A plunge in Indian Stock market

[sspms2002]

Today was also a day when like a typical investor i just watched my stock ZEEL go down..

It open flat and then tried to go up...it reached my entry price of 352 and retraced a bit....i didnot covered as i wanted to give it some time to settle there..


But I just kept on making big red candles after some slow movements....

Finally i covered 100 shares at 345...and let the other 200 running..

It reached 340 odd and then retraced back at 3.15 to 345....I guess due to expiry..

Not sure what Futures Expiry is? And does stocks always rally on expiry?

I witnessed 2 expiry in last few months and on both occasions the stock moved up fast in that 5-10 mins...

 

[Riskyman]

Today was also a day when like a typical investor i just watched my stock ZEEL go down..

Not sure what Futures Expiry is? And does stocks always rally on expiry?

I witnessed 2 expiry in last few months and on both occasions the stock moved up fast in that 5-10 mins...

I hope you read my post http://www.traderji.com/day-trading/95789-plunge-indian-stock-market-36.html#post1052013

Expiry means simply the day on which a contract ends. Today was the expiry for feb month. So all contracts that were opened between buyers and sellers were closed today. From tomo March series begins.

No the stock need not necessarily rally on expiry. It can fall or remain flat or go up. Anything can happen.

 

[sspms2002]

I hope you read my post http://www.traderji.com/day-trading/95789-plunge-indian-stock-market-36.html#post1052013

Expiry means simply the day on which a contract ends. Today was the expiry for feb month. So all contracts that were opened between buyers and sellers were closed today. From tomo March series begins.

No the stock need not necessarily rally on expiry. It can fall or remain flat or go up. Anything can happen.

Thanks Riskyman...you said it right i was just seeing the market from a BIAS..for my position..

Even as the bulls tried to rally and take stock to 352 level..it didnot sustained there..also it went up on small volume and then the following action down wards was on high volume...

But i was hoping that its temporary and buyers again would come and left the stock..the stock kept on making small sideways candles and then big red candle and i was thinking that its now trying to reach its support and then it will rally..

when it reached its medium Support at 344-345 ..it played there for some time and that assured me that its consolidating there and may move up..

Though it tried to move up a bit but then a sudden red candle came...again i hoped this is temporary...and buyer will come soon..

i was just thinking that Buyers are driving it to a price which is cheap for them and then they will rally..it could be a right justification ...but in that thinking itself it moved to a price where i will exit based on panic rather than logic...

its killer way to extract money from weak players...While iam writing this iam still feeling that the stock would go up...(I guess because i have LONG position in it)

Else i would have liked to short it at present level...as even the expiry was not able to take it too high from its low..

Also , i am trying to gather information on OPEN Interest? What is it? and how does OPEN Interest affect a stocks price?? any clues?

 

[Riskyman]

Also , i am trying to gather information on OPEN Interest? What is it? and how does OPEN Interest affect a stocks price?? any clues?

http://www.investopedia.com/terms/o/openinterest.asp
http://en.wikipedia.org/wiki/Open_interest
http://www.tradingpicks.com/open_interest.htm

 

[sspms2002]

http://www.investopedia.com/terms/o/openinterest.asp
http://en.wikipedia.org/wiki/Open_interest
http://www.tradingpicks.com/open_interest.htm

Thanks Riskyman..

I could get something now..

Benefits of monitoring open interest

By monitoring the changes in the open interest figures at the end of each trading day, some conclusions about the day’s activity can be drawn.

Increasing open interest means that new money is flowing into the marketplace. The result will be that the present trend ( up, down or sideways) will continue.

Declining open interest means that the market is liquidating and implies that the prevailing price trend is coming to an end. A knowledge of open interest can prove useful toward the end of major market moves.

A leveling off of open interest following a sustained price advance is often an early warning of the end to an uptrending or bull market.

Open Interest - A confirming indicator

An increase in open interest along with an increase in price is said to confirm an upward trend. Similarly, an increase in open interest along with a decrease in price confirms a downward trend. An increase or decrease in prices while open interest remains flat or declining may indicate a possible trend reversal.

The relationship between the prevailing price trend and open interest can be summarized by the following table.

Price Open Interest Interpretation
Rising Rising Market is Strong
Rising Falling Market is Weakening
Falling Rising Market is Weak
Falling Falling Market is Strengthening



What is the The Price mentioned above? Is it stock price or the Futures's contract price?

Also does the Open Interest affect the sentiments of Equitiy stock or is it only related to futures?

 

[Riskyman]

What is the The Price mentioned above? Is it stock price or the Futures's contract price?

Also does the Open Interest affect the sentiments of Equitiy stock or is it only related to futures?

Open interest only refers to derivatives i.e futures and options. Derivative means a financial instrument whose value is derived from an underlying stock/share/equity. When we say "Open interest" we are talking about the number of contracts that are still open.

when price is going up and open interest is also increasing it means that people are bullish and therefore they are entering/buying more contracts in the hope that the prices will go up further.

When price goes up and open interest falls, you can assume that people are covering their positions as they think that price may not go up any further beyond a point.

There is a difference in volume and open interest. For example, I sold you one contract of reliance in the morning. So now open interest is ONE. Now suppose you sold the same contract back to me. After buying it back from you I resold it again to you and we did this a 100 times in day. In this case open interest would remain only ONE but volume would be 100.

 

[sspms2002]

Today was an OK day as the market moved much but i couldnot capture it to good extent.


My Delivery Position in ZEEL today opened up and it went till 348...i covered it there with a loss of around 800. (bough 3 days back)..


Then i started trading ZEEL from intraday perspective..i Shorted it at 346 odd as it was not getting good push up..

But as market was very strong today it was not going down either..
I had to exit it flat..

Then as it went a little down i bough 400 shares at 343 odd and rode it till 348 again..by flipping in and out..

Made more than 2800 in ZEEL alone..

But as i was getting confident i did a big mistake , all my watchlist stocks were in green except Hindustan Uniliver , it was down..so i shorted 100 of it..

and left it to its fate..it started up i resisted getting out...once it showed Rs 500 loss , i wanted to hit out but also wanted it to give one more chance..
It spiked and i booked exactly Rs 1000 loss..

Rule On Exit after loss of Rs 500- 800 broken again..Also i didnot watched it at all before entering position.

I then at end got small profit in TATA Motors on 200 shares and reached my 2k for the day and closed.

Stocks Traded: ZEEL , HINDUNIL , TATA Motors
P&L : Green 1991 after commissions


It was tough to pick a stock to trade , as every stock was flying except yours....so how do the senior pick good stocks on day like today?

Do they play stock which have historically shown good range on both profits and Loss or do they just play what they usually play most time..

 

[Riskyman]

so how do the senior pick good stocks on day like today?
.

Stock picking s always a game of wait and watch. You have to be alert when you see stocks that are trading at support and resistance. For example... 2 days ago bharti airtel was trading at 342 . 340 was a area of support as the stock had bounced a 2-3 times from this zone. I didnt take the trade. Today it closed at 359. Point is you have to be alert and scan for potential trades.

 

[sspms2002]

Seniors: Need your views..

Prices tend to move towards size...why and how that happens?

So lets say Stock XXX has support at 300 level and resistance at 340 level..

Why does a stock after starting from 300 price level would try very hard to reach 340 level..?

So what i see is ..there would be a tussle between buyers and sellers at 300 level and lets say Buyers are able to push out Sellers..so the stock made its first Green candle over 300 price level..

The sellers would again try to jolt them but Buyers are unfazed and they make another small green candle..

Now sellers try to give their hardest..and put in everything..but could not make the stock go down..a very small green or red candle forms..

This is the shooting point...

Now what happens....? Because the sellers are now kind of convinced that Buyers are in control...they also exit out their position and coupled with buying, the stock forms a medium green candle...

The stock now rockets and forms a big green candle..and then may be a few more...

Two things are happening here: More retails Buyers are joining...Also whats happening here is the Sellers on offer see it as on opportunity to grab a better price so they cancel/move their offers up...

They usually try to move up to near resistance level..and thats how the stock reaches resistance....

What happens here that may make stock to clear off resistance and shoot up more or fall back to its support? - Answer coming to my mind is how Volume is playing here

This is my interpretation of the how these moves happen from one level to another...

Any views from Seniors on the query and overall structure of the move?

 

[amitrandive]

Seniors: Need your views..

Prices tend to move towards size...why and how that happens?

So lets say Stock XXX has support at 300 level and resistance at 340 level..

Why does a stock after starting from 300 price level would try very hard to reach 340 level..?

So what i see is ..there would be a tussle between buyers and sellers at 300 level and lets say Buyers are able to push out Sellers..so the stock made its first Green candle over 300 price level..

The sellers would again try to jolt them but Buyers are unfazed and they make another small green candle..

Now sellers try to give their hardest..and put in everything..but could not make the stock go down..a very small green or red candle forms..

This is the shooting point...

Now what happens....? Because the sellers are now kind of convinced that Buyers are in control...they also exit out their position and coupled with buying, the stock forms a medium green candle...

The stock now rockets and forms a big green candle..and then may be a few more...

Two things are happening here: More retails Buyers are joining...Also whats happening here is the Sellers on offer see it as on opportunity to grab a better price so they cancel/move their offers up...

They usually try to move up to near resistance level..and thats how the stock reaches resistance....

What happens here that may make stock to clear off resistance and shoot up more or fall back to its support? - Answer coming to my mind is how Volume is playing here

This is my interpretation of the how these moves happen from one level to another...

Any views from Seniors on the query and overall structure of the move?

http://www.metastock.com/Customer/Resources/TAAZ/?c=3&p=12
http://www.ig.com/uk/support-and-resistance
http://www.traderji.com/trading-psychology/92832-strong-trading-mind.html#post1052527