Some Good Steals...

Shaadi Mubaraq Ashish!
Aaj bhi yaad ate hain wo din... jab hum azaadi se masti karte the,
ab to bas wo hain, wur unki belan hai....
(Thank God! I am a bachelor )

Hi Ganesh...sorry if I may have missed something, but will go into the back pages and answer all pending queries. There are a few.
Thanks.

Hi,

Some time back , I had querried about GTL. Now, GTL has started going up. You have recently mentioned that GTL is picking up. My query is as under :

GTL is bifurcating its assets into 2 portions. onr portion is profit making investments and another is slow moving investment. This will deplete the Capital base of the parent company. so after division they will allot shares of another new company which will be a slow mover in the market. The portion of capital making earnings will have been reduced and its price also would go down subsequently. Is this rise real or make believe ? Recently , there was big volume and it looked to misguide public, this has been planned. Please throw light on this.

Hi Amit,

Sorry using your thread for a personal reason but it is so widely visited and seen by everyone so i thought it could attract a little attention to a thread i have posted in the technical analysis. I did not want to post it here as it would be irrevelant on this thread. I would appreciate if your goodself and other learned members coould take some time out and see my thread and answer a few queries.

Rgds
Rahul

Hi Amitda !!

Gr8.. never knew u were gud at shayari as well..
thought it was just stocks..

Ashish, all the very best !!

cheers
vizzie

Hi Vizzie...that was of course not my shayari, but from Hasrat Jaipuri!

Stocks and the markets...these are bread and butter and only done for material gains besides some intellectual stimulation.
There has to be more to life, yes?

As Faiz Ahmed Faiz, one of the greatest Urdu poets ever, would say:

Aur bhi dukh hain zamaane main mohabbat ke sivaa
Raahatain aur bhi hain vasl ki raahat ke sivaa...

Raahat= relief, Vasl= union, meeting (as with the beloved)

That's from one of Faiz's finest Nazms titled Mujhse pahali si muhabbat mere mehbub na maang.

Cheers Vizzie!

HI amit,

How are you? an interesting twist to your intelluctual image. I myself am interested in sufi but do not understand urdu a lot. but i keep going to see concerts like jahane khusro and other cultural events that keep happening in delhi. Are u based in delhi too?

Regards
Rahul

Hi Rahul...great to know you are interested in Sufism.
Isn't it the most beautiful way of understanding life and reality in a spiritual way which shies away from all the discordant notes that a rigid following of most religious tenets would lead to. It makes love for humanity and the divine accessible in one go without separating the two.
I’ve lived in Delhi for several years in the past, and tried to visit the Hazrat Nizamuddin Durgah on Thursdays when there was Sufi music performed.

On to mundane matters.

I’ve seen the thread you’ve started under Technical Analysis, and the issues raised there.
1. Yes, when calculating weekly or monthly SMA you’d use the weekly or monthly closing prices.
2. As to the question on time periods, this depends purely on one’s trading objective.
Firstly, SMA work best when a scrip is trending and is ineffective when it is moving in a trading range, as far as entering a trade goes. In fact they are used to establish whether the move is trending or not, and if so, whether the trend is down or up. This can as easily be seen by observing the price chart too, of course.
Now, for using SMAs for making trading decisions, it should be clear that smaller the time unit the more signals would be generated. Meaning, short tome frames are more sensitive to price change. This may suit short term trades.
But then, the issue is whether a sensitive short term SMA is reliable.
A short and sensitive setting would generate more buy/sell signals, but there would also be an increase in false signals leading to whipsaws.
Longer time settings would generate less signals, but they would be more reliable. On the other hand, being less sensitive, the time lag would increase and the signal would come after the trend is well on its way. That’s a tradeoff one has to weigh and measure.
I personally don’t use moving average crossovers for entering trades, but on the price chart I have three settings for SMAs: 20-50-200. I don’t often enter short term trades, and since I try to catch the whole of the move, these help in locating the current price in relation to the time periods.

There is no such thing as ‘Indian stocks’, as stocks are stocks anywhere.
What one has to look for is the historical volatility of a stock. One which is more volatile would require a longer time frame to smoothen out noise and volatility. A more sedate and steady scrip could do with a shorter time frame.
3. As to RSI settings, the logic would be the same as above, but conventionally RSI is not really used for longer time frames. Usually a 21-25 day setting is suggested for intermediate term readings and 7, 9 or 14 for short terms.
4. Understanding the workings of a formula for an indicator is as relevant as understanding the grammatical construction of a new language one begins to learn. They go hand in hand. One would better attain the workings of an indicator by also knowing what exactly it does and how.

Hope this has helped clear your doubts, and do get back for any clarifications.
Bye for now.

Hi Amit,

Thank you and as always very well explained with very good choice of words. Even I prefer to trade mid term to long term. What indicators do u use for entry points. My understanding so far is if the price chart moves above SMA it would be an entry signal but it could come down in the near future. How do u analyse and judge that it should have a long term hold. Also could you suggest any book which would explain basic indicators, what they mean and understanding the formulae. I am not too good with maths

Rgds
Rahul

Hi saamy..LG Balkrishnan should have finished with the corrective phase it was in since last November from 45 levels. The recent low at 29 late Feb looks like it.
It has moved up strongly to 38 area early this month, and now at 36 should be looking to consolidate, and this is an important area too.
A move above 40 -42 would bring it within reach of testing 45-46 where it has struggled in the past above which it's free to go. A close below 29 would be considered s/l.
Regards.