Some Good Steals...
- Thread starter AMITBE
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Couldnt get the feel of its silkiness..Hi Roneeth...phoenix pulled out a pair of good pieces on saint's thread on trailing stops, from Traderji and saint himself.
I'm adding some additional notes here:
When faced with the issue of setting the stop a distance behind the cmp, the question arises as to how far back.
Obviously it cannot be too tight in normal circumstances, meaning when the trend is going well and the wider market is stable. The tight s/l would knock us out prematurely at the slightest fluctuation in price depriving us of the potential profits.
On the other hand if the stop is set too loose, the danger is it could significantly cut into the profits as we get stopped too late.
As the word 'trailing' implies, the stop now needs to be placed in such a way where it will protect the profits in either direction: not to soon and not too late.
So how far will do?
This is a subjective decision, subject to the anticipated volatility of each individual scrip.
We need to figure out a logical natural volatility or deviation of the scrip in question.
A TA concept, Historic Volatility is made use of here, the calculation of which uses a mathematical formula, and as the explanation of which is complex, I will not attempt it here.
Historic volatility is essentially the standard deviation of closing prices of the scrip over a period of time, the usual recommended time period is the preceding 9 days. Wider the range of closing price, higher the standard deviation and thus higher the historic volatility.
To keep it simple, the figure of 7% is used by many analysts for highly liquid scrips.
Meaning if the cmp is 79, the general trailing stop would be 79 minus 7% =73.45. When the price reaches 150, the trailing stop is 139.50 and so on. Any price movement outside the 7% would knock us out of the trade.
With low liquidity scrips, or where the fluctuation is lower, or in the case of a range-bound, sideways moving price, the value could be lesssay 4%. Here for the above scrip, at 79 the trailing stop would be 75.85 and at 150 it would be 144.
I have written this for a conceptual understanding of a trailing stop only, as situations can change around and not everything can be set to a rigid formula.
Hope it will help understand trailing stops better.
I'm adding some additional notes here:
When faced with the issue of setting the stop a distance behind the cmp, the question arises as to how far back.
Obviously it cannot be too tight in normal circumstances, meaning when the trend is going well and the wider market is stable. The tight s/l would knock us out prematurely at the slightest fluctuation in price depriving us of the potential profits.
On the other hand if the stop is set too loose, the danger is it could significantly cut into the profits as we get stopped too late.
As the word 'trailing' implies, the stop now needs to be placed in such a way where it will protect the profits in either direction: not to soon and not too late.
So how far will do?
This is a subjective decision, subject to the anticipated volatility of each individual scrip.
We need to figure out a logical natural volatility or deviation of the scrip in question.
A TA concept, Historic Volatility is made use of here, the calculation of which uses a mathematical formula, and as the explanation of which is complex, I will not attempt it here.
Historic volatility is essentially the standard deviation of closing prices of the scrip over a period of time, the usual recommended time period is the preceding 9 days. Wider the range of closing price, higher the standard deviation and thus higher the historic volatility.
To keep it simple, the figure of 7% is used by many analysts for highly liquid scrips.
Meaning if the cmp is 79, the general trailing stop would be 79 minus 7% =73.45. When the price reaches 150, the trailing stop is 139.50 and so on. Any price movement outside the 7% would knock us out of the trade.
With low liquidity scrips, or where the fluctuation is lower, or in the case of a range-bound, sideways moving price, the value could be lesssay 4%. Here for the above scrip, at 79 the trailing stop would be 75.85 and at 150 it would be 144.
I have written this for a conceptual understanding of a trailing stop only, as situations can change around and not everything can be set to a rigid formula.
Hope it will help understand trailing stops better.
Hello,
In my portfolio 3% is filled with penny stocks and they are doing very badly.
To be precise i own a few pennys namely.
zigma software, innovision ecom , bluechip india, iqms software, gv films, sgn cable, telesys, national flask and baffin eng
They are doing extremely badly past few eeks, i need desperate help on their near term targets , i am looking at selling all of the above at the nearest profit possible.To be precise mid october or end october.
Please convey to me the nearest targets.
Thanks and best wishes
Curious Trader
In my portfolio 3% is filled with penny stocks and they are doing very badly.
To be precise i own a few pennys namely.
zigma software, innovision ecom , bluechip india, iqms software, gv films, sgn cable, telesys, national flask and baffin eng
They are doing extremely badly past few eeks, i need desperate help on their near term targets , i am looking at selling all of the above at the nearest profit possible.To be precise mid october or end october.
Please convey to me the nearest targets.
Thanks and best wishes
Curious Trader
INDSIL ELECTROSMELTS LTD
( BSE CODE : 522165)
CMP Rs. 65.3 BUY
Highlights
* Indsil Electrosmelts can qualify for CDM (clean development mechanism for carbon credit )
* Strategic Shift toward Low carbon Silico Manganese Paying off.
* Expected FY 06 E.P.S > RS 18
Indsil is one of the three companies in the world that produces this ferro alloy. Tinfos (Norway) and Aramet (US-based MNC) being the other two..
* Trading at P/E of 3.6 based on FY 06 E.P.S
Key Indicators
Market Cap Rs 65 cr
Price Performance
52 week H / L Rs. 75/38
1 month Rs. 65/52.7
3 month Rs 66.95/46
6 month Rs. 75/46
Book Value 16.96
P/E 6.5
P/B 4
Indsil is one of the three companies in the world that produces this ferro alloy. Tinfos (Norway) and Aramet (US-based MNC) being the other two.
The company has installed a 21MW hydroelectric power plant at Rajakkad in the Idukky district of Kerala. Kerala is served by both South West and North East monsoon
With a total capacity of 184 million units of power, it is capable of generating 80 million units. Taking into account a wheeling charge of 12% to KSEB, it is capable of making available for the Palakkad unit, 71 million units--equal to its entire annual requirement, at a production cost of Rs1.10/unit as compared to the current price of Rs3.40+/unit that the company pays to KSEB. Excess power above the captive requirement could be sold to the state electricity board
The Indsil reported NP of 9.72 cr against 3.79 last year. The E.P.S of the company comes out be Rs 10.28.
Future Plans
The company plans economies of scale in its capability to produce Low C Si-Mn, the demand for which is estimated to rise in future since demand/consumption of SS200 grade all over the world is increasing
Setting Up of a Coal Based Power Plant at Raipur
The company is in the process of setting up a coal-based power plant under the umbrella of Indsil Energy and Electrochemicals Ltd, a closely held company, set up to acquire a closed ferro alloy unit at Raipur in Chhatisgarh state and for which, the management is carrying out an expansion programme. This program will take shape after Global Ferro Manganese demand again starts increasing. The excess power from Raipur can be wheeled to Palakkad unit so that monsoon dependence is reduced.
AMITDA PL. COMMENT
NANDAN
( BSE CODE : 522165)
CMP Rs. 65.3 BUY
Highlights
* Indsil Electrosmelts can qualify for CDM (clean development mechanism for carbon credit )
* Strategic Shift toward Low carbon Silico Manganese Paying off.
* Expected FY 06 E.P.S > RS 18
Indsil is one of the three companies in the world that produces this ferro alloy. Tinfos (Norway) and Aramet (US-based MNC) being the other two..
* Trading at P/E of 3.6 based on FY 06 E.P.S
Key Indicators
Market Cap Rs 65 cr
Price Performance
52 week H / L Rs. 75/38
1 month Rs. 65/52.7
3 month Rs 66.95/46
6 month Rs. 75/46
Book Value 16.96
P/E 6.5
P/B 4
Indsil is one of the three companies in the world that produces this ferro alloy. Tinfos (Norway) and Aramet (US-based MNC) being the other two.
The company has installed a 21MW hydroelectric power plant at Rajakkad in the Idukky district of Kerala. Kerala is served by both South West and North East monsoon
With a total capacity of 184 million units of power, it is capable of generating 80 million units. Taking into account a wheeling charge of 12% to KSEB, it is capable of making available for the Palakkad unit, 71 million units--equal to its entire annual requirement, at a production cost of Rs1.10/unit as compared to the current price of Rs3.40+/unit that the company pays to KSEB. Excess power above the captive requirement could be sold to the state electricity board
The Indsil reported NP of 9.72 cr against 3.79 last year. The E.P.S of the company comes out be Rs 10.28.
Future Plans
The company plans economies of scale in its capability to produce Low C Si-Mn, the demand for which is estimated to rise in future since demand/consumption of SS200 grade all over the world is increasing
Setting Up of a Coal Based Power Plant at Raipur
The company is in the process of setting up a coal-based power plant under the umbrella of Indsil Energy and Electrochemicals Ltd, a closely held company, set up to acquire a closed ferro alloy unit at Raipur in Chhatisgarh state and for which, the management is carrying out an expansion programme. This program will take shape after Global Ferro Manganese demand again starts increasing. The excess power from Raipur can be wheeled to Palakkad unit so that monsoon dependence is reduced.
AMITDA PL. COMMENT
NANDAN
Hi Nandan...thanks for all the info. Yes, the specs are indeed impressive on fundamentals.
As for techs, at 66, Indsil is trading a little below some resistance levels of March-April. I would wait to see these taken out first, though some buy signals may already have been generated. It has come up from 47 in the current rally and may rest a while or pull back some. Look for a rise to 70-72 levels, and when this is being passed, could be a point to enter. Do update.
Regards.
As for techs, at 66, Indsil is trading a little below some resistance levels of March-April. I would wait to see these taken out first, though some buy signals may already have been generated. It has come up from 47 in the current rally and may rest a while or pull back some. Look for a rise to 70-72 levels, and when this is being passed, could be a point to enter. Do update.
Regards.
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