Some Good Steals...

Very often i think myself unfortunate as i did not come to know about this forum earlier.Amit, i really appreciate your timely, valuable opinions.I have 500 sunflag iron bought at around 24/ .I can hold it for medium to long term.What should be my strategy?Should i exit or hold it?

Hi am_investor...I'd say avoid it. The results are erratic and mostly in the red the last few quarters. Also IFB Industries has proposed to issue Cumulative Redeemable Preference Shares to financial institutions/banks on private placement basis in part settlement of their dues.
I didn't look into the techs...I wouldn't go with it at this time as there are all sorts of better possibilities around.

Amit

I have been watching Matrix Labs for a while now. On applying the Bollinger bands it looks ready for a breakout. It has a couple of resistance points in the 190's but beyond that it could go up to its previous high.

Please help me validate this analysis.

Also interested in your take on Tata Metalliks.

Thanks n regards
Kishore

Kishore

Iam holding Matrix for quite time. From August this has been moving sides ways. It has very stiff resistance around 200. Earlier two attempts to cross this had failed. Presently quoted at 185. The journey to 200 has two obstacles. Immediate resistance are 190 and 196.

Technically

Price ROC less than zero
RSI moving down
MACD is still bearish

Matrix is a good fundamental story. On a long term perspective it is good buy. Foe short to medium term it is an "avoid". Amit would love to hear your views...

regards

Karthik

Hello Amit

I am mentioning here my portfolio - please give your suggestions on it

Rolta @120
TCS @ 1030
Fin. Tech @ 1440
JP Hydro IPO @ 32
Bhushan Steel @ 206 (very small qty)

What are your suggestions on the above.

Will be very greatful for your advise.

Alok

Hi Kishore and Karthik...nice to see you again...
Kishore, it would have helped if you had reasoned out the reading you are taking off Bollinger Bands for Matrix.
Bollinger Bands are designed to indicate the confirmation of a trend and a measure of its volatility.
The price of a stock, represented by its 20 day Simple Moving Average, is enveloped by an upper and lower band, the Bollinger Bands. Some analysists take Exponential Moving Average in place of the Simple. The three, meaning the central price line and the two bands are derived from price action using different methods of computation.
Bollinger Bands is an indicator which lets us compare volatility and relative price levels over a period of time. The bands encompass a stock's price action, meaning its volatility. The upper band is the simple moving average plus 2 standard deviations. The lower band is the simple moving average minus 2 standard deviations.
There is a mathematical formula that is used to calculate the Standard Deviation of a stock over a given period of time. In other words, Standard Deviation is the measure of a stock's volatility over a given period. (This is very useful when determining the trailing stop loss levels also. In a trade when the price breaks below this level, meaning a more than expected volatility to the down, the s/l is triggered.)
The main feature of Bollinger Bands is that the space between the bands varies depending on the volatility of the price. When volatility is high, the bands become wide spaced to contain the high and low pikes. During periods of low volatility, the bands narrow down containing the price action.
Normally Technical asnalysts see two different aspects of price action from this indicator.
One significance of it is, when the price pushes against or transgresses the Bollinger Bands on either side, it would normally signify a continuation of the trend rather than a reversal. Even when the price pikes outside the bands, a continuation of the current trend is implied.
The other indication is of trend reversal.
On the one hand, when the stock price constantly presses against the upper band, it is thought to be overbought, and conversely when it clings continually to the lower band, the price is thought to be oversold. Thus an oncoming trend reversal is assumed and sell or buy signals generated.
On the other hand, let us assume that the upper and the lower bands are seen as price targets. If the price bounces off the lower band and crosses above the 20-day average, the middle line, the upper band would represent the price target, going by the historical volatility of the price.
In a strong uptrend, the price is assumed to fluctuate between the upper band and the 20-day moving average. But here, should the price break the 20 DMA to the down with force, it warns of a trend reversal to the downside.
Conversely, a similar price action in the midst of a down trend would signal a reversal to the up.

Coming to Matrix, the distinctive feature of the chart is that it is more erratic than volatile, though moving sideways mainly. The point about the erratic is primarily a visual reaction rather than a tech conclusion: The bands are rather wide, with the erratic middle line.
As Karthik has pointed out, the impression is bearish in the short term. The resistances seem correctly described too.
I would like to see the Bollinger Bands contract and become narrower for a period of time. The implication is a marked drop in volatility, the precursor to a breakout.
Would love to get your feedback.
Regards.

Wow...Amit ..you continue to amaze me ... One of the best and simplest explanation of Bollinger band..Thanks

warm regards

karthik

Hi Amit ..

are u still following Gammon india!! has seen 440 levels than corrected a bit..and today was trading around 390 range... so should i enter at these levels or wait for some more correction? any target for gammon u have set?? pls help...

Thanks u and all seniors 4 great support.

hi amitbe,
what are the levels of small cap index one should look for getting in the small cap stocks. how much downside can one see from now or is it the right time to invest in small cap.

Thanks Amit Good to see your thoughts flow as i read the thread.

With respect to Matrix, if you notice the last 32 periods the volatility has been lower than in the past. Matrix traditionally bounces anywhere between 182 till 196 and all this could happen in a single trading day.

However currently the bands are approximately 50% lower than normal indicating a higher probability of a sharp increase. The RSI is around 43 (which is on the lower side). This made me think that it could be on the verge of a breakout.

I am better informed now, Thanks Amit.

Best regards
Kishore