Intraday Trading on First Day of Listing

Ravi

I hate to do this , but I HAVE to point out some mistakes in your spellings ,which you are likely to continue making, and which could distract readers from grasping the real content of your posts:

Script : Please .. its scrip, not script (This is a common error)

Prize : Please ... its price, not prize

I trust you will take this criticism in the right context. (I don't claim to be perfect myself, and do believe that everyone can improve, for the general good of self and mankind !)
Thanks
AGILENT

dear ajay''''' i liked ur suggestion of doing homework......pl. let us know full detail of how u plan for next day's trade....i.e.what do u do after ur charts are updated.....pl. elaborate ur shortlisting process for next day's trade.....shall we call it a day in the life of a trader/or ajay's trading manual....hope u will oblige

Ravi
Here's a compilation (see attachment) of two dissimilar stories. Both highly fancied IPOs, but with obviously different trends since listing

Since your thread focuses on intra day trend on first day of listing, you need to :
1. research some more (read the commentaries -- which I traced from some site I cant recall now -- below the respective charts) ,
2. fill in the missing info from yr sources, and then
3. try and establish a co-relation -- however remote -- between the intra-day trend upon listing and subsequent (medium term) trend

Sasken opened above 500 (in fact the 52 week high is lited as 624 !! which could have been a stray transaction on listing day... strangely not evident from the chart). Insiders would have known it was clearly overpriced at that level (there was an overseas court case pending which they lost later, depressing quarter earnings), possibly explaining the bearish intraday trend on listing

Suzlon, in contrast was underpriced on opening (admittedly a hindsight observation to non-insiders), hence the bullish intraday trend on listing.

Conclusion : one cannot generalise or even predict the intraday trend on listing. There are too many factors at play (immediate demand/supply depending on level of oversubsription, medium term price expectations, state of the market etc etc).

I suggest if you are really keen to research this topic, gather some more samples and try establish a pattern. (If you need help, pass on all the info and I will try help u out )

Good luck !
AGILENT

Attached Files

Sasken & Suzlon _ a study in contrast.pdf (34.8 KB, 17 views)

Today GVKPIL got listed. Once the security went below the open price you would go short and keep your stop order above the open price. And it was never hit whole day through. Hope you understood the concept.
Pl. remember in case you get stopped, you have to reverse your position, means from short you should shift to long.

AJAY

Attached Images

IntradayChart.jpg (24.9 KB, 19 views)

Ajay,
Interesting... are you saying all this in hindsight , or did you actually manage to make profit using this micro strategy

AGILENT

So Ajay, according to you, open prize* acts as stop loss for both short and long positions. Now, what about average price*? Applying the same logic, what I can make out is that whenever we go long or short, the moving average prize* becomes our trailing stop loss. Am I correct, Ajay? And to repeat Agilent, how successful this strategy is?

Thanks

Ravi S Ghosh
ravi_s_ghosh@*****.com

* Agilent, this is a variant of "price," please check dictionary. I have corrected "script," thanks for notifying.

I have no comments... all the best Ravi

Dear Agilent,
I discussed one of the strategies to trade any security on the first day of trading. I have no time to discuss something hindsight. I am a professional trader. If anyone tries to improve the trading mechanism, I am with him/her. I want to teach how to fish. I am not interested in giving the fish. Otherwise I could have posted stocks to buy or sell for today for intraday trading and for keeping positions with a week's view/month's view etc. So, please whatever you find in my post, try to work practically on to it with charts. You will have clarity. You may check all my earlier posts.
By the way my profile is I am a postgraduate in financial management. I have been into technical analysis since 1995. I use charts from 1 min. periodicity to one year periodicity to understand what is happening in the security. Design my entry and exit by the chart. And if you want to know the software I use I tell I use Metastock majorly. And I also own Advanced GET, WAVE 59, RAMP, Amibroker etc. And all this info is to give you confidence that I am enough experienced to discuss the strategies.
All the very best.
AJAY

Dear Ravi,
You should be more careful in applying the average traded price(ATP). Reason being the so called sharks know it fully well that the stops prevail at ATP. So they run the price upto the level and trigger the stops and the security will take original direction keeping the traders on wait and watch policy. Slowly unknowingly the price will go away from the entry price, always giving us a feel that your move might come. But it will never come. So, be careful. First study the charts properly. Then try to understand what must have happened. Then take the trade. Try to avoid momentum trading, if you track the markets alone. If it is a team it will be different. And if by any chance you are into a momentum entry keep a timestop for the trade. The momentum should be back into the security in generally less than 5 min. favouring you. Otherwise exit. You can consider reentry again only the momentum is back. But it is very risky trying to catch a running bus.
All the very best
AJAY

Hi Ajay,

Thanks for those advices. Today, I did try your advice on SADBHAV (RNRL also) after losing some on my own decision. My preconceived decision was to sell as soon as the market opens as in the previous scrips I had followed I found that it falls immediately (in some cases it rises before falling). So, I was ready with the sell button and as soon as the market opened. I sold 50 at average 213.32 and it fell to around 205 within few seconds. But then it jumped back and continued rising. So as per your ideas, I went long at around 240. The script went up to 263 then came down a little. At 258, it was kind of stable and though it was above its open and average prices, I was wondering whether one should open fresh long position or not. What you would have done in that case? Again, it fell to 252. Now, I had placed my stop at 255 with limit of 254.95. As price moved down, my order was not triggered as limit was 254.95 whereas market price was 253. Then I changed the order to market and it was executed. Then the scrip was more or less stable before jumping to 267.

So, my question is that when the scrip is up substantially, above its open and average prices, what call should we take? By principals, it should be buy, but quite possibly that might be the day’s high and the scrip might just no go above that. (now as I had typed all this, price is 282). Take the case of RNRL. When it was around 23, it was above its open and average price, but if we had gone long, we would have suffered a loss since it was came down to 19 though still above its opening price of 17.5.a

Next thing is about stops. When SADBHAV was around 260, I placed stop at 255, but price fell below that level before going up. So, could you please suggest any better strategy to place stops.

I am attaching my order book, etc, for today. Please have a look and tell me where I went wrong.

I have been collecting intraday price chart of scrips on their listing day from NSE by taking a screen shot, but that is not much useful as things are hazy and we do not get bar chart. Do you know where from one can get better intraday charts.

Finally, thanks again for reading all the junk above and for your enduring support.

Thanks

Ravi S Ghosh

Attached Files

Book1.xls (21.5 KB, 17 views)