I can help you with stock chart reading

Mangalam Cements has broken out on high volumes (for 4 days). What might be the perspective next week. Can I enter in this now, or go short

bindalagro:@ 33.20
-- Uptrend is there. I don't see any negative.

balramchini:@ 87.5
-- I don't like the stock at the current price level. Downtrend is still intact. See weekly chart for 1 year. Since there is volume, give it a chance with a stop at the low of last 3 1/2 months. Should be around where U bought. So, nothing to lose if U held on to the position. 120 is the resistance.

chlorideind: @ 45.10
--Couldn't get it in icharts.in

hmt: @ 87.75
--Above the down trend line, which touches at 70 (look at weekly with 1 year span). I would have liked better price action. Narrow price range above short term ema (8 or 10 or 13) makes me nervous. Sustainability of such price action is hard. Other than that, stock looks ok with good volume. Try to have a plan for better entries.

Itc: @ 183.10
--This stock has been such a failure. It was a leader in the bull market before May. After that, there was initial leadership. Then, sleeping all through. Test your patience!!!

sakhtisugar: @ 127
-- I don't understand why U bought. Can U give me the reasons. Its in clear downtrend. U can say that looking at the chart from any distance. 3 times it failed with resistance from 50 day EMA.

kotharisugar: @ 19.75
--Nothing impressive. Again, give Ur reasons why U bought. In any case, U are in 3 sugar stocks. If sugar goes down, U go down by 3 times. Why so much exposure. Why not choose the best sugar stock and put all the money in that stock. Atleast U save the commission. In future, limit 1 stock per sector.

Very nice chart. Perspective for next week. Market indices (Sensex & Nifty) have been up for a 4 days with good volumes. They are in overbought condition with some price resistance. Ideally, I would like them to go past the resistance and then pull back. Still nothing is lost. I am still bullish on the market.

Mangalam is in uptrend. Either U go long or stand aside. Since its overbought (U don't need an indicator to tell), ideally U would wait for it to pull back before U enter.

About shorting, I have seen Kirk (www.kirkreport.com) shorting Gold when it was its peak. His reasoning at that time was that its in overbought condition and in day or two traders will take profits. He lost money several times and gained some. And its true that there are high chances of Mangalam pulling back. But, its a hard play only professionals can handle. Can U handle it? I have never done it myself. Further, do you have this kind of trade as part of Ur trade plan. Having as part of the trade plan matters. Because, if U don't and U take this trade, U may lose and go away thinking it won't work. Having it part of plan will make U trade similar trades again and again. That will give U results that U can compare and improve on. My suggestion is to not do it.

Kirk Track Record
http://www.kirkreport.com/portfolio2006.html
See how he shorted GLD on bigcharts.marketwatch.com based on the trade date

May 18, 2006:
- Cover 1000 shares of GLD at $64.88 (cost was $65.81): profit $930.00 (+1.4%)

May 18, 2006:
- Cover 4000 shares of IWN at $71.32 (cost was $72.45): profit $4,520.00 (+1.6%)
- Cover 5000 shares of GLD at $67.50 (cost was $68.71): profit $6,050.00 (+1.8%)

May 4, 2006:
- Cover 1000 shares of GLD at $66.99 (cost was $66.53): loss $460.00 (-0.7%)

May 2, 2006:
- Cover 1000 shares of GLD at $65.76 (cost was $65.55): loss $210.00 (-0.3%)
- Sold 300 shares of PEIX at $36.94 (cost was $33.00): profit $1,182.00 (+11.9%)

April 25, 2006:
- Cover 1000 shares of GLD at $62.63 (cost was $62.91): profit $280.00 (+0.5%)

April 20, 2006:
- Cover 1000 shares of GLD at $61.09 (cost was $63.10): profit $2,010.00 (+3.2%)

Hats off to you....
what keeps u motivated?


Best Regards
Coool.

2 years back I realized I loved trading. Trading is something I never get bored. I can take a trading book and read several chapters in a row. I look at charts of stocks one after another. I can and I am doing this day in and day out. Still I am not bored. So, that keeps me going. Everyone should find in their life some kind of interest. I think I found that interest in trading. I will see how long it will last. Having said that, I am taking a break from this thread for next couple of weeks. See U later. Good Luck with your trading.

Yes VV
Thats very clear from the way u answer the queries. I never miss one from you.
Please comeback soon.
Best Regards
Coool.

VV,
Have a good time on your holiday.
Rgds
Kuldeep

Hey VV,
1000+ by no means a small task & you really need a break.Enjoy the same.But i wonder whether whether u could really take yr mind from seeing the quotes.
Reg yr pleasure from trading,i fall in line with you.I am 58+ & still enjoy my trading.
see you after yr return.
ranga

Have you thought on this?
These are not contrary views, just a food for a thought.

Entry:

Your one of the filter criterian for the entry in the stock:
stock having 8EMA > 50 EMA. ( I am not saying it is right or wrong.)

- 8 trading days means apprx 2 weeks. 50 trading days means apprx 2 months. What is the relation of price and volume during these 50 days and last 2 weeks?
- Does chart talk to you?

You can find many of filters. e.g. 2 months high, 20 day breakout, 10-20-30 set up etc etc.

In software terminology, these filters are nothing but wrappers over P/V relation.
A relation between price and volume is the most important factor.

If one uses filters ignoring P/V then it is just like driving a car without understanding how the car works.

Only thing where filters can help in is to provide a psychological check.

Initial Stop:

Volatility based stops work better in trend following system. Volatility based stops are prone to drawdown. During the drawdown, the equity at risk has to be adjusted.

Most of the time stock/market is not trending. If one wants to succeed in trend following then one needs to look at multiple markets. To do all this, it needs tremendous descipline. That is what famous TURTLES did.

Do you sense something? Are you drifting away from swing trading to trend following?

Exit:

What if stock is trending?

What if stock is ranged?

What if there is a stiff resistance on higher time frame?

Position size:

Let us say R is a initial risk.
If one is already having a postion in the stock then,

if profit reaches to 1R,
should we add another pie of position?
should we book half of the profit?

Expectancy:

E = % of win * avg money win - % of loose * avg money loose.

How E can be greater?

These thoughts are just like fuel to propell you further.

£

VV u really do a great job here. I get to learn so much on weekends from this forum. This place is really great.

Thanks to all, who make traderji a wonderful place

timing is most accurate sire...in your charts & in this thread, guess its time for all of us to take a break...pretty eventfull 6 months huh