Day Trading Stocks & Futures

[mohan.sic]

Mohan bhai.... i've been wondering how best I can answer you. I realize that you have may have not read whatever I have mentioned in the morning because you have pretty much repeated in your last post what I was saying in the morning with added details of Black-scholes model. While for me, this has not been a game of one-upmanship, you & I are both aware of the knowledge we had at the time of starting this discussion. I will concede defeat. You win, i lose.

I hope to have more discussions with you in the future. Lets enjoy the India/pak match with plenty of KF lite

Bhai,

I read your posts again, and here I am pasting some parts of it along with post no.

1) 62188:
Yesterday's IV is now HV. Cant compare today's IV with yesterdays HV.

Yesterdays IV is now HV is what you said. Right ?

2) 62209
mohan.sic : except the similarity in the names, implied volatility has nothing to do with historical volatility.
Riskyman: Is exactly what I was saying too comparing today's IV with yesterdays is futile

clearly you are inferring that yesterdays IV will become todays HV and so comparison is futile. Right ?

3) 62221
Volatility measures a stock's fluctuation. Implied volatility is a measure of this fluctuation expressed as a percentage.

Here you are saying that Implied volatility is Stocks volatility expressed as percentage. Right ?


My answer is, your above 3 assumptions are wrong and below are reasons.

1& 2) HV & IV are completely different. Previous IV numbers will not become todays HV.
HV is used to denote actual volatility that occurred in Nifty and it is calculated from actual Nifty spot movements. Where as IV is a part of option premium and it is calculated from Option Prices. Therefore, both are different and hence Previous days options IV numbers cannot be called as HV.

3) IV is not stocks volatility expressed as percentage. Please refer to my previous post for explanation on iv.

I will not comment on one-upmanship, win/lose part. But if there is any prize, let me know & I will send my address..

 

[Riskyman]

Eye opener in terms of long term investment perspective.. ...

Risky Bhai, i have shortlisted 5 stocks for longer term investment ( same stocks to be used for trading using pledge concept)

1. Hdfcbank
2. Bajajfinance
3. Asianpaints
4. Titan
5. biocon.

Each 2 lakhs rs.

I thought these are fundamenatally good stocks with clean management practices ..as per ST da.

Do u think we can compare likes of graphite or sun pharma etc etc with above mentioned 5 stocks??

Do u really anticipate falls about 30-50% on these stocks as like happened with sunpharma or graphite?

I am not a fundamentals guy who knows very well to read balance sheets etc. Therefore, I will simply say that no matter what the stock is, it will go through a corrective phase. This corrective phase can be as much as 50% also (more chance if it has run vertically up). But a 50% correction in the stock price DOES NOT mean the fundamentals have changed greatly. Price moves can be due to any reason like liquidity crunch, additional govt taxes etc etc. I would like to remind you that even companies like Coca cola and Pepsi in the US markets have corrected 50% of the moves after vertical rally.

If you are an investor, corrections should not perturb you much. Good stock should be accumulated on such big dips and sold/profits taken during vertical rallies. All the stocks you have mentioned are good stocks. We cannot compare your stock list with companies like Graphite/heg etc as these are cyclical stocks i.e they tend to perform well when the steel companies do well. All these stocks went up due to huge demand for graphite electrodes used in arc furnaces.

All the stocks you have mentioned have run up significantly in the recent past. I would personally wait for a dip to buy them if not a big correction. I suggest you also ask @Smart_trade for his views on these stocks as I know he tracks Bajaj/HDFC closely.

 

[Self-employedTrader]

You study the fundamentals of these stocks yourself.Unless you do that,you will never have confidence to invest in and hold these stocks.Only strong fundamentals,clean management and high growth in profitability can take the stock price up...not what ST da or anyone else says....corrections are part of investing,so they will come and they will come when nobody expects them but in spite of corrections, stock like Titan has given over 18 % CAGR in last 20 years and that is what separates wealth compounder from ordinary run of the mill stocks....Sun Pharma fundamentals are deteriorating from last 3-4 years and that is the reason for the fall...big name does not guarantee the growth in stock price .Sun Pharma and HDFC Bank are of totally different class...if the fundamentals of the companies you mentioned deteriorate,then they can also fall....but it is our job as investors to keep our ears to the ground and come out of those stocks if the fundamentals are going bad...

Smart_trade

Thanks ST sir. Investing should be done when the correction finishes. I think long term scalping would be more profitable that long term investing. But yeah, investing is one time job, while intraday we'll have to go wherever the market goes.

 

[marimuthu13]

OTE="Riskyman, post: 1362259, member: 243511"]I am not a fundamentals guy who knows very well to read balance sheets etc. Therefore, I will simply say that no matter what the stock is, it will go through a corrective phase. This corrective phase can be as much as 50% also (more chance if it has run vertically up). But a 50% correction in the stock price DOES NOT mean the fundamentals have changed greatly. Price moves can be due to any reason like liquidity crunch, additional govt taxes etc etc. I would like to remind you that even companies like Coca cola and Pepsi in the US markets have corrected 50% of the moves after vertical rally.

If you are an investor, corrections should not perturb you much. Good stock should be accumulated on such big dips and sold/profits taken during vertical rallies. All the stocks you have mentioned are good stocks. We cannot compare your stock list with companies like Graphite/heg etc as these are cyclical stocks i.e they tend to perform well when the steel companies do well. All these stocks went up due to huge demand for graphite electrodes used in arc furnaces.

All the stocks you have mentioned have run up significantly in the recent past. I would personally wait for a dip to buy them if not a big correction. I suggest you also ask @Smart_trade for his views on these stocks as I know he tracks Bajaj/HDFC closely.[/QUOTE]

Thank you bhai.. One more question for you..i have seen your chart for biocon...where you marked yellow rectangle for possible downward target upon correction...is it possible for you identify downward target if any correction happens for hdfcbank, Baja finance, titan and asianpaints.

 

[against_tides]

Bullish view on Gold continues. Matter of time before it tries to BO.

View attachment 35488

where to trade these things...gold and crude...??? MCX??

 

[Riskyman]

Thank you bhai.. One more question for you..i have seen your chart for biocon...where you marked yellow rectangle for possible downward target upon correction...is it possible for you identify downward target if any correction happens for hdfcbank, Baja finance, titan and asianpaints.

I had posted a Daily Chart of HDFC Bank earlier assuming it could make a double top. But my assessment was wrong and the stock continued to break out from the top and continue higher. Here is what I had posted.

Here is Hdfc Bank Monthly. At the moment, there is NO top formation on the monthly despite the vertical run up. The stock could even rally further but I wont be a buyer.
We have to remember that we cannot catch tops. We can only know after the correction begins( key support broken). Some stocks print a nice Doji or a spinning top or a bearish engulfing pattern or give some other indication of a reversal. There after we have to wait for further confirmation. So its a long wait.

Here is Asian Paints Monthly.
Stock is at a double top but no sign of a corrective phase. It has to break down below 1000-1100 before it become bearish. Also note that Asian paints has given 2 corrections of 25% each in the last 3-4 years. Moreover its not in a vertical rally phase. Its a very strong uptrend. So i would think its a great stock to buy on big corrections.

Here is Titan Monthly
Again no top formation so I cannot tell the extent of a correction. But you can note that the stock is in a vertical rally phase right now. Correction will come. When ... my guess is as good as yours.

Here is Bajaj Finance Monthly
This one also no reversal in sight. Almost vertical rally phase. You will notice that it corrected close to 35% in under 2 months in 2018. Thats shows how fast some of the stocks can correct.

Buy good stocks when they correct a lot. Sell them/book profits when you see vertical rallys. This is where common man investor gets trapped. They buy at the top and sell at the bottom.

EDIT: I think I may have deviated from the core question you asked. Answer is.. I will be able to mark corrective targets only when correction begins. Not before that.

 

[Riskyman]

where to trade these things...gold and crude...??? MCX??

Yes if you dont have a CFD account then MCX is best.
Dont get into the hassle of opening a CFD account now as there are many problems with outward/inward remittances due to RBI guidelines etc. Luckily, mine is very old one.

 

[Riskyman]

@marimuthu13 Here is a very good example of a reversal on Maruti Monthly Chart.

 

[against_tides]

Yes if you dont have a CFD account then MCX is best.
Dont get into the hassle of opening a CFD account now as there are many problems with outward/inward remittances due to RBI guidelines etc. Luckily, mine is very old one.

cfd account where..the url??

do you trade in mcx??

 

[Riskyman]

cfd account where..the url??
do you trade in mcx??

CFD = Contracts for Difference.
Yes I trade in MCX as well.