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 🙂

 

 

 

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2 thoughts on “June 11, 2018 – Weekly Market Analysis”

  1. Superbly analysed..appreciations for that..very useful to the traders like us..keep analysing and keep enlighten ppl..congrats once again

    Like

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