BraViSa TempleTree-India Market Calls

[d_s_ramesh]

Thank you puneet for your elaborate description about me. I don't know if I am an expert, but would surely share what I have learnt so far in the financial markets.

My name is my Id, D S Ramesh, my contact 9448352875 I don't know if I can give my email id, forum rules do not permit to do so. It is in my profile, even there if it is for public access.

You had stated that you are forming a system using Stochastics and Bollinger Bands, both are tools used in the ranging markets. Though markets are most of the time in a range, it is trends that give good returns as per my experience with the markets.

Good trending indicators are moving averages, MACD Lines and MACD Histogram, ADX etc., I do not say you follow something blindly, study them, get to know of their basics, once you are psychologically in tune with your system, back test the system with various data in different time frames, get to know which is the time frame you are getting more freedom with, then... only then trade it with out overriding its signals. Trust your system and follow it with discipline.

Do not trade with stress, it should be loving and feel relaxed to be in a position. There is a saying.

Know what you are doing.
Believe in what you are doing.
Love what you are doing.
Then success will keep knocking at your doors.

Being a mentor, I seriously don't know what a mentors responsibilities are, but sure would share what I have learnt. My style of conversing may not clear many of your doubts, in that case please be free to write and ask about what you feel.

My experience with the markets have been from 1990, but I genuinely say that what I have achieved is peanuts compared to many stalwarts in this field. My mentor is Dr. Alexander Elder, it is like a Dronacharya/Ekalavya relationship. I think you would understand it in the right way.

He is my inspiration, through his guidance and truly without his knowledge he has been helpful to me in my research and development activities which have come to an invention of few indicators and a fantastic trading system.

I believe you get the best from your effort and career. Happy trading.

 

[d_s_ramesh]

Short term bottom on NIFTY

Testing of support and confirmed rejection of lows is good news for bulls on the NIFTY. What is in store for the next session? Some of the points to note: MACD Histogram on the daily chart has retraced bullish divergence, the same on the intraday charts, at the lowest low price on the index, a shallow bottom on the histogram was formed and the closing bar has a strong histogram above zero. There is a multiple bullish divergence on the intraday MACD histogram.

Daily charts saw a test of support on Friday, while most of the Global indices showed renewed weakness, our index brushed off the same with just an opening low. The opening low was rejected by the market, which shows clearly on the chart formation with a long spike to the bottom and a close above the opening price. All these signals give us an alarm that something is brewing on the bullish side.

As we write on a regular basis that any move cannot be one sided, a ball thrown up will at some point turn and return to base. The same way markets are always connected to their value zone, as my mentor would always say, markets are connected to an hour long rubber band, it will snap back to value after extending between trends. The rejection of lows on the Friday session shows that a significant turnaround is around the corner for NIFTY. A close above opening adds more strength to the bullishness.

All these bullishness holds good for the hourly charts only. Now, what is the potential for the move up? The value zone for Fridays closing on NIFTY is 5062-5122 levels, showing that the price move can reach anywhere between the sweet zone levels. We can find a resistance at 5100 levels, so it would be logical to assume that any bullish move could have the potential to reach 5100 levels.

Where to buy? There are many theories on the entry techniques, few traders use the bullish divergence of histogram and its ticking up as confirmation to the end of the prevailing trend and cover shorts to go long, but this gives more whipsaw trades (at least that was our experience). So, we need some confirmation and that was not visible up to the closing bar on Friday. A close above 4960 on the first bar of Monday will give that confirmation, but the price on Mondays first bar is sure to exceed that value by many times. Let us wait for the charts to form and then decide on the course of action to be taken there.

Global market consensus, yes, it has painted a different picture. European markets have closed marginally weak following a thrashing they received on Thursday, but the US markets have shown robust strength and have closed positive by more than 1.5% on their Index values. This is another important clue that our market is going to open strong on Monday.

So much for the Hourly charts, now what is in the daily? Daily chart is trending into the new bear move. While MACD histogram has retraced bullish divergence, MACD lines are strongly trending down giving a multi month low below zero. Shorting here is a Greater fools theory, it says that I am a fool, I am selling below value, but I hope to meet a greater fool down the road who will be willing to sell to me even lower. Hence, this is not the right place to enter short, those who are not already in short trades, shall wait for the market to return to value and then evaluate a correct level to short, which suits their risk/reward appetite. At present, the market is in the rallying mood, so a wait till it forms a minor top, patience will reward in a rich way.

Weekly charts have closed below their slow moving average; a breach of 4842 will turn the weekly charts into a bearish trend. What is the strength for bearishness on the weekly? Again it is very strong with a multiple bearish divergence on all indicators; the last high made by NIFTY on the 2nd week of April was backed by a very lackluster bullish power, which is shown by the MACD Histogram struggling to keep its head above zero line. And that was the end of bullishness on the Index.

All these thoughts written here are probabilities; markets can be totally against all views expressed. We have made our analysis based on previous occurrences. It has been proved for a century, that human psychology is a repetition always. Traders please use your own judgment before committing real money. We believe these inputs would add stream to your analysis as a starter.

Happy trading folks.

 

[d_s_ramesh]

Sectors this week.

In a week that has given signals for change of trend in the markets. Let’s find what is the sector performance for the week? While all the sectors have closed negative, there is which held its head above water and that is, the ENERGY Sector with a 0.50% gain on its Index value. Most of the heavy weights in this sector like ONGC, IOC, HINDPETRO, OIL and GAIL etc have given above 5 gains for the week. There still were few weaker stocks here. The Index heavy weight RELIANCE is underperforming, ‘is the shine out of RELIANCE’, there is huge confusion prevailing about the promoter groups feuds. CAIRN has the weaker stock list.

The weakest sector of the week is CONSUMER SERVICES & UTILITIES; both share the first place from behind with a close to 5% loss on their index values. SUNTV and INDHOTEL have dropped close to 8% on their values and lead the charge in the fall of CONSUMER SERVICES sector. It was NEYVELI LIGNITE, TATAPOWER & TORRENTPOWER with losses of above 5% that has dragged down the UTILITES Sector.

The strongest Industry this week was Public Sector Banks with a 3.62% gain on its index, it was in total contrast to the above 6% fall on the Private Banks Industry. The reason for this change was the effect of European crisis on the financial markets. It is the Private Banks that has more exposure in the current turmoil. Do they really have? At least that’s what the price movement says.

The weakest Industry was Computer Software Training with a loss of a whopping 16.43% on its index. EDUCOMP single handedly managed to cripple this industry with a close to 20% drop in its price. The other Industry which has lost in double digit was LCV’s & Tractors Industry with an 11.98% drop in value. Big time losses have been registered here. TATAMOTORS -13%, ESCORTS -10% and ASHOKLEYLAND -9%.

A look on which are the stocks that are trading on the long and short side of the market from the NIFTY constituent list.

Long Stocks on Weekly charts

ACC, from 891.20
AXISBANK, from 515.90
GAIL, from 293.10
HCLTECH, 198.80
HDFC, from 2782.25
HDFCBANK, from 1700.25
HEROHONDA, from 1425
HINDALCO, 71.70
IDFC, from 157.75
INFOSYS, from 2260.25
ITC, from 234.00
M&M, from 197.55 (split adjusted)
PNB, from 441.75
SIEMENS, from 297.00
SUNPHARMA, from 1525.25
TATAMOTORS, from 318.10
TCS, from 292.50
WIPRO, 272.50

SHORT stocks on the weekly chart

AMBUJACEM, from 104.50
BHARTIARTL, from 323.80
BHEL, from 2350.75
CIPLA, from 309.70
DLF, from 324.00
HINDUNILVR, from 233.30
JINDALSTEL, from 647.90
ONGC, from 1131.00
RCOM, from 184.10
SAIL, from 207.10
TATASTEEL, from 552.40

There are 19 stocks trading on the long side while 11 are trading on the short side. The left over of 20 stocks forming 40% of the index constituents are in sideways, this makes clear why the index is not giving strong moves on the either side. From the above mentioned list some of the stocks have changed direction this week.

HINDALCO, SUNPHARMA, TATAMOTORS, TCS & WIPRO will change to short if this weeks low is taken off. ONGC will move to non-trending on breach of this week high. Our sector and Industry Index charts now include both BSE and NSE listed stock, this makes the Indices more coverage and have a clear broad picture of any Industry or Sector. A total of 71 Industry Indices, 17 sub-sectors and 10 main Sectors have been classified and analyzed in a step-by-step manner.

 

[columbus]

deleted.......

 

[d_s_ramesh]

I am very........sorry, it was a typing error. DLF is short from 324.00. I have changed it in the post. Many thanks to Columbus for notifying this error to me.

 

[d_s_ramesh]

Hourly trend changed!

The hourly chart of NIFTY has changed its trend to bullishness,we need to cover short above the opening high of the day and trade long.Market gaped up on opening as expected and has formed a spike high, will this high get breached and will the trade change happen in the next bar? This is a speculative question, but let us follow the trend in the right way, our work is to place cover short and trade long orders to the market. If it gets filled we are in on the 2nd bar, else change it for the high of the next bar.

Entry for the long will be quite far away from the value zone and that is the range market, it plays on traders patience and test their discipline.

 

[d_s_ramesh]

Modify cover and long order to above 5004 spot.

 

[d_s_ramesh]

Shorts covered with an above 65 points gain and long trade filled. Chart is gaining strength on the long side.

Happy trading.

 

[d_s_ramesh]

reverse long below 4960, long trade failed with a loss of close to 35 points.

 

[d_s_ramesh]

Indecision sets in again

NIFTY which opened gap up made a good recovery, but took strong resistance at 5025 levels to crash land again on close. Our running short trade was covered with a 67 point gain on spot values. The long trade turned into a whipsaw and reversed with a loss of 45 points loss. Hourly charts have closed with a short trade having good gains towards close.

What is in store? With most of the global peers mirroring each other and an intermediate bottom having been formed, there is a likely chance of range bound moves in the next session. With the value zone on the Daily charts at 5045 levels, there is a possibility to move up again. We may see some more whipsaw trades before there is a good trade and that is the norm of trend following.

Having a good number of whipsaw trades and still being profitable is the secret of this game. Markets are not giving good trends at present, but hopes are not lost. Staying with the system with discipline will for sure be profitable in the long run.

Erratic moves in the RELIANCE group stocks was the reason for volatility in our market today. With RELIANCE, RELINFRA and RPOWER in the non-trending zone, they are not likely to give any good moves apart from coiling between averages. Keep off from these stocks as they would only generate whipsaw trades.

Broad based weakness persisted on almost all the sectors and Industries with miniscule gains in some Industries, while none are worth a note.