Food for Thought........!

[AW10]

Dear S S,

wrt the sentiment of the above mail, I am posting a small poem (recd in inbox, copy/pasted here.)

"WAQT NAHI"

Har khushi Hai Logon Ke Daman Mein,
Par Ek Hansi Ke Liye Waqt Nahi.
Din Raat Daudti Duniya Mein,
Zindagi Ke Liye Hi Waqt Nahi.

Maa Ki Loree Ka Ehsaas To Hai,
Par Maa Ko Maa Kehne Ka Waqt Nahi.
Saare Rishton Ko To Hum Maar Chuke,
Ab Unhe Dafnane Ka Bhi Waqt Nahi.

Saare Naam Mobile Mein Hain,
Par Dosti Ke Lye Waqt Nahi.
Gairon Ki Kya Baat Karen,
Jab Apno Ke Liye Hi Waqt Nahi.

Aankhon Me Hai Neend Badee,
Par Sone Ka Waqt Nahi.
Dil Hai Ghamon Se Bhara Hua,
Par Rone Ka Bhi Waqt Nahi.

Paison ki Daud Me Aise Daude,
Ki Thakne ka Bhi Waqt Nahi.
Paraye Ehsason Ki Kya Kadr Karein,
Jab Apane Sapno Ke Liye Hi Waqt Nahi.

Tu Hi Bata E Zindagi,
Iss Zindagi Ka Kya Hoga,
Ki Har Pal Marne Walon Ko,
Jeene Ke Liye Bhi Waqt Nahi.......



If you feel its @ the wrong place, pls do let me know, will edit the post ...

Sahi Murtaza bhaijan. kya poem chipkaya hai (copy kiya hai) idhar par..
Makes lot of sense.. and specially if one is stuck in corporate rat race.

Main theme of this poem is the reason for me to get into trading (specailly options trading) I believe trading can give me that time to spend with myself, my family, friend and ofcourse the money to pay the bill.

Thanks for sharing nice poem which has become part of my Trading plan appendix.. to remind me once in a while about what not to do..

Happy Trading

 

[arnav_rulz]

Aankhon Me Hai Neend Badee,
Par Sone Ka Waqt Nahi.
Dil Hai Ghamon Se Bhara Hua,
Par Rone Ka Bhi Waqt Nahi.

the topic name is Food for thought.. I think this poem should be on the first page

 

[S S]

Hi!

So the Nifty crossed over the trendline and went under it. In my opinion, here after, the trendline has no significance whatsoever for the future to come.

Now the question is, what is the fresh target for the Nifty in the current falling market? As usual, difficult to say. But let us try to tax our brains and do some kind of brain storming.

In the recent past, the larger channel that the Nifty had was from about 4700 to about 5200. Friday’s close has taken Nifty to almost near it’s bottom level.

So, the fall from the high of about 5182 on 20th Oct to the low of Friday 30th Oct of around 4688 is a fall of about 500 points on the Spot Nifty.

If we assume that the larger channel of 4700-5200 still exists, because although the low on Friday was 4688, the close was around 4713, making it appear that 4700 held as a support, there should not be any further fall.

But that seems difficult, because the Dow Jones had a worst slide down on Friday, that shall get reflected in the opening sessions of the Asian markets, including Singapore, which will push the Nifty Futures down there. Psychologically, Nifty shall open weak on NSE on Monday 2nd Nov.

The OI on Nifty Futures has been increasing continuously for last few days. In the current scenario, the Nifty Future holds the key. If one keeps an eye on the intraday OI for Nifty Futures, any major reversal shall indicate the bottoming out of the markets.

But the question still remains. What are the levels likely, when Nifty shall have a reversal…. may be a temporary one? But before that …………….!

Here is a Real Food for everyone’s Thoughts………..!

See the WEEKLY chart for Spot Nifty…. and are you thinking, what I am thinking

It is extremely possible that the weekly candles may [repeat, may] have a similarity to complete the Cup and then the Handle in the times to come.

This we could keep at the back of our minds. It is essential for having some judgement for the future. But that would not help us for the problems and Nifty levels for the near future.

On the daily EOD chart for Spot Nifty, if the fall continues, it may first try for the week target of around 4550 and if that target does NOT hold, Nifty may even fall to 4380 levels.

In the event of a reversal, Nifty may try to recover to get into the mini channel of 4935-4990.

In short, in the near future, Nifty appears to remain below 5000 mark for some time to come.

These targets mentioned are based on the chart positions at the close of the markets on Friday 30th Oct 09, and are likely to change in the future to some extent.

One thing is extremely certain, though. At whatever levels that Nifty reverses, shall be the Best Buy levels for the future times, and are NOT likely to be reached in the times to come.

My opinions and I could be wrong.

Cheers!
SS

 

[S S]

Hi!

What do we see on the daily EOD chart for Spot Nifty?

The fall from the high of about 5182 on 20th Oct to the low of about 4538 on 3rd Nov 09 is being retraced with the first target of around 4860 at 50% retracement and the later at 61.2% retracement level at around 4935.

So far, we have reached around 4800 mark with the 10 DEMA currently at around 4790. Situation is once again leading to a dilemma.

In the event that nothing negative occurs and the markets remain above this 10 DEMA marks, then it surely will act as a good support. But if the markets open weak to come below 10 DEMA mark, it shall push the markets further down.

However, even if the markets go down, they should at the most go upto 4685 and if that breaks, upto 4650, which shall be the 50% and 61.2% retracements of the rise in last 3 sessions. Thereafter, markets are again expected to rise to head 4900 on Spot Nifty for the following reasons –

The closing of the OI for Nifty options in the diminishing values is –

4600 PE-4700 PE-4500 PE-4900 CE-4800 CE-5000 CE-4700 CE-4800 PE

This could be de-ciphered as follows :

Extremely strong support exists in the 4500-4700 band whereas extremely strong resistance exists in the 4800-5000 band. So, in the event the volatility remains low, Spot Nifty may even keep fluctuating between 4700 and 4800. Breakout on either side has no meaning, unless Nifty either goes below 4600 or goes above 4900.

At Friday’s closing position, both these positions appear to be evenly balanced. So, the markets may float un-decisively, till some good or bad news is available to spark of the move in upper or lower direction.

And having said all this, I still am of the opinion that buying on dips shall be lesser risky than selling on rise….. but for positional traders and NOT for day trading. Ideally, risky trader may sell Jan 2010 contracts for 4700 Puts on dips. In my opinion, Jan closure could be well above 5000 and only negative point would be to keep the margin money blocked. One should never buy many lots in one go. Buy few, wait for the dips to add more.

During this period, if the Nifty, for some reasons dips below 4500, then squaring of these contracts shall be utterly foolish. Jan 10 is the month when the whole market is expected to rise, and the option premia, currently around 225-250 could be pocketed at the cost of the deposit of the margin money. However…!

Every time that the Nifty goes to 4700 in a downward movement, one must short Nifty Futures to cover the Puts sold, or else, it may turn out to be extremely risky. Such shorts on Nifty Futures should be squared off appropriately when upturn gets confirmed.

People who have never involved in selling options should not try this. It would only result in making high level losses and hence blaming me for no reasons.

On the Gold front, I wonder as to how traders could continue analysing the scene on the Gold rate in US$ per Ounce. When converted into INR per 10 gms, this rate has two components. First the genuine fluctuations in the Gold rate and the other, fluctuations in US$-INR rate. The only advantage for US$ per Ounce analysis is the trend decision, which anyway is upwards. Therefore, before by next Diwali, we could expect the gold rates in India to cross Rs 20,000 per 10 gms.

Inflation is here to stay and all rates shall be on the increase. So shall be the Stock markets, Gold and Crude markets…… and so also the Job market in India.

In short, no matter what happens on the world front, India story seems positive. The only danger, if any, is repetition of incidences like 9/11 or 26/7, that may make the markets dip considerably due to fear….. which is true for all the time to come.

And that, is what is my opinion, and I could be wrong.

Cheers!
SS

 

[S S]

Hi!

Usually, the people in the Equity markets care about two numbers for any stock that they are interested in.

1. EPS or Earning per share during that financial year
2. PE ratio, which is the ratio of prevailing Market Price to Earning per ration.

While we find that the PE is far more in case of Private sector banks with respect to that for the PSU banks, we do not believe that the Private Banks are over-valued.

This is because of the obvious reasons. When the earnings are more and earning capacity is also more, the PE is going to be higher.

Something similar appears to be in the case of the markets….. Indian and the World over.

If we see the Dow Jones Weekly chart below, we find that the fall from the high of 14280 in Oct 2007 to the low of around 6440 in March 2009 has been retraced only to just reach to 50% levels.

As against this, if we seen the Weekly chart for Nifty, the fall from the high of around 6357 in Jan 2008 to the low of about 2250 in Oct 2008 has been retraced by over 61.2% levels.

While the American markets started their downfall in Oct 2007, the Indian markets were still on the rise, and the Americans were calling the Indian markets Overvalued. Their Indian followers and self styled experts continued to support the same dialogue on various TV channels.

Once again we are at a similar position. Once again the Indian markets are doing far better than the American markets because the economic growth situation in India is better than that in the US. The growth target for Indian economy is in excess of 6% and almost nearing 7%, which is likely to be met in the current Fiscal year. The growth target for the US is less than half the Indian target.

So, comparing this info with the PE for the Private/Public sector banks above, it is evident that Indian markets shall continue growing faster, which the American analysts are unable to digest, and shall once again start calling as Over valued markets.

And inspite of the bad monsoon and recent calamities in the southern part of the country, including Maharashtra, the Indian markets are still firm.

Therefore, the Nifty should now head for it’s next Target of around 5300, but again, not I a straight line, but in sub-waves.

That is my opinion and I could be wrong.

Cheers!
SS

 

[DanPickUp]

--------------------------------------------------------------------------

 

[S S]

Hy S S

May I aske you too, what kind of plattform / chartingsoftware / data feeds do you use ?

Regards

DanPickUp

Hi DanPickUp,

There was a time that I too used to think of asking similar questions to others, but never asked. Instead, I decided to use the beautiful facility each of one has now-a-day…. the internet, to surf and find answers.

But there is nothing wrong in asking these questions, though.

Now to answer your questions –

1. Today, almost all brokers are providing good trading software, that gives almost real-time data to their clients, and reasonably real-time order placing [but with a minor delay as the orders have to go through the broker’s servers]. For locational convenience, I had chosen two brokers some 6-7 years ago, and I am continuing with them as of now. India Infoline’s [or 5 Paisa’s] Trader Terminal and Sharekhan’s Trade Tiger.

2. A broker friend of mine had purchased Amibroker, and was kind to share it with me. So, I have Amibroker. Lucky, I guess !

3. Data feeds are available real-time for trading through the trading software but not for charting. And I do not use any real-time data for charting.

In the past, using many software offered for trial by the members of Traderji, I did make an attempt to have a real-time charting. But in a very short period, I realised that I was un-necessarily getting confused because I am not a scalper who hits an order every few seconds.

In addition, I stopped watching the experts and advisers on CNBC-TV 18, NDTV Profit, Zee Business, and other such TV channels, because I realised that the majority did not understand any technical analysis and everyone was stating one’s own view about the market….. well that is what my opinion was and even is, as of today.

Simultaneously, I stopped reading similar news columns in paper media, because many times the news item gave a view, exactly contrary to my findings and I would get confused.

That could be the reasons, that my thinking is in a tangential way, which opens very many likely options in front of me, and all I have to do, is to think and find, which one is more probable.

I too need some Food for my Thoughts

Cheers!
SS

NB : I know that to err is human and no human can always be correct. But as we are in speculative markets, we can as well speculate about the likely probabilities, based on proper analysis, which I try to attempt.

 

[DanPickUp]

--------------------------------------------------------------------

 

[S S]

Hi!

I was really in double minds, as to whether I should post any message this week end. As has been written so far, I do not expect a major change, and even if there is any movement of + /- 100 points of Nifty, that should be considered as trend change.

Last week, the markets behaved themselves reasonably well. The overall weekly candle stayed in the Green.

But now we must understand that there are about 5 weeks balance in this calendar year. And the inflow of foreign exchange is expected to start only in the next calendar year. So, during these 5-6 weeks, the market may take the last dip and then remain continuously in the uptrend in early Jan 2010.

Considering that between it’s low and the high, the Nifty spanned over a hundred points in Friday’s session on 20th Nov, it is possible that the dip that I am expecting in the next 5-6 weeks could atleast be of around 100 points or more.

In the event, this dip takes place next week, then we may see near 4900 levels in the time to come. And the next week is a settlement week where such market behaviour is possible.

But instead the candle for the next week turns out to be a Doji, then the dip may occur in one of the subsequent weeks. Which means that, in such an event, 5000 level may act as a strong support for Nifty.

There is yet another point one must remember.

While the Gold is on the up move, many investors hesitate to go out any buy the 99.999% certified pure gold available in the market. Some of them, who have inclination for investing in Gold, and have no trading account for commodity trading, can invest in one of the exchange traded Gold funds available. The price of units of these funds fluctuates in line with the market Gold rates, and it avoids the physical buying and selling of the pure Gold coins and biscuits.

The INR-US$ rate has made the INR reasonably strong. But many are of the opinion that in an year’s time, the US$ may come down to the level of Rs 42 per US$. If that view is hypothetically accepted, it means that there is going to be a large foreign exchange inflow in the year to come, which definitely shall not only benefit the markets, but also take them higher up to the previous all time high levels, or even more.

Markets shall slowly move from Trader’s haven to Investor’s haven.

That is my opinion, and I could be wrong.

Cheers!
SS

 

[S S]

Hi!

During the last week, once again the markets proved that the chart is the horoscope of the things to happen the world over. When I wrote about the possibility of the Nifty going to 4900 or below, little did I know about the Dubai Crisis that cropped up later last week.

I feel bad, that I have the opportunity to understand charts for last five years only, and I do not understand them well. I am already a senior citizen, and learning new things and remembering them, is a problem. I sincerely request the young readers using charts, to think beyond what is visible and try to interpret the charts, without considering the incidences happening around you. The chart will automatically take care of it.

Now if we check for what happened in the past, we find that -

During 2008, the Spot Nifty reached it’s all time high of 6347 on 10th Jan 2008, but it dipped to it’s low of around 2250 on 27th Oct 2008. So, the markets were consistently on a down trend during this calendar year.

For the current calendar year 2009, the low occurred on 6th March 2009, when the Spot Nifty went to the low of around 2540. Thereafter, till last week, the Spot Nifty reached it’s high, which was around 5182 on 20th Oct 2009, and the market was more or less on a consistent up trend during the current calendar year.

So, at present, if we consider the recent past activities, one would find that due to mis-guiding from the self styled experts appearing on many TV channels, the investors were confused. Although the up trend existed and there were mini rallies, each time many investor-traders found themselves getting late into the market for investing, and as a result, missed the bus.

But now, if we consider the next three months, ranging from Dec 09 to Feb 10, we find that a final dip has occurred last week, and the month of Dec 09 may continue sideways, after which an uptrend shall prevail again.

The weekly chart shows the Cup and the handle is almost getting completed. Thereafter the markets should go upwards.

We also know, that like most of the earlier years, there is a strong chance of pre-budget rally in the early part of next calendar year. This time may match with few weeks after the completion of the handle.

Therefore, at this moment and from the chart indications, it appears to me that the Budget may be liked by the market and Nifty may go beyond 5500 level, as it appears at this moment, but may or may not change later.

But not that every trader-investor is in full time operation every day and not that every trader-investor shall keep buying on every dip and keep selling on every rise.

Such persons can think of now buying Nifty futures for FEB 2010 on every dip and continue accumulating till the pre-budget rally is over and then liquidate the holdings. To play safe, one could book partial profits by selling small quantities here and there when the Nifty tops-up and turns down for a day or two, in some of the sub-waves.

But that…… is my opinion, and I could be wrong. It is your money, so think and take decision suitable to safety of your money and also of you yourself.

Cheers!
SS