I can help you with stock chart reading

Discussion in 'Position Trading' started by vvonteru, Mar 21, 2006.

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  1. vvonteru

    vvonteru Member

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    I am new to this group. But have been trading for 2 years now. I do swing trading. I see lot of posts where they need suggestion on buy/sell. I can help.

    Give me a stock. I will tell you what to do - Buy/ Short (I don't know why some one would do now, unless if you are day trading) . Or If you are already in some stock and want to know whether to sell, I can help.

    I do swing trading. I like site: http://www.icharts.in/home/ to start with, which I got from this group. Please take a look at: http://www.icharts.in/breadth-charts.html. The market in the hindsight will have a deeper correction (more than a pull back). So, be carefull and have stops.
     
  2. harmads

    harmads Member

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    Hi..
    Good to have you on the forum. I have been into stocks for some time now though doing it seriously only for 6 months or so. I am not a trader but an investor though would like to do trading in small way. It is heartening to know you can help beginners. I would like to learn TA and other aspects of analysing a stock, how can you help. I will appreciate.
    I am holding following scrips as long term investment and would appreciate your comments on them :

    1. Godrej Consumer Prod @ 530
    2. Hexaware Tech @ 118.87
    3. HLL @ 187.31
    4. ICICI Bank @ 498.75
    5. IDFC @ 72.27
    6. India cements @ 89.88
    7. Indian Hotels @ 150
    8. Infosys @ 2806.93
    9. ITC @ 136.48
    10.M & M @90
    11.Marico @ 405
    12.Ambuja Cement East @ 40
    13.TCS @ 1648.09
    14.TISCO @ 100
    15.TITAN @ 150
    16.TVS Motors @ 101.15
    17.VSNL @ 379.66
    18.Wipro @ 463.96
    20 RIL @ 778

    I would highly apprecaite if you could give you opinion on these scrips and if any one needs to be gotten rid of.

    Thanks
     
    ABHIMANYU CHAUDHARY likes this.
  3. vvonteru

    vvonteru Member

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    WOW. Thats a long list. Hope you have stops for them and took some profits. If not, given the huge run in the market, any slight downturn, can make people jittery and leave their positions. Result, deeper correction and heavy losses.

    Now, trading and investing is different. I am a trader using TA. So, my suggestions are based on trading. I will have some detail analysis for first few stocks. Then you will get hang of it for others.

    1. Godrej Consumer Prod @ 530 - Great stock with great Chart
    Lets say, when you entered this stock, you placed a stop at 450 (below the recent base and taking into consideration the volatility of the stock and below its 50 day EMA). Right now, the stock is at 650. so, you had more than the risk run. I would take 50% off, and move the stop to 530 (break even). So, now you can let the stock run on table's (read others) money. As the stock moves up, move the stop. Make sure you put the stop below 50 day EMA, around 100 rupees (volatility based on price of stock) less than current price and below a recent base.

    2. Hexaware Tech @ 118.87 - Not a bad chart. With the current market, I would rather stick with stock pick 1
    Take the profits (50% or more) right now. It is making a double top. Previous top is from 2005 March. Remember. In TA, when you select a stock, look at the chart considering data from all years. Then compare the chart with the sector and the market. The reason I like stock pick 1 than 2 is that, stock 1 mimics the market more than stock 2. I did not compare with the sector. Ideally, the sector should also be trending. We want the momentum. We want the wind to sail easily. Avoid the harder stocks. There are so many easy ones like the stock pick 1.
    Having said the above, take 50% off table. Put the stop at 120. Safer stop would be at 100. But, if the market is selling sharply, I would move the stop to 120. If the stock breaks the resistence, trail the stop higher.

    3. HLL @ 187.31 - Good chart. Current 260. Has resistence from 2000 (but, you will keep stocks from 2000 till now waiting for it go to 260). Its more a technical sentiment.
    25 rupees volatility. Take partial profits and move stop to 180. As the stock goes up, trail the stop.

    4. ICICI Bank @ 498.75 - Not excited as others. No momentum in banks sector.
    I would take partial profits and move stop to 500. There after, trail the stop.

    5. IDFC @ 72.27 - Worst Chart. Get out of this stock. As I said, pick stocks that are in good (read Trending) sector and that follow market.

    6. India cements @ 89.88
    Good chart.
    Take partial profits. Move the stop to 120. Lets give some room as the stock has good momentum and then always try 50 day EMA now and then. 50 day EMA is around 140.

    7. Indian Hotels @ 150
    You already huge profit. If you didn't book it, you are acting as a pig (no offence). Remember the saying, Bulls make money, Bears make money, Pigs get Slauttered. Don't look at your paper money and be happy. Till you book your profits, you will see the money and then one day, you don't have it. Think stock trading as business. If you had profits in your business, will you continue to invest all the profits in the business?, or you will you take some and use it. I would move the stop to 900. In the next leg up, move the stop to 1100.

    8. Infosys @ 2806.93 -
    I like Satyam computers chart better than Infosys. Compare the two. Then, you will understand what I am talking about. Momentum & Clean Chart.
    Put a stop at 2400. When the stock goes up, your next stop would be 2800.

    I hope you got a hang of it by now. Any particular question about the stocks below, let me know. But, in general, you are picking good stocks and making right entries. Concentrate on the market, pick right sector and then the right stock. Take profits (always).

    9. ITC @ 136.48
    10.M & M @90
    11.Marico @ 405
    12.Ambuja Cement East @ 40
    13.TCS @ 1648.09
    14.TISCO @ 100
    15.TITAN @ 150
    16.TVS Motors @ 101.15
    17.VSNL @ 379.66
    18.Wipro @ 463.96
    20 RIL @ 778
     
  4. subratabera

    subratabera Member

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    Please tell me something about MOSERBAER. I personally think that it is a good scrip and will soon make its move. Want your confirmation...

    Thankyou

    Subrata Bera
     
  5. vvonteru

    vvonteru Member

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    Avoid this stock. Again. Market, Sector, Stock, Clean Chart. I know the market is shooting. I didn't see which sector your stock is it in. I don't have to. The chart is all over the map. Its like a heart beep. beep! beep! beep!.... Like Sine curve. Avoid those stocks. Ask yourself a question. Is the market doing the same. Market is trending at an angle 40 to 70 degrees. Pick stocks like that. Take some from harmad's pick. You don't have to reinvent the wheel. I like Godrej Consumer Prod. Wait for a pull back around 2 to 4 days. Make sure the market has also pulled back (distinquish between pull back and sell off). Go long with a stop 10 rupees or X amount based on the volatility (determined based on the stock price and how much average it moves in a day) above previous high. If you are interested, here are suggested readings on swing trading.

    1. Dave Landry's 10 Best Swing Trading Patterns and Strategies
    2. Dave Landry on Swing Trading

    To get basic ideas of stock trading, I would read
    1. Come Into My Trading Room: A Complete Guide to Trading - Elder

    More to read
    1. Reminiscences of a Stock Operator - Edwin Lefvre
    2. Trading for a Living: Psychology, Trading Tactics, Money Management - Elder's 1st book
     
  6. drvasurao85

    drvasurao85 Member

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    Hi!
    can you give your comments on JJ EXPORTERS.
    good activity in the counter.
    thanks
    rao
     

  7. rahulg77

    rahulg77 Member

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    Hi,

    How u doing? What would your view be on Riddhi Siddhi@173. JP Associates@490, IPCL@265, Colgate@412, Ankur Drugs@171. Almost all shares are down right now. :) what do u suggest.
     
  8. vvonteru

    vvonteru Member

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    JJ EXPORTERS - I couldn't find the scrip. What does JJ stand for. Or give me the symbol.

    Riddhi Siddhi, JP Associates, Ankur Drugs- Couldn't find the scrip. Give me the symbols.

    IPCL@265 - Buying high is a fool's game. When you buy high, what you are expecting is that another fool will come along and buy it from you at even higher. The guy who bought at pull back or at 50 day EMA will run all the way to the bank by sell the shares to you. You like that? So, next time, buy at pull backs or given the volatility of the current market, buy at 50 day EMA.
    Positive: Having said the above, hopefully the bad times are over. 8 day EMA has crossed above 50 day EMA. MACD is showing bullish. There will be slight pull back before the stock takes off.
    Negative: Trend line has been broken. It may depend also on the general market. Index is moving up. Stocks are not. See Advances versus Decliners chart comparision with Index chart.
    So what we do. We put a stop. Conservative - 230. You want to give some room, 220. All depends on the market and the sector in which this stock is in. Frankly, there are no enough tools to see the sector chart.

    Colgate@412
    Good chart. Be careful of the 50 day EMA. In this kind of bull market, stocks always test 50 day EMA and have high volatility. 50 day EMA for this stock is 369. I would put a stop at 400. Hopefully, the stock comes out of the pull back. Based on your risk (hopefull you thought at some loss, you would come out of the stock), take partial profits. Lets say, when you entered at 412, your stop was at 380 (base below previous pull back), your risk was 32 rupees. So, at 444, you would take 50% of profits, and trail the stop on the remaining shares. Hope you got the idea.

    sensex / nifty & software sector on the short side
    I couldn't see the software sector. Let me know of the tool you are using to see charts of sectors.
    About sensex & nifty for short. You can Buy, Sell, Short & Cover stocks. But, there is time to Buy, time to Sell, time to Short and time to Cover. Trying to pick top is a loser's game. Many tried that and lost shirts. Always first allow selling to happing first (I forgot something, Profit Taking. Do you know profit taking is different from selling?). Then, depending on the percentage of % drop (above minimum 7%. Conservative 10%), how much the stock has recovered, and based on the volume of recovery (volume must be low for recovery versus sell off), you would decide to go short.
    Ofcourse, there are other patterns (Double Top, Head & Shoulder's) under which you can decide to go short.

    I don't think charts are showing that. Sooner are later, I believe they will set up that patterns seeing the advances versus decliners chart versus the indexes chart.
     
  9. harmads

    harmads Member

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    Hi vvonteru ..

    Thanks a ton for your time..and advice.

    I have already booked profits ( as suggested by you) on all the veterans like TISCO,Indian Hotels,TITAN & M&M as these were my 10 year old holdings. Only from these earnings I have restared buying since Oct'05 (sensex level 7-8000).
    My main aim at buying (at the moment) is to invest in good stock for a long term (2-5 years) so that they give me dividents,bonus,rights and appreciation. Before buying I look at the sector, then company's products,its performance, owners/directors and their qualifications and finally its graphs.

    I do want to start day trading and before that I want to pick up knowledge of TA etc and would greatly appreciate any inputs in that respect.

    Best regards
     
  10. drvasurao85

    drvasurao85 Member

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