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 🙂

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8 thoughts on “June 4, 2018 Weekly Market Analysis”

  1. Marvellous. Crisp, informative and well directed.

    You pointed correctly these recommendation should not be used without applying own mind. As a option trader position with time is the key.

    Liked by 1 person

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