles are created; nothing will change immediately with this one circuit. It just wont make any sense if you feel you have missed the bus (remember the rules about the buses if u miss one there’s always one coming around from the corner!). After today’s action or perhaps if this irrational exuberance does continue for the next couple of days, we would be back to what we call Reversion to the Mean. Yes internal factors play an important role but let us also not forget we are a part of one big family; the World! So we need to keep into mind the global cues. We have got a headstart but if the global cues aren’t supportive we might just have to follow them! This is one massive gap up we have created today; surely it would be nice seeing it get filled. Wishful thinking eh?

Sunday, May 17, 2009

Ranbaxy Views!!!

Weekend Views On Nifty!!!

One week and Nifty held to its almost 200 point range in anticipation of the election results. Well the most important event of our country has come to an end and now market will look forward to internal and external stimuli for further moves. Nothing much to add so will leave this post with a little brief.

Looking at the weekly chart above we can see that Nifty is above all its three key MA’s and staring right into historical resistance at 3775/3790 which just might be reached tomorrow in yet another GAP UP! Celebrating the clear mandate by the people. 3580/40 remains key short term supports.

Tomorrow is going to be a Day Traders day and that too for nimble fingers. In fact if intraday is not your cup of tea take a break and let the dust settle before taking fresh positions.

Crude Views!!!

Gold Views!!!

An Ode To Democracy !!!

Democracy will not come
Today, this year
Nor ever
Through compromise and fear.

I have as much right
As the other fellow has
To stand
On my two feet
And own the land.

I tire so of hearing people say,
Let things take their course.
Tomorrow is another day.
I do not need my freedom when I'm dead.
I cannot live on tomorrow's bread.

Is a strong seed
In a great need.

I live here, too.
I want freedom
Just as you.

Langston Hughes

Well the biggest exercise in Democracy comes to an end and here are a few statistics;

Well done India!!!