Market Internals

learningcurve · #**131** 23rd September 2007, 12:00 PM

Quote:

Originally Posted by sunil saranjame

Hi lc,

A. You are correct. SMA's are used to remove the noise. The crossovers can be used to generate possible entry/exits ie say a long term or an intermediate term investor can synchronize his exposure accordingly. I am working on a much larger data, but to download the data from SEBI, clean up, then throwing the data into Excel is a chore! Also,in a short time I will have Amibroker, then I will have some fun.

B. One reason for using short term SMA's is that my data for FII/MF is only from January this year, and the data for A/D, AB50, and 20 DHL, is from June this year.

Oh, forgot about the A/D trigger line. Again, can be used for entry exits for traders, but needs a lot of trimming and experiments. Again data is too sparse right now. Maybe by next year, we will know how to use this, and with our seniors here who have expertise in coding etc, I don't have any doubts, that some day we will be able to put this in good use.

Regards,

ss

Hi sunil,

Thanks for giving the detail post. I have few basic questions on daily high low and above below 50DMA. Now they are

1) In case of advance decline we are using it as a ratio but for the daily high low , is it a ratio between daily high & daily low or if it is something else then please tell me what is it?

2) How is it plotted on the chart? Is it the high that is plotted or the low that is plotted on the chart?

3) For the stocks above below 50DMA, is it a ratio between stocks above 50DMA & stocks below 50DMA or if it is something else then please tell me what is it?

4) How is it plotted on the chart? Is it the stocks above50DMA that is plotted or the stocks below 50DMA that is plotted on the chart?

With regards,

Learningcurve

Linus · #**132** 23rd September 2007, 01:43 PM

Quote:

Originally Posted by learningcurve

Hi sunil,

Thanks for giving the detail post. I have few basic questions on daily high low and above below 50DMA. Now they are

1) In case of advance decline we are using it as a ratio but for the daily high low , is it a ratio between daily high & daily low or if it is something else then please tell me what is it?

2) How is it plotted on the chart? Is it the high that is plotted or the low that is plotted on the chart?

3) For the stocks above below 50DMA, is it a ratio between stocks above 50DMA & stocks below 50DMA or if it is something else then please tell me what is it?

4) How is it plotted on the chart? Is it the stocks above50DMA that is plotted or the stocks below 50DMA that is plotted on the chart?

With regards,

Learningcurve

Hi lc,

1. A/D is on a closing basis. See NSE has say 2000 stocks, so on a particular day how many stocks closed above their previous days close? That gives you the figure of advancing stocks. How many closed below their previous days close ? That gives you the figure of declining stocks.

This ratio is calculated everyday and then plotted against the Nifty.

2. Similarly, the net number of stocks above their 50 DMA's is calculated by substracting number of stocks below 50 DMA from number of stocks above 50 DMA.

This net figure is plotted against the Nifty.

Regards,

ss

learningcurve · #**133** 23rd September 2007, 03:08 PM

Quote:

Originally Posted by sunil saranjame

Hi lc,

1. A/D is on a closing basis. See NSE has say 2000 stocks, so on a particular day how many stocks closed above their previous days close? That gives you the figure of advancing stocks. How many closed below their previous days close ? That gives you the figure of declining stocks.

This ratio is calculated everyday and then plotted against the Nifty.

2. Similarly, the net number of stocks above their 50 DMA's is calculated by substracting number of stocks below 50 DMA from number of stocks above 50 DMA.

This net figure is plotted against the Nifty.

Regards,

ss

Hi sunil,

Actually I wanted to know about daily high low chart i.e.

1) For the daily high low chart , is it a ratio between daily high & daily low or if it is something else then please tell me what is it?

2) How is it plotted on the chart? Is it the daily high that is plotted or the daily low that is plotted on the chart?

Thanks for giving the information about stocks above below 50DMA chart.

With regards,

Learningcurve

Linus · #**134** 23rd September 2007, 06:26 PM

Quote:

Originally Posted by learningcurve

Hi sunil,

Actually I wanted to know about daily high low chart i.e.

1) For the daily high low chart , is it a ratio between daily high & daily low or if it is something else then please tell me what is it?

2) How is it plotted on the chart? Is it the daily high that is plotted or the daily low that is plotted on the chart?

Thanks for giving the information about stocks above below 50DMA chart.

With regards,

Learningcurve

Hi, lc,

I don't understand this question. High, low ? where?

ss

learningcurve · #**135** 24th September 2007, 11:14 AM

Quote:

Originally Posted by sunil saranjame

Hi, lc,

I don't understand this question. High, low ? where?

ss

hi sunil,

i am talking about the 10day smoothed 20 day high low.

with regards,

learningcurve

Linus · #**136** 24th September 2007, 11:30 AM

Oh... I got you...

Again, this is a measure of general bullishness / bearishness of the broader market. See the chart of 20DHL:when the market started reversing the trend from down to up, the number of stocks closing above their 20 day highs also started to go up showing us that the whole broader market was participating in the trend reversal. Also notice the negative divergence on the extreme left of the chart, just before the fall: Nifty was rising but the number of stocks closing above their 20 day highs was falling, thus warning us about the impending danger ahead. Naturally, 20 day high is the highest price recorded by a stock during the past 20 days, and 20 days low is the lowest price recorded by a stock during the past 20 days. Why 20 days? because it covers 4 weeks or a months trading.

Regards,

ss

learningcurve · #**137** 25th September 2007, 12:50 PM

Hi sunil,

I am short of words to thank you for the effort you have taken to answer my queries. Can you help me out regarding the following :

1) Is it the number of stocks closing above their 20 day high or Is it the number of stocks closing below their 20 day low , which is plotted on the chart?. However, if it is neither of these then how it is plotted on the chart. Please let me know.

2) What story does the net number of stocks above 50 DMA chart tell us?.

With regards,

Learningcurve

Linus · #**138** 25th September 2007, 07:15 PM

Back to charts... Indices on higher grounds, internals on lower!

ss

Linus · #**139** 25th September 2007, 11:23 PM

Quote:

Originally Posted by learningcurve

Hi sunil,

I am short of words to thank you for the effort you have taken to answer my queries. Can you help me out regarding the following :

1) Is it the number of stocks closing above their 20 day high or Is it the number of stocks closing below their 20 day low , which is plotted on the chart?. However, if it is neither of these then how it is plotted on the chart. Please let me know.

2) What story does the net number of stocks above 50 DMA chart tell us?.

With regards,

Learningcurve

Hi lc,

Hey sorry, I missed this one!

It is the NET number of stocks closing above their 20 day highs.

Generally, 50 DMA is considered as a yard stick for intermediate trend. When you see majority of stocks above their 50 DMA's, you can be sure that the market is in a healthy state. I hope you will follow this thread and I will assure you that it is going to be interesting in the days to come.

Regards

ss

franktrader · #**140** 27th September 2007, 02:06 AM

Could someone kindly answer any of the following queries?

1. What is the best way to select the most bullish/bearish sectors and then the most bullish/bearish stocks in them.

I am using tradestation and metastock softwares and I update my NSE EOD data from the bse-nse yahoo group. So I have got all 1000+ stocks of the NSE in one single folder. I don’t know how to run the RELATIVE STRENTH studies on this data folder so that I can find the most bullish/bearish sectors and stocks. Could you please tell me the process of finding out the relative strength in this NSE data folder, in a bit detail?

2. Once the market starts correcting from these life time high levels of 5k / 17k,

then what will be the best sectors/stocks to go short? Should we short those stocks which are already very weak according to their relative strength values or should we short those stocks which have risen a lot during the recent time and are at the top of relative strength charts. I am really confused in this regard.

Kindly clarify this particular point in much detail , because I think that the time to go short is coming very close day by day and soon we will get a golden chance to benefit greatly by shorting a few selected stocks/contracts. So it is always better to be prepared in advance, so that when the real opportunity arises, you are ready to pull the trigger.

thanks & regards.

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