Weekly Trading Ideas

Some of the weekly trading ideas are :



Stock Support Resistance

Neyveli Lignite 145 162
GSPL 90 105
Vijaya Bank 48 56
Jindal Steel & Power 650 750

TEN COMMANDMENTS FOR INVESTING By Mr Rakesh Jhunjhunwala

TEN COMMANDMENTS FOR INVESTING:
•Be an optimist! The necessary quality for investing success.
•Expect a realistic return. Balance fear and greed.
•Invest on broad parameters and the larger picture. Make it an act of wisdom, not intelligence.
•Caveat emptor. Never forget this four-letter word -R-I-S-K.
•Be disciplined. Have a game plan.
•Be flexible. For Investing is always in the realms of possibilities.
•Contrarian investing. Not a rule, not ruled out.
•Its important what you buy. It’s more important at what price you buy.
•Have conviction. Be patient. Your patience may be tested, but your conviction will be rewarded.
•Make exit an independent decision, not driven by profit or loss

What is common between Tiger Wood and a Trader

Course management of golf, one of Tiger's great hidden attributes, is no different from trade management in the markets — one of the keys to successful trading.
 

 

   Adam Hewison,President INO.com,Co-creator of MarketClub.com  share about his ideas .

 

You can read about it . by clicking the link given below:

 

http://club.ino.com/trading/?p=1777

 

 

Have a nice weekend ahead.

The sun never sets on Dubai World -- Will it set this time.??

Dubai Debt Crisis has sent shock waves across the globe bringing back the memory of worst financial crisis which we witnessed last year.

American Markets are closed on account of Thanks Giving Day holiday. European Markets are feeling the pinch and most of the markets are trading in negative with loss of more than 2 %.

One can read about the crisis in brief at

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRsjlClzl500


Our markets were showing signs of weakness and this crisis may act as a trigger for a deeper corrections.
Nifty 50 DMA is around 4970 and if Nifty is not able to trade above it then we may see the possibility of retesting it the recent pivots of 4538- 4550.Every major dips should be used to buy. One can refer to our list of all time high stocks for reference.
Health care sector do well in falling market.

Glaxo has had four days of correction and has found support at 20 DMA . It has support at 1590 and resistance is at 1715.

Orchid Chemical has support at 175 and resistance at 210.

Realty, Infra are the weakest sectors and Banking stocks may also get affected in short term by the negative sentiments arisen out of Dubai crisis

Dollar Weakness

We are witnessing persistent weakness in Dollar, which fell to 14 year low yesterday after the Fed said it plans to keep interest rates at "exceptionally low levels" for an "extended period" -currently the Fed funds rate stands at a range between zero and 0.25 percent.
Weakness in Greenback will encourage dollar-carry trades. It means US Investors would buy higher- yielding assets outside America.
This may result in more money flow to Emerging Markets.

Commodity stocks may perform today. Keep on booking some profit as we inch higher.

Sesa Goa has supports at 350-365 and resistance are at 400-430.

One should keep Nifty Index stop of 5000 for all short term long positions as exhaustion signs are still there.

Market faces stiff resistance

The momentum seems to be exhausting. Do we see sign of reversal of uptrend for short term - the answer is no.
Most of the stocks on charts seems huffing and puffing.
Though there are some pockets where we see strong momentum.
Dollar may bounce back for short term and this may put pressure on Commodity stocks.

Cement, Tea and Sugar Stocks including Tata Coffee had a field day yesterday. We see the momentum picking up further.

ITC has support at 260 and resistance at 300.
Our New High List is to be watched out carefully as it is the place where strength is.

Momentum Continues

Nifty is on the verge of retesting its recent high of 5181 on the back of strong momentum and positive global cues.
We were the only one who never went short on the market and instead bought every dip. There is no rocket science involved in our analysis. We remained with trend which is up.
Cipla, ITC, Jindal steel n Power, Jindal Saw , GAIL are trading at new highs.


Torrent power has resumed its uptrend after correction, it has broken out of bullish flag formation. It has support at 310 and resistances are at 370-400. GSPL has supports at 90 and resistances are at 113- 125
PSU banks are showing breakout after consolidation.

Stocks and Sectors at Life Time High

There are many stocks which are trading at all time high . While Nifty is yet to catch its life time high level of 6357 the following stocks are trading at life time high. What does this indicate? It indicates that these stocks are at present have more relative strength than Nifty and they may continue to outperform Nifty in near future too.
How one should trade them ? The best way to trade is buy the stocks on dips.The stocks are :

Mphasis
Infosys
Nestle
Proctor and Gamble
Marico
Dabur India
Mcleod Russel
Torrent Power
Rec Ltd
Jayshree Tea
Exide Industries
Amar Raja Batteries
Rallies India
Godrej Consumer
Mahindera and mahindera
Maruti
Hero honda
Lupin
Dr Reddy
Renuka Sugars

LICHF
Central Bank,
Yes Bank
PNB

Sesa Goa

If you further classify the above stocks into sectors- the sectors are FMCG including Sugar and Tea , Auto, Auto Ancillary , Pharma and to some extent Finance .
These sectors should continue to do well and one should have exposure in select stocks of these sectors, ie one should not buy all stocks but have exposure to some stocks of all sectors.
These stocks will correct and find support at 20 - 50 EMA on daily chart. The best way is to buy these stocks near 50 Ema with small quantity and then add more once it trades above 20 EMA . Sometimes it may not retest 50 EMA then the best way is to buy near 20 EMA.
One can find the charts of all the stocks on http://www.icharts.in/charts.html

If you have been following our blogs regularly then you may find that we have discussed about most of the stocks.

We discussed about Baltic Dry Index on our blog on 11 November . Money Control also discussed about it on 20-11-09.

Who Makes A Good Trader

Bloomberg has an interesting article about who makes good traders.

Brandon Adams, who teaches behavioral finance at Harvard University's Department of Economics, says some of the best candidates for Wall Street trading jobs are the professional card players

Before, we were asking about GPA or the Math/Physics Olympiad," Satanovsky, a former Russian national bridge champion, said in a telephone interview. "Now, we're asking questions about poker successes."
You can read the article by clicking the link below:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=alximP6.Eta8

 Our Comments: On a lighter note -Sounds  familiar, do you know  that some of the averaging methods like pyramiding trading,Martingale (probability theory) comes from gambling world and  The name Monte Carlo Method is a reference to the Monte Carlo Casino in Monaco.

Have  a nice weekend.

 

Use Dips to buy strong stocks

In an uptrend dips offer opportunity to buy strong stocks.

Shipping and Mid Cap IT sector is going strong.  some of the interesting stocks are:

 

 

 

 

                      Support      Resistance

Essar Shipping   61           77-88
   SCI               140               155- 170

 Polaris          156              184
  KPIT                98           130

 

 

On downside if Nifty is not able to trade above 4870-4900 then all short term long bets are off

Shipping Sector moved up as expected

We posted on our blog about the move in Baltic Dry Index and its impact on commodity and Shipping stocks. You can see the move thereafter in Shipping Stocks and Commodity Stocks like Sesa Goa, Bhushan, JSW , SAIL etc.
Readers can refer to the earlier post .

http://swingtradingideas.blogspot.com/2009/11/sectoral-relation-ship-and-baltic-dry.html

Some of the interesting charts are:

Elecon support 85 resistance 105

Glenmark support 240 resistance 275

Usha Martin support 70 resistance 105

Take 4900 as Index Stop for all short term long trade

Market actions for the past two days  reflect some tireness at higher levels. Though we have yet to see a sign of reversal of trend.

 For Nifty 50 and 20 DMA are very close and 4900 is the place where the dividing line is. As long as Nifty is trading above 4900 the trend is up.

 

Hexaware Technology seems to be breaking out of its resistance zone of 95. If its able to trade above 95 then we may see 110-118 levels with support at 85.

 

Keep Your Analysis Simple to Make Money

Just to remind our readers that in our earlier blog " Road to Recovery" we made a very simple analysis and started buying in the correction when majority was going short. We stood with our very basic analysis that in bull market one should and must buy corrections.
You can refer to our earlier post of 04-11-2009

http://swingtradingideas.blogspot.com/2009/11/road-to-recovery.html

Ride the move. Have fun.

Bio Con on radar

Bio Con has started moving up. Support is at 256 and resistances are at 300-320

This Weeks Trading Ideas

Hope you all  had a nice weekend.

Markets are slowly and steadily inching towards the high it made this year. Though the Big Brother Dow Jones is trading at this year high, our markets are lagging behind and may catch up this week

Some of the stocks which are showing signs of strength and will be on our radar are:

                                  Support                        Resistance

APIL                          540                          580-600
Jindal Steel &Power    680                                800

Dena Bank                   68                             80

Mid Cap IT

Yesterday Mid Cap IT stocks moved up. KPIT, Nucleus Software, FSL and Moser baer have showed signs of up move after long consolidation.Dollar is expected to rebound on a short term time frame.

Moser Baer has support at 78 and resistance is at 95-100

Sectoral Relation ship and Baltic Dry index

Yesterday Baltic Dry Index bounced back. This is an index which tracks shipping freight rates on real price basis ( no futures trade). Most of the cargo demands come from transportation of crude oil, iron ore, steel, copper , agri commodity etc.
Therefore- shipping stocks had a field day yesterday. One should be quick to relate it with the above mentioned commodities- Sesa goa, Gujrat NRE Coke, sterlite also moved in tandem with shipping sectors.
What Is The Baltic Dry Index?

Despite the name, the Baltic Dry Index has nothing to do with markets in Lithuania, Latvia or Estonia. Instead, it’s all about the cost of shipping major raw materials. Like iron ore, coal, grain, cement, copper, sand and gravel, fertilizer, even plastic granules.

The value for the index is determined by the London-based Baltic Exchange, which traces its origins back to 1744. Each day, the exchange canvasses hundreds of brokers around the world for price quotes on moving goods. For instance: Shipping 100,000 tons of coal from South Africa to Japan, or 50,000 tons of iron ore from Australia to China. It then aggregates the quotes to form the Baltic Dry Index.

Basic economic principles of supply and demand explain the significance of the index…

The supply of cargo ships is tight and inelastic. It takes roughly two years to build a new cargo ship. And the high cost of each prohibits docking ships during slow periods. In other words, a change in cargo rates does not change the number of ships in operation. So even the slightest changes in demand for shipping raw materials results in a change in the index.

And because the index tracks the cost of shipping raw materials – the precursors of economic output – instead of intermediate or finished goods, it provides a precise and rare measurement of the volume of global trade at the earliest possible stage.

A sharp move up, means global trade is increasing. Conversely, a sharp move down, means it’s decreasing. Since global economic activity ultimately influences the equity markets, sharp moves in the Baltic Dry Index often predict and precede similar moves in the equity markets.
Of course, there are other reasons to favor the Baltic Dry Index over other leading indicators, including:

No room for speculation, Not subject to revisions,An inability to be manipulated,Real-time, daily updates

You can see its chart and alo compare it with charts of Gold, crude Oil , CRB Index and may other commodities by clicking on the given link

http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
The funny part of trading is that sometimes these relationship work and some time do not.

Power Sector Buzz

Some of the stocks from power sectors had a nice move yesterday.

GVK Power looks interesting with supports at 47 and next resistances are 55-60.

Association Of Technical Analysts , India

We often get emails from the readers about any certified course on TA.
ATA is India's meeting place for technical analysis of financial markets.

One can contact them for getting a certified course in Technical Analysis

Interested traders can visit the website :


http://www.taindia.memberlodge.org/

Or they can write to india1.ta@gmail.com for detail information.

Meet the high-tech traders making millions

Secret software is helping a new breed of high-speed traders get really rich, really quick, writes Michael Evans.
You can read the story by clicking the link:


http://www.theage.com.au/technology/biz-tech/meet-the-hightech-traders-making-millions-20091106-i1ri.html

Ride the move

When other were fearful we were greedy and picking our stocks at lower prices. Now its time to ride the move.

This is how swing trading , chart patterns with little analysis of the market environment are used for trading but mind you market may prove us wrong therefore, we use our stops and sometimes market may move in our direction after hitting our stop price. One should take all these in ones stride. There is no holy grail in this market. We all have to learn it and practice it.

Ride the move.

Power of Charts

If you remember in our October Post we discussed about the trading with Guts vis a vis Mechanical Trading and presented charts of two stocks; Torrent Power and Mcleod. Both are still going strong and did not tank much during the recent melt down.
http://swingtradingideas.blogspot.com/2009/10/mechanical-trading-and-trading-with.html

Its another way of judging your stock, its known as relative strength. It is a very usual observation- what your stocks did with the markets? Did they go down faster than the market or stood firm. This relative strength is not to be confused with Beta of the stock. In fact it can be loosely compared to Alpha of a stock.

Our this weeks Ideas are : Aptech Ltd Support 166, Resistance 213/220, Harrison Malyalam Support 100, Resistance 138 and Andhra Bank Support 109, resistance 130/ 150 .

Aptech was hammered down and may bounce back. Bank of India is another stock which has been butchered a lot. Lets see how these two beaten down stocks behave this week.

The Dynamics of a Trader’s Mindset

Lets see what Market Club - Trades blog has in store for us

In this presentation, Mark Douglas explains the dynamics of the trader’s “mindset” at a very fundamental level. You will gain a comprehensive understanding of how you must first learn to think like a trader before you can fully utilize your technical or analytical abilities.

http://club.ino.com/trading/2008/07/saturday-seminars-the-dynamics-of-a-traders-mindset/

Weekend Reading

What are the traits of a successful traders ?
Toni Hansen, Full-time trader and mentor sharesher ideas .
You can read the article by clicking on the given link



http://www.tonihansen.com/trading-lessons.html#traits

Have a nice weekend.

Our strategy has paid

We kept our rule very simple.
We identified that its a bull market and did what one should be doing in a bull market - buy on dips.
Trading should not be based on too much analysis as too much analysis leads to paralysis.

Today is time to book profit for weekend . Our ideas about PSU bank- Dena and Allhabad bank , Biocon , Nagarjuna Const, JSPL worked well.

For next week some of the swing trading ideas are;

BHEL Support 2140 , resistance -2360/2530,

SAIL - Support 156 , resistance 180-195.

GSPL- Support 80, resistance 100-110

Trading is fun only if your monthly expenses are not dependent on it.

Have a nice weekend ahead.

Where GOLD is headed ?

You can read what Jim Rogers has to say about GOLD.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aDAX9iFoOy7E

Dollar Weakness?

Fed has keep interest rate unchanged and this made Dollar to dip further. It will have positive impact on commodity . But it remains to be seen how commodity demand picks up in near future .

As long as Nifty is trading below its 50 DMA (4870)one should trade light with less quantity and be quick enough to take profits.

Jindal Steel and Power looks interesting as it did not tank much during the recent melt down . It did not dip below its 50 DMA , 608 is acting as strong support and resistances are at 685 / 735 . If its able to trade above yesterday high of 650 it will gain further strength.

Do you want to trade stocks for a living?

Hope you will find it interesting.


http://www.swing-trade-stocks.com/trading-business.html

PSU Banks on watch

Dena Bank is finding support at 54 and Allhabad Bank at 108 with possible resistance at 65/70,126/ 130 respectively.

Of late, PSU Banks have been hammered a lot and showing signs of catching up with the original trend

Road to recovery?

We have had a three week of corrections. Going by history time wise it usually takes 4-5 weeks of time when corrective phase gets over. Are we in bear market ?? The answer is no . Technically speaking, as long as Nifty is trading above 200 DMA we are in a bull market. This is a basic thumb rule which we follow.

Now the premise is clear that its a bull market. Now next question comes , what should one do in a bull market ? The answer is buy on dip.

These corrections offer opportunity to buy. One should be doing some cherry picking in quality stocks in small quantity .


Bio Con has found support at 100 DMA at 230 . If this support is held then the stock can retest 260-280 zone.
If Nagarjuna Construction is able to trade above 153 then it may move up to 170-180 zone.
Gold is back to action again.If you remember we posted Louise Yamadas view on Gold.

Learn a new thing everyday.

Dennis Gartmans Trading Rule- Must Read

Trading rules from great traders are always worth reading. If you spend some time to understand the concept behind each trading rule this will improve your trading skills and take you to the next level.





Dennis Gartman’s Trading Rules List

Posted using ShareThis

Support Zone for Markets

The last week in the markets have been very wide in range, and volatile too. This makes for an emotional environment, and it is often best to step aside at times like this and wait for a lower risk environment. The markets are quickly becoming oversold and approaching what should be strong support levels, so it may be that a snapback is soon to come.
Nifty 100 DMA level is 4630 . Instead of making a futile exercise of where market would find support its wise to find a buying zone . For us it is 4500 ( if Nifty reaches there ) . Another way is to pick up good stocks with 25 % quantity and keep on adding as market moves in our favour.
As long as Nifty is trading below 50 DMA ( 4859)the short term trend will remain down.


Canara bank is a buy only if it trades above yesterday high of 352 with stop of 335 for a possible target of 375-396.

From FMCG stable HUL looks interesting.
Hope you all had a nice weekend.

Time to revisit some Technical Indicators

 

Trading holidays can be used to learn about some indicators.

 

Indicators are used as a measure to gain further insight into to the supply and demand of securities within technical analysis.

Pl click thr link to know more...............

 

http://www.investopedia.com/slide-show/tools-of-the-trade/default.aspx

 

 

 

One should also keep in mind that most of the indicators are lagging indiactors.

 

have Fun !

Weekend reading- Article by Robert Shiller

Robert Shiller is professor of economics and finance at Yale University

Many appear to think that the increasing complexity of financial products is the source of the world financial crisis. In response to it, many argue that regulators should actively discourage complexity.
This article can be found at:
http://www.ft.com/cms/s/0/c4a74ba2-ab83-11de-9be4-00144feabdc0,_i_email=y.html
"FT" and "Financial Times" are trademarks of The Financial Times.
Copyright The Financial Times Ltd 2009