Sector Movement

Lets take our discussion on sector move a bit further. The readers of this blog can remember that in our September 13 post we told you about the movement in Banking sector . http://swingtradingideas.blogspot.com/2009/09/keep-banks-on-ur-radar.html
http://swingtradingideas.blogspot.com/2009/09/some-weekly-trading-ideas.html

We mentioned about PSU Banks moves on charts. When a sector is in strong uptrend it corrects and then resumes its uptrend with greater force. Today we saw this happening in banking sector. We saw secular moves in all banking stocks . Private and PSU bank stocks all had a great rally today.

Tomorrow is the last trading day of the week. I intend to book profit in all my positions except in Bharti Airtel. Bharti Airtel - MTN deal is off and this may prove good news for the Bharti . Form here on the downside is limited and a relief rally is expected.This was our weekly pick also.
We are going to have a long weekend.
You can also use the time to read good books . One such book I would recommend as a trader is " The Power Of Your Subconscious Mind" by Dr Joseph Murphy.

Sugar sector is Buzzing

Suhar sector is moving up after the consolidation. Dhampur, Andhra Sugar are moving up.

 

Andhra Sugar has support at 130 and resistance is at 160 . Dhampur has support at 95 and resistance at 130

Sector Movement and Its Importance in Stock selection

If you want to buy a property which you think would give you manifold returns in future then you have to keep only one thing in mind - location, location and location.

One of the greatest trader and one of my favorite trade the greatest Jesse Livermore had echoed something similar about stocks. He always looked for sector , sector and sector before buying a stock. You have a higher probability of making money if you select the strongest stocks from the strongest sector. Today we saw sectoral move in Oil and gas . RIL, ONGC, Essar Oil, Chennnai Petro, GSPL, Petronet all moved. If you were smart enough to identify this sectoral move early in the day you must have earned a handsome profit.
Sectoral movement always plays a key role in stocks movement.
Today we also saw movement in Shipping sector.Some news about the Baltic Dry Index also helped this sector to move up.You can read the news articles by clicking on the given links:
www.bloomberg.com/apps/news?pid=newsarchive&sid=aKmdxZjukbao

The Baltic Dry Index, a gauge of the cost of carrying dry bulk commodities such as iron ore, coal and grain, had made a high of 11600 in January 2008 . It is now trading at 2300. Now the question comes should we buy shipping stocks ?? The answer is no. We should look for the follow up buying tomorrow. If we dont see any further move in Shipping and Oil and Gas stock then we should stay away from these two sectors.

Both these sectors are deeply influenced by the movement of Dollar.Dollar is expected to remain weak. Now weak Dollar will also have negative impact on earnings of IT sector. If Dollar remains weak how commodity price would get affected ? Will the inverse relationship between Dollar and Commodity price go on as always ? Well, markets are markets they do not act the way we expect. Markets have their own logic and markets are never wrong opinions are. You can read about Dollar loosing its status of reserve currency in future :


http://online.wsj.com/article/SB125418301226347949.html

For todays trading I will keep Bio Con Ltd and Glenmark Pharma on my radar with stop of 245 and 225 respectively

Sector Rotation

Shipping Sector moves two steps forward and one step backward.It remains mostly sideways .

But, today Shipping Corporation seems to get out of correction.Support is 135  and resistance is at 150.

 

If it is able to close above 140 then we may see it retesting resistance zone of 150-153.

Oil and Gas sector moves

Oil and Gas sector is witnessing a fresh up move . Essar Oil has support at  12- 155 and resistance at 180-185.

Update On Patni Computer and Nagarjuna Constrcution

Patni has moved up now its time to book partial profit and keep  stop at buying price . Nagarjuna Construction is resuming its uptrnd and so does Sesa Goa

Some weekly trading ideas

US market surged up followed by  a rally all across the globe. This augurs well for our market and may give a good festive start to the week.

Shorts will run for cover and this may provide further fuel for another rally on Nifty.
 
Metal stocks have corrected and  may resume the uptrend again. We like Sesa Goa -stop 250 target 285, Uttam Galva stop 113 target 143,  ,   Dena Bank stop 64 target 96, Mahindera and Mahindera stop 810 target 900-943 ,  REC stop 190, target 220, Natco Pharma stop 124 target 163  and Moser Baer stop 92 target 114.

Pharma stocks are trading at new high, wait for corrections to get in.

These are some of the stocks from different sector . I will take position in  cash in different stocks from different sector to diversify my risk. These are my weekly picks and I will review my positions by 3.00 Pm today and will exit from those stocks which would not move up and continue with those stocks which are performing . I do not intend to take a longer term view and may exit from all positions by the last trading day which falls on Thursday.

Patni seems to resumed ite uptrend

Patni is trading above yesterdays high of 428 . Lets us take another example Nagarjuna Construction had two down days and then

a doji formation yesterday with  a high of  146. Today its trading above 146 . The correction seems to be over with possible retesting of

157. Lets watch out how these two perform.

 

 

How do we indentify that a correction is over ??

Todays theme is how do we identify that a correction is over ?? We thought Bhart Forge would go through correction but it found support at lower levels , bounced back and closed above previous days high. Therefore, the question comes when do we buy a stock ? The best way is to buy it once it gets over the correction phase and resumes its original trend .
Lets take a real life example . Patni Computer is in uptrend . It is correcting after making a yearly high of 488. On a daily candle stick charts it has made lows on last four days. It may see some more down days -- when do we identify that correction is over and we buy again ?? Today the stock made a high of 428 and it closed in negative at 417. If on any day the stock closes above 417 with some rise in volume ie makes a green ( UP) candle we buy it. If it closes below 417 tomorrow then we do not buy it. Should we go short on it ? The answer is no . In an uptrend one should always trade along with the trend. Since the trend is up we should always look for buying opportunity. If the stock closes above 417 and Nifty remains supportive we may see the stock pulling back to 488.

Have fun and learn to trade

After Tea now its turn of Sugar stocks

Tea stocks have boiled. Now Sugar is seeing sweetness. Renuka Sugar, Triveni and Dhampur Sugar are attractive.

 

Bharti Airtel is  a safe bet for next week. This is our weekly pick . Support at 400 res at 450-480

Time to stay light

We have seen the momentum taking the Nifty to above 5000 levels. Now time has come to take atleast 75 % of your quantity off the table if you are a short term trader. Even if you are an investor it is not wise to buy at these levels. Its time to remain light and book profit and wait for the next low risk opportunity.

Bharat forge has started correcting and may remain weak , resistance is at 394 and may correct to 340-320.
I have sold October Month out of money Nifty Calls to take advantage of trading holidays and earn on time value.
We are going to have a long weekend ahead , book profit and enjoy ur weekend. I am also planning to go to some destination away from the hustle and bustle of city life.

Understanding all about Dollar

If you trade in equity or commodity market then you must have develop an understanding about the Dollar.


Lets see what Chuck Butler,President,EverBank World Markets WWW.EVERBANK.COM, has to say about some of the best books ever written on this subject


One of the first books I ever read about the dollar, was written in 1972, Gerald Krefetz, titled , "The Dying Dollar" Another book that was published in in 2003 was Richard Duncan's "The Dollar Crisis"

The Dollar Crisis was followed by two books by Addison Wiggin and Bill Bonner, "Financial Reckoning Day" and "Empire of Debt"... Addison also wrote "The Demise of Dollar", and then Craig Karmin wrote, "The Biography of the Dollar", All of these have done a wonderful job of explaining things to people that normally wouldn't understand all that's going on, financially

The reason I brought this up is that Richard Duncan was in the news last night, as he gave an interview in Hong Kong yesterday... Let's listen in to Richard Duncan...

"The bad news is at the end of a 10-year period we're still not going to have fixed the problem. Eventually it will lead to high rates of inflation well down the line and really destabilize things to the point where they may be irreparable damage. A kind of "Fall of Rome" scenario."

Of course Mr. Duncan was talking about the U.S. Budget Deficits, which he feels will continue to pile up in the next decade, eventually reaching an unsustainable level that may result in an economic collapse...

I think it would behoove us to listen to Richard Duncan, for in his book, "The Dollar Crisis" published in 2003, he told us that persistent Current Account Deficits by the U.S. were creating an unsustainable boom in global credit that was destined to break down, resulting in a worldwide recession.

Reproduced from the News Letter of Chuck Butler

Tea stocks rise

Tea sector is moving up after consolidation.

Tata Tea has support at 890 and resistance at 990.

Jayshree tea will see action above 290

PSU banks are showing momentum

Vijaya Bank has resumed its uptrend support is now at 44 and resistance is at 55-60

Do not fight the trend

Markets are in strong uptrend and most of the retail traders have the temptation of going short on Nifty. As a trader one should not flow against the flow. One should be in tune with the market.
Global markets are showing strength.Dollar is again going south and commodities are firming up. In US, Street expectation is that the Fed will leave its target range for the federal funds rate unchanged at 0.0 to 0.25 percent, although analyst will be keeping a close eye for any indications of future rate hikes.Intel Corpn has announced that personal computer sell is picking up.

Tomorrow we may see action in HCC with supports at 115 and res at 160 and RPower with support at 165 and res at 190.
Our weekly picks Tata Motors and Satyam Computer has done well today . You should exit from these two on Friday.
BTST trade India Info Line and Rolta are expected to do well tomorrow , if u have taken any position you should exit by 10.15 Am.
As long as the momentum and trend is up take every dip as buying opportunity.

Rolta and India Info Line shows strength

Rolta and India Info Line shows strength and are good trades for BTST

IVRCL - Breakout

IVRCL has broken out of  a range stop is 360 target could be 450-480-500

Global economy is on recovery path

Nobel Winner Krugman Says ‘global economy is on recovery path'.

You can read abt it

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ap6aPBj59zLc

At present rise of dollar is putting pressure on commodity price. On Tuesday one should stay away from Tata Steel, JSW Steel as these stocks may see weakness.

Bharti airtel has moved out of narrow range with good volume 418 is suport and 480 is resistance .If Bharti is able to move up then one should also go long on idea as this stocks has corrected and the uptrend is expected to resume with stop of 72 and resistance of 84.
Shipping sector saw action on last Friday ,Ge Shipping, MLL and Essar Shipping may continue with the uptrend .
Pharma stocks also saw action on Friday. Cipla seems to have corrected and 250 seems to be a strong support.
On weekly time frame Mahindra Satyam and Tata Motors are good trades

Sunday thoughts

Dr Brett Steenbarger has posted some quotation on his blog . These are pearls of wisdom for traders .


http://traderfeed.blogspot.com/2009/09/quotations-success-and-failure.html


Have a nice weekend ahead.

Markets are expected to remain subdued

After the run up and looking at trading holiday on next Monday we expect the market to remain subdued. Prism cement, 3 I Infotech, Essar Oil , Navneet Publication looks interesting. Cement sector as a whole will move up if we see follow up buying today. RIL will weigh heavily on Index movement . We may witness some bouts of volatility ahead of the expiry.

We would advise you to book profit on your long position today by the end of the day.and have a nice weekend ahead. Relax and read during the weekend and start afresh from next trading session.

Will we move to new high ???

Well, its almost have been a year . A year before we had the financial meltdown ,the Lehman Bros.collapse, and credit default swaps, and Gov't bail outs and  announcement of Stimulus package all acorss the globe by Government. Now everybody is talking that the worst is over. Are we really come out of woods ?? Just for your information Japanese Index Nikkie  made a high of 38900 in year 1990 and today its trading at 10300 . Real estate bubbled had an adverse impact on the economy. And do you know  that the Japanese introduced 11 different stimulus packages worth 30 Trillion yen? The Japanese thought that rescuing bank and  making concrete river bed will put economy on track but they were wrong . The country has a huge debt and people are saving more and consumer spending is not picking up.US ans all global markets surged up on the back of some encouraging economic data particularly about increase in consumer spending  but how long is it going to sustain ?? Unemployment is a  big concern and as people are unsure about future they tend to save more and do not spend .

 All this has been nicely highlighted by Bill Bonner of .www.dailyreckoning.com
You can read about it in detail  http://dailyreckoning.com/the-credit-cycle-has-turned/

One should just keep this simple things in mind as  media talks about Nifty going to 5500-5700.

Some action

Yes bank, 3 I Infoteck, FSL are seeing some action with good volume

Book Profit - Dena Bank

Dena Bank has had a nice upmove. One should take profit on 75 % quantity.

Thanks for your feed back

Yes, Fahd they have done well  and not to forget Renuka . Thanks for your feed back.

Learn to trade well is  the objective of this blog. keep on learning .

Time to take money off the table

Markets are in   a  frenzy some of our recommonded stocks have done exceptionnally well. Orchid Chemical which we recommonded earlier had a dizzy run. Now time has come to take some money off the table. Use this rally to get out of  Realty stocks.
For today one can go long on Bajaj hindustan with  keeping in mind 170-175 as support zone  and 220-235 as resistance zone. There are still short positions in  this stock and short covering may proppel this stock to higher levels.

A breakout on Nifty

Today Nifty was able to trade out of the narrow range it has developed for the past one week. Jindal Steel and Power, Welspun Gujrat, Patni Computer and Suven Life Science are very strong on charts and one can even make a short term portfolio of these four stocks. The risk takers can also go for Adlabs Film and DLF.Book profit on this portfolio when Nifty trades around 5200.
Dollar is expected to remain weak and this may lead to more FIIS inflow to our markets. It seems that earlier Yen was used in Carry Trade now Dollar may be used for Carry Trade.
As long as momentum is strong remain long and reap the profit.
Happy trading

Berger paint has corrected

Berger Paint seems to have been corrected and resumed uptrend. Support is at 50 and target could be 75

Stay where risk is low

Nifty is still trading in a range ,its wise to hide in mid cap stocks where some upside is still left.
some of the low risk opportunities are with GSPL, MRPL, Renuka Sugar , India Info line , IVRCL to name a few. Our earlier recommendations - packs from shipyards have resumed their uptrend. Keep on booking profits as they come along.

Have relaxed trading.

Are Global markets topping out ?

The US economy faces a difficult time ahead as consumers stop spending and the fallout escalates from the collapse of the commercial real estate market, economist Nouriel Roubini told CNBC.

For more details pl go through the link given below:

http://www.cnbc.com/id/32837255

Have fun!

Keep banks on ur radar

On Monday we may see some action in Banking and resources stocks like Dena Bank,Allahabad Bank and Gujrat NRE Coke . Nifty is still in uptrend and dips should be used to buy these stocks.

The Psychology of Trading by Brett Steenbarger

Here I am reproducing a note by Brett Steenbarger on trading
http://traderfeed.blogspot.com/2009/05/trading-and-training-of-will.html

"Without freedom there is no trading. Trading is a celebration of economic and political freedom. Slaves are traded; they do not trade.

All this freedom, however, is for naught if we, ourselves, are not free. It is the deepest of ironies that we experience greater freedom--far broader potentials--than those who came before us. And yet, in our lives, in our abilities to master ourselves, we are no freer. Amid opportunity, we remain partial: tethered to our conditioning.

What it means to be free is to be able to choose, to live with intention. The free life is one that we guide: a life lived with purpose, direction, and meaning.

Trading, like all the great performance activities, is an opportunity to cultivate the intentional life. Pursued properly, it is a path to freedom."

Risk gets higher as we move higher

Its time to take money off the table when going is good. I am off for a weekend therefore, will not be able to dwell on Nifty except the note that wait for dips to enter.
Berger Paint is buy only if it is able to trade above 62-63 for a tgt of 75. Dhanalaxmi Bank has made a new high and its a buy near 130 and if markets are supporting enough it may see more upside. Be light with your long position.
Have a nice weekend and spend some of your trading profit .

How to trade Gold

It is interesting to read this article

http://online.barrons.com/article/SB125244951610193849.html

Time to get out of trash stocks

Traders and Investors should use this rally to get out of trash stocks particularly from Realty Sector.

Focus on Individual stocks

Well, Nifty is forming a base and Dollar has again fallen and made a new low of the year. This will give commodity some boost but one should not forget that it will bring some inherent risk to equity market also and soon equity market may follow the course taken by dollar.
At present there are no apparent sign of any weakness therefore, one should ride the move and mint money.
Tea stocks have started moving up after the correction and so are the shipping stocks.Harrison Malyalam, Mcleod russel, Jayshree Tea , Assam tea , ABG Shipyard and Bharti Shipyard are some of the stocks one should buy

Our stocks do well

A very short note- falling dollar helped all three recommended stocks Sesa Goa, Sterlite and HOEC to do well today. HOEC closed with hitting upper circuit.

Nifty may form a base here

After breaking out of the broad range of 4350-4730 now Nifty may form a base here. Yesterday Cement and Sugar sector had the initial start but follow through buying was not seen. Dollar is coming down sharply and this may augur well for commodities stocks like metal, oil and gas . Sesa Goa may see some action along with Sterlite and HOEC.
but do not rush, wait for dip to buy.

Cement and sugar sector is back

Tata Chemical has moved up. Cement and sugar stocks like India Cement, Triveni, Balrampur are back into action again.

Where do we go from here ????

Nifty has broken out of the range of 4350-4730 . This breakout may be a false one but if Nifty is able to sustain above 4650-4700 we may soon see it touching 5000-5100. One should wait for the dips to go long on Nifty.
Godrej Industries , Tata Chemical , Shanthi Gear, Thomas cook and EKC are looking strong on charts . Our yesterday pick India Bull Real Estate has also done well.
In this frenzy one should not forget about the global market. We will be able to move up only if we get support from global market and things are not rosy there either. So watch this space and have fun in your trading.

Nifty is still in a range

Nifty had a positive closing on Friday on account of short covering and some value buying on the back of good global cues.Nifty is now approaching the upper band of the range 4740-4750 is a major resistance area and it will require lots of efforts to get past this level. If global cues remain supportive then only we may see Nifty trading above 4750.China still remains a concern.
Individual stocks is the place where action would be taking place. Some of the stocks have corrected and gain started their upward journey.
Voltas, ICSA and Petro Net have resumed the uptrend. KPIT Info system , India bull real estate are also poised for an upward move.
Gold is now trading at the upper end of the range if its able to trade above the key resistance level of 16000 then we may see it going all the way up to 18000.

Trade in Individual stocks

We have been of the view that one should stay away from trading in Nifty futures and should focus on individual stocks particularly mid and small cap segment. We may see action in Mid Cap textile stocks like S. Kumars ltd auto ancilliary like Motherson SS and small tea stock like Assam Company. These stocks have corrected and are resuming their uptrend.
We had earlier expressed our view on Alok Industries and Arvind Mills. They are now back into action again.
Our caveat is take small position in one or two stocks and be quick to take money off the table.

A pull back is expected

After the hammering of global market for the past two days a bounce back is expected. US market will watch for the job data to be released today and analyst are expecting improvement in jobless claim figure.
Coming back to our market we prefer going long on Orchid Chemical, Polaris Software and Rec Ltd . If Nifty is able to sustain above 4580 then Ranbaxy , Bio con Ltd and Natco Pharma may also see some action on upside. But this is a time when you should not too many positions . Nibble at one or two stocks with less volume and be quick to take porofit in time .

Use the dips to buy those stocks which u missed

These dips will also provide you opportunity to buy those stocks which have run up like Sasken Communication.Tea Stocks are also buy on Dip. Of late Gati, sical and Aegis Logistic have also shown strength

Time to go short

We have already told you two days back that global markets were showing topping out pattern and signs of crack and we also stated that Oil and commodity will remain under pressure. Well, now time has come to go short on Tata Steel, DLF, HDIL, Sterlite, Jsw Steel, Axis bank . Remember we have had a 80 % rally from the lows of March 2009 . These rally are not even witnessed in secular bull market within such a short span of time. And we are still not into a bull market yet.
As we have posted on our blog that market has already trapped the longs and its heavy on long side. The unwinding of long positions will give you enough fuel to remain short. Now instead of buy on dip its time to short on rallies.How soon sentiment changes ?? Well, thats what market is all about. Do not take anything for granted . There is no easy money to be made .