July 2, 2018 – Weekly Market Analysis

Fresh 3 monthly charts are here :

Nifty Small-Cap Index with 10EMA Applied. More Pain Left? Well, we are trading at support for now.

niftsmall

Nifty Mid-Cap Index with 10EMA Applied, More Pain Left? Well, Maybe Yes.

niftymids

Here is Just-Dial 3 monthly chart, look at the big volume, once it starts gaining momentum, 700+ wouldn’t take long.

just

Calling bottom on anything mid-cap would be naive, a given market in downtrend or bear territory keeps giving the illusion of strength which happens due to short-covering or investors rushing into buying thinking prices have stabilized but it’s a long churning process which takes months to resolve basically taking the trader to bankruptcy. I am not trying to scare but lessons are to be learned from PNB or Balrampur Chini recently. I have not been able to find any good long setups here, don’t track small-cap stocks so can’t comment on them except looking at it’s index.

Among Private Bank, 2 stocks that peak my interest are Axis Bank and Yes Bank, both on long side. Take a look at IndusInd bank, reversing from 1995 – turning out to be a tough nut to crack that level.

Here is Yes Bank Chart:

fibyes

Among IT Stocks, I have got no comments, did say “Infosys should go down badly” in one of my tweets although it has rallied 3% since then, I still don’t like the chart structure. God Bless those who are trading them.

Among Pharma Stocks, things have changed here recently, no doubt Pharma took over the street in the month of June. I like 2 stocks here for a long side-play – Lupin and Cipla. I did tweet about AuroPharma outperforming but looking at price action recently have changed my view. I think Pharma might not do much this July and stay in a rangebound mode.

To Explain this, here is Pharma monthly chart, I expect a small red candle next looking at the formation of pattern.

pharmamonth

Among Motor Stocks, TataMotors would be on radar, bulls have exited this space it seems and I am bullish. was waiting for it to give the bear trap move and it did. Last June, kept getting messages from traders holding call options and the inquiry have stopped, I use all these psychological metrics in Trading. Read “Reminiscence of a stock operator”

motatmo

HeroMoto is one stock I would advice to stay away from, it’s a bad-looking chart, you can draw all the trend-lines you want but it is weak. I have no edge in Eicher Motors.

Among Cement Stocks, it’s playing around within a range, I have got nothing to share here, investors can accumulate for long term but as a trader, I have got no edge here.

Among Individual stocks, two I like in particular given the risk-reward is Coal India and ITC. Please refer to their weekly charts to gain more insights. ITC can lift FMCG index even higher. TataSteel is worth looking into above 580.

Here is the deal with pharma. although I don’t see much happening, betting on STAR (I do hold call options for the month of July) there is always one stock surprising as traders would be busy shorting everything in this sector.

I apologize couldn’t write about options, it’s a broad topic, would consume time with detailed analysis, some other day, Promise!

What Else? This Blog is Over. If you feel I am lazy and didn’t bother to write much, will leave you with this

“You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run”

Keep sizing in check and see you on the other side of field next week. Peace 🙂

 

 

 

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June 25, 2018 – Weekly Market Analysis

This is what was written last week as I skipped writing a blog due to lack of an edge.

niftyyy

This is what $Nifty Did Basically Ended Up Doing.

niftyyyclosi

Did I See All This Coming? No, Ofcourse Not. This is not one of those moment where I self-praise myself. My Point is when I look at charts, my focus is to find imbalances in demand-supply. How Do I do that? Well, I think my excuse of sub-conscious doing it’s job after watching for long hours would seem like an egoistical statement; not denying the fact that it is however true. I look at chart structure, the way it is tweaked, those zones which are stretched like a rubber band which will force itself to take original curve once released, price movements in market are nothing but real-life incidences as the participants moving it are composed of people, it can be difficult to explain as something visual cannot be expressed in a better way just by writing about it.

Here’s the main question? Do we have an edge this coming week? Yes, we do. Market gave a signal on Friday, it could be defined in 2 ways here.

  1. Traders were basically seeing 10820 kind of levels being rejected several times and saw resistance along those lines, probably the best case scenario here was to take a short position. Market was smart too, as it was not letting 10700 getting breached as that would have triggered stoplosses in many of my positional trades. The short buildup might have squeezed shorts as tired bears ran to cover up their position going into the weekend which sparked a “Domino Effect”.
  2.  I disregard the theory of support/resistance while trading as it doesn’t help retailers whose Stoploss keep getting hunted by Big Fish, exceptions do exist in index trading and fundamentally strong scrips. More probability of resistance getting breached is when an upside level is rejected and a given market bounces strongly from lows. This is what is happening in $Nifty right now. I do always use a statement which goes like “It did not come this far to reverse”. If market is rebounding like that, I do think we have got another leg higher.

Talking about Banks, As much as I would like to Buy SBI, I would refrain from doing that next week as many retailers are bullish on this counter. Charts are not bearish but even if I would have to negate the position of retail, risk reward going long looks slim.

Among Private Banks, HDFC is evergreen, I won’t go long but one should be doing that at this point, reason for not taking a position is that my trading style is not buying something going up or selling a broken down stock. God Bless those who do and I know there is good money in that but I will save my money here on HDFC not shorting like a maniac. There is no edge in Kotak, so maintain a neutral view. ICICI is a beautiful chart, as long 300 is sustained, won’t be surprised it doing 320 as we have a small gap there to fill. Mind you, gap filling is not a mandatory exercise done by market, we just tend to connect it with some other trades that did so but cannot be said for certain of that event to happen. Neutral View on Axis Bank. Indusind remains bearish as long below ATHs of 1995 as explained in past blog post through huge volume observation. One can take a positional long on Yes Bank, it is not breaking 330 kind of levels and still remains bullish.

Among PSU Banks, I would have never bought BOB ever, reason was quite simple, most PSUs are trading near lows of 2002 but this stock has not seen a similar fall, some might argue this to be sign of strength but on a cautionary note, would stay away as the risk on downside remains large.

Among IT Stocks, there is no point in ripping individual stocks as I see no edge in any of the stocks specifically, however would be more inclined towards the short side here.

Coming to Pharma Stocks, runup has been huge and I see no slowdown in momentum at least this expiry. SunPharma might breach 600 next week. Cipla has formed a beautiful chart, this is the only stock which does not have a downtrend chart as the damage was relatively less compared to other Pharma Stocks. I was particularly bearish on Lupin in my last tweet but things seem to have changed now as it has successfully sustained 900 levels, so can see another spike. AuroPharma has always been confusing for me but last night was looking at it’s weekly chart and it has just taken rest on 200EMA Weekly so we have a positive signal for now. There is no edge in DRL at this point.

Among Auto Stocks, Maruti is retail’s favorite so I avoid trading this scrip, I have got this weird nature of not trading something accepted by the majority, same reason why I never touch Bank Nifty and yes, you can go ahead and judge me on that 🙂 No edge in Maruti right now.  TAMO is trading at an interesting juncture, keeping 310 level on radar, either it should reject it to slide down or give a breakout above. M&M should not be touched, it gives breakout once a blue moon and frustrates a trader for coming weeks. Bajaj Auto/Hero Moto are not speaking much to me, so leaving them too. Eicher Motor is looking bearish here.

Among Cement Stocks, Ambuja Cement and ACC are both seeing rejection of lower levels by market aggressively and have formed pinbars on weekly chart, would wait for this week to get over for a more clear view.

Talking About Individual Stocks, ZEEL has come to my radar after a long time, months basically, being a long-bias trader I never saw an edge going long but recently found it forming a good base and has closed well above 10EMA on daily chart. It has also stayed out of limelight since last few weeks so can surprise by giving a move on the upside.

Recently, was mocked on Bajaj Finance by one Twitter user – I never short 52 Week-highs or go long vice-versa. This was a different case as I saw something in Bollinger bands and did use the word  “short-term top” but of-course no mention of specific time-frame does make it obfuscated for a reader to understand, hence the trolling when the move came after a WEEK after remaining rangebound for few days.

Honestly, there is no edge I have been able to find in other FNO Stocks, I think more clarity will be given once the month is over as operators keep retail trapped who are stuck in their position and can keep the stock manipulated longer than expected for a given expiry month, only observation is that MSFL is not looking good at all, If the scrip is not able to find a buyer on Monday, we might see a fall here. BPCL as mentioned in the first blog post is having a clear chart and I am still very much bullish on this scrip ignoring the crude factor. Also, India Cements should be kept on radar, a strong candidate of seeing big bounce-back.

Lastly, TIME IS UP FOR BRITANNIA INDUSTRIES! 

Keep sizing in check and see you on the other side of field next week. Peace 🙂

 

 

June 11, 2018 – Weekly Market Analysis

  • “It’s a bull market”.

– “How about you give me some stock ideas instead of describing something so vividly?”

  • “No, I am saving you some bucks there with that statement.”
  • The juncture at which market is trading will make you start over-thinking and you won’t do what is required but go against the trend.

– “You’re a short term trader, why even bother with such a long time frame, just look at your charts for a 2-3 day view and get out, haven’t recognized yourself yet, where you stand?”

  • “In the last two years, only haven’t seen the great recession which I am desperately waiting for to learn something new but have made the mistake of getting out early at first sign of seeing profits on screen, reason was holding big position size and emotions taking control due to the huge fluctuation in P&L ”                                                                                                                                                                                              – Care to Elaborate?”
  • “Sure “

mrff

This was close to 2 years ago when I dived into derivatives as a newbie and holding anything less than 3 lot size was a crime, traded carelessly and ended up making good money. The chart I have posted is of MRF, it was trading at 35K levels during that time and I particularly didn’t care about the trend of a market, just was interested in making big money quickly without realizing how much I was leaving at the table by booking out early.  If I had held on to the trade for few more months, would have made the biggest gain of my career.

LOLL1

Just Imagine If I had not booked out and let it rollover for few months, probably would never have to trade again but instead I did 100 more trades over the same period of time but never made close to that imaginable profits. BTW within 2 months, it went to 54K.

Let’s look at the markets coming next week, I don’t have any specific sectors in mind but would comment on the individual stocks as I read the charts. Pharma and PSU banks as discussed in last blog are performing well and might do even better in the coming days as I expect the momentum to continue.

On the bull side, SBI is looking good here and I expect the gap at 293 to be filled, next week? Ask Astro Guru. All I know is that we have go a double bottom at 233 and market rejected lower levels when results were announced (came out to be worse than expected) and clearly some strength in price action as the market closed going into weekend.

SBIRESL

 

Among Other Private banks, I am leaving HDFC Bank at neutral as there is no nobility in fighting the tape, Kotak is still bullish but price has reached an exhaustion point so won’t be touching it. ICICI and Axis Bank should be kept on radar for a long play. Yes Bank has no edge here to play.

One stock that particularly looks bearish is Indusind Bank trading below 10EMA on daily TF. One more thing that got my notice is the short term topping out process followed by huge volume, I have attached the chart and highlighted the zones to let you make sense of it yourself.

indusi

 

Talking about IT Stocks, there is no edge on TCS but would take a bearish view instead of going long.

Infosys should probably trade at ATHs next week.

ifnfo

I am long on Wipro via options and see a bounce-back, would be holding it for some time.

Neutral view on HCLTech, Tech Mahindra is one of the most interesting stock out there as the level 719 has been rejected 4 times recently and yes, as they say more a level is hit, more is the probability of it breaking but in this case, I see it highly unlikely.

Ah, Pharma Stocks, those who are long or invested should stay aboard and not get out at the next station. I have been long since last week but had to square off my position as the options went Deep In the Money and I feared liquidity problems. I should have switched on to the next strike price but it won’t go up without consolidation and I lacked a strategy in the options play on the buyers front due to time decay so would be keeping it on watch to play via futures.

Motor Stocks :- Maruti Suzuki has formed a clean base and I won’t be surprised a big rally coming next week. Need to wait for a few weeks more to get a more clear view on TataMotors as I expect it to trade in a 40 points range. Neutral view on Bajaj Auto and HeroMoto. Eicher Motors is giving a bearish signal, it kept showing weak price action and the only motor stock to trading below 10EMA on both daily and weekly TF.

Cement Stocks :- If you wish to trade ACC, Ultratech, Ambuja I consider it gambling. Period.

Only edge I was able to get was on Ambuja Cement trading at 200 last week, went long via 205CE and I have attached the chart with the usual 150dma on 5min trick 😉

AMBUJ

 

Two stocks that look bearish is PowerGrid and NTPC, both belong to the same sector and showing weakness, would attempt to buy some put options on NTPC (would be the first to go positional short)

Reliance industries is ready to breakout, never seen such a beautiful monthly chart.

rell

 

There are other FNO Stocks which I track, specifically bearish on COLPAL and TataComm. I have re-entered in IOC via call options as we headed into Friday’s closing session. What about HPCL, BPCL? Well, they don’t look good anymore and another reason was the reflection in tape. Both closed in red unable to recover from gap down but IOC did, that was the giveaway, again not a holy grail but it is seen as a positive signal when a red scrip closes green, not short covering but smooth buying happening.

One stock I didn’t talk about in my tweets was my long Glenmark Pharma..been trading this stock since a long time and I take it for granted including RBL Bank so never bothered to mention. I have been long here since few days via 550CE options and booked handsomely on Friday as it rallied 4%.

Three other stocks where I would be looking to build my long positions would be Jain Irrigation, Reliance Capital and United Spirits. Yes, I only go long and that has been my strength to spot stocks going up, doesn’t matter if market is up, down or flat, you are always able to find few green stocks so I trained myself to recognize the patterns that look bullish. There are many other good stocks too showing reversal but I have stopped trading these instances given the failure rate, would rather bet on stocks which are above a moving average than hope for a bounce on downside.

Keep sizing in check and see you on the other side of field next week. Peace 🙂

 

 

 

June 4, 2018 Weekly Market Analysis

Here we go as I write my first blog on market, wanted to tweet about it but going through charts had a lot of ideas to share so thought about writing few paragraphs instead. Now I would recommend people to go through the whole thing as I have officially registered my domain in the name of “ferrariboy” and that has really costed my some money and life is hard for an option buyer as we don’t make crores on Bank Nifty weekly expiry.

I am a short term trader so might change view in a blink of an eye and that is probably for the best as losing ego over money gives you pocket change at the end of closing session. We have got an interesting week coming up ahead as Bank Nifty recently surpassed the highs made on Karnataka election result day but $Nifty is still struggling to cross that barrier. We are still 200 points below those highs. Many speculators might see smallcaps and midcaps not performing and see that as a sign of weakness but if you have to by price action strictly, $nifty is looking strong overall.

Debating on the over-valuation of private banks sounds cool among value investors but as traders, till we see it crashing would have already gone broke shorting it via Futures. Infact, I see Yes Bank (most hated for the massive bull run) soon to be trading at All-Time Highs, a bullish chart forming a Cup and Handle, currently in the stage of forming a handle if you would switch over to daily timeframe.

Coming back to the charts for next week ahead, there are quite a few stocks I like in the pharma space. Sun Pharma takes top of that list on the long side (I am actually long via call options and see a big upside here) then comes Lupin. AuroPharma and DRL remains on the short side and won’t be surprised if they breach their recent lows. Remain neutral on Cipla, doesn’t do much damage to investors as demand-supply remains balanced.

Motor Stocks should do well as sales data were good and was quite observed through price action late Thursday.

mottr

Only concern is of TataMotors, still remains bearish below 310 and can see further lower levels as people keep accumulating thinking it is cheap when in the short term, market has less to do with fundamentals but trend and sentiment which is pretty low.

Got some questions regarding ACC recently about that expiry day trade where Rs 6 call option was sold at 33. Well, I used “150dma on 5min” chart so indicator wise that was the signal to go long, now it is not a holy grail and might have failed but have been tracking ACC since a week and I was expecting a movement in expiry week, so as Thursday arrived and I saw a good setup, well that was it, just went long within minutes it doubled and as I waited for the final move till the end of day it was trading 5 times it’s initial value, so I sold it exactly at 3pm when other speculators arrived at the scene and that is all to trading where you exit when emotional buyers arrive instead of being one in the beginning days as an amatuer.

acctrik

Now coming to PSU Banks, I am bullish on this sector. Sorry What? Yeah, I am bullish. Are you talking about those banks that are posting thousands of crores in losses on quarterly basis. Yes, those same banks. But why? Well, recently media has gone berserk quoting these red figures and Bloomberg Quint has taken a stand to expose them like we didn’t know that already. That is why I said them to be the new CNBC and many mistook it as a compliment. Last time in Feb. 2016 when Udayan Mukherjee said on CNBC that PSU Banks will never recover, well right there was the bottom made and he was right at some point if you increase the timeframe but as a derivatives trader if I will bet on news, will be margin-called due to lot sizes and hence, framing the mindset is necessary for a trader dealing with futures market.

Think about it from a trader’s perspective rather than an investor here, market already knows about those figures and it has reacted to them . Now, you want to short these scrips which has hugely declined, I wish you the best. Learn something from the recent Italy rally. Market is smart and it is never going that side which is dreaded already, that is why majority lose money betting on the wrong side and sometimes position size is so big that capital is over till the wisdom is achieved. PSU index here can go to 3350 kind of odd levels.

If I have to look at some individual stocks that have come under scanner would be BPCL, I am getting a major bullish signal here. Another interesting long would be CESC, posting a monthly chart here with 10EMA applied. Another stocks that looks bullish is PowerGrid, recent fall looks more like a weak-hand removal move, should breakout soon.

1month cesc

Those desperate to short Britannia or any other FMCG stocks should see the retracement stock has done ever since the 2017 bull run, it’s not worth the risk and you’re going against a trend anyway. Learn something trying to find bottom in sugar or pharma stocks and losing money, reverse the psychology part here, getting fooled in the same manner every damn time is not cool. If you can’t go long, LEAVE IT ALONE!

Power of 150DMA with bollinger band when applied on $Nifty

150d

Here is chart of ITC Forming a cup and handle, the handle part remains in question, however ignoring the technicals, it’s not a bad buy here given the fundamentals and FMCG tag.

itc

Now, all these commentary are quite few observations that I wanted to tweet but it would acquire quite a space on timeline so thought about blogging instead. Not to be taken as trade recommendations but apply your own brain to further refine the process as you go further into this trading journey. If this works well, would do more…also, I HAVE PAID FOR DOMAIN ON YEARLY BASIS so will not let it go to waste. I am not a professional blogger, so bear with me on the writing and grammar part, still trying to find my way out here.

Keep sizing in check and see you on the other side of field next week. Peace 🙂