I can help you with stock chart reading

[rahulg77]

Hi,

How u doing? What would your view be on Riddhi Siddhi@173. JP Associates@490, IPCL@265, Colgate@412, Ankur Drugs@171. Almost all shares are down right now. what do u suggest.

Hi,

Riddhi Siddhi-524480...Ankur Drugs-531683 and JP Associates 532532.

Thanks Mate

 

[vvonteru]

help files to learn how to read and understand tech charts?
I have already mentioned before to treat trading/investing in stock market as business. So, as in any business, you need money to start. Fortunately, you don't need a lot to trade in stock market. Neither do you need man power. Please don't hesitate to buy the books. They are worth the money. These books (mentioned earlier in the thread) are the best. I read several times and continue to read. Thats how you get the foundation. Nothing replaces the experience though. Continue to look at the charts. You might have seen earlier that I have just been trading for only last 2 years. So, you might wonder how I got so much knowledge. I almost spend each day looking at charts. I might have looked at thousands of them. Stock Market is my passion. I continue to read books along the way. This is important to not forget the basis in the midst of fear and greed.

As Elder says, in stock market, 3 Ms are important. Mind, Method and Money Management. Control your mind from fear and greed. Have a methodology (Tripple Screen, Swing Trading etc) and follow it in every trade, so that the probability works in your favour. Have a money management plan to allow the maximum risk (typically less than 2% of your principal amount) you want to take in each trade. Keep this risk constant and change the position size you are going to trade based on the stock price and loss stop.

Example, if you are following Tripple screen (I am not going to go through the methodoloy. Please refer online or book), decide on the risk. Lets say, your principal is 1,00,000 (1 lakh). You want to risk 1% on any trade. You would risk a maximum of (100000 * 0.01) Rs1000 per trade. If the stock price is 100, your determine stop at 90 (based on volatility/support), your risk is Rs10 per share. So, at max you can trade position (1000/(100-90)) 100 shares. If the stock price is 1000, stop is 900, your position is (1000/(1000-900)) 10. This way, the amount of money you risk is constant.

Methodology as stated before is constant (No exceptions hopefully). This way, you make overall profits. Lets say you make 6 out of 10 trades successfully. Your principal increases from 1,00,000 to 1,50,000. Now your 1% risk = 150000 * 0.01 = 1500. For the same stock price of Rs100 above, now you can trade (1500/(100-90)) = 150 shares. Basically, this technic of money management rewards you to trade more when you make money. Similarly, it would reduce your position when you are losing. Hope I made a point.

Riddhi Siddhi-524480
The way the stock has pattern, it goes up, takes a breather (trading range). It went up in June'05 and then breathed till August. Went up in Sep'05 and then breathed till Dec'05 end. Went up in Jan'06 and so far breathing. Hopefully you can use this info.

Ankur Drugs-531683
Avoid. If you are in it, get out. Chart is bad. Stuck in a trading range between 120 and 160. Avoid stocks which gap too high.

JP Associates 532532
Looks good. Trend is still there. It is in pull back mode. I would go long with a Limit Stop at 490 or 500. Below that, there is noise waiting for the market wind to take off. Please look at the sector in which the stock is. Sector is very important. Ideally, stock and sector should be comparable.

 

[engel]

Thanks for your explanation.It has cleared a lot of confusion for me.Gr8 going.

Engel

 

[harmads]

help files to learn how to read and understand tech charts?
I have already mentioned before to treat trading/investing in stock market as business. So, as in any business, you need money to start. Fortunately, you don't need a lot to trade in stock market. Neither do you need man power. Please don't hesitate to buy the books. They are worth the money. These books (mentioned earlier in the thread) are the best. I read several times and continue to read. Thats how you get the foundation. Nothing replaces the experience though. Continue to look at the charts. You might have seen earlier that I have just been trading for only last 2 years. So, you might wonder how I got so much knowledge. I almost spend each day looking at charts. I might have looked at thousands of them. Stock Market is my passion. I continue to read books along the way. This is important to not forget the basis in the midst of fear and greed.

As Elder says, in stock market, 3 Ms are important. Mind, Method and Money Management. Control your mind from fear and greed. Have a methodology (Tripple Screen, Swing Trading etc) and follow it in every trade, so that the probability works in your favour. Have a money management plan to allow the maximum risk (typically less than 2% of your principal amount) you want to take in each trade. Keep this risk constant and change the position size you are going to trade based on the stock price and loss stop.

Example, if you are following Tripple screen (I am not going to go through the methodoloy. Please refer online or book), decide on the risk. Lets say, your principal is 1,00,000 (1 lakh). You want to risk 1% on any trade. You would risk a maximum of (100000 * 0.01) Rs1000 per trade. If the stock price is 100, your determine stop at 90 (based on volatility/support), your risk is Rs10 per share. So, at max you can trade position (1000/(100-90)) 100 shares. If the stock price is 1000, stop is 900, your position is (1000/(1000-900)) 10. This way, the amount of money you risk is constant.

Methodology as stated before is constant (No exceptions hopefully). This way, you make overall profits. Lets say you make 6 out of 10 trades successfully. Your principal increases from 1,00,000 to 1,50,000. Now your 1% risk = 150000 * 0.01 = 1500. For the same stock price of Rs100 above, now you can trade (1500/(100-90)) = 150 shares. Basically, this technic of money management rewards you to trade more when you make money. Similarly, it would reduce your position when you are losing. Hope I made a point.

Riddhi Siddhi-524480
The way the stock has pattern, it goes up, takes a breather (trading range). It went up in June'05 and then breathed till August. Went up in Sep'05 and then breathed till Dec'05 end. Went up in Jan'06 and so far breathing. Hopefully you can use this info.

Ankur Drugs-531683
Avoid. If you are in it, get out. Chart is bad. Stuck in a trading range between 120 and 160. Avoid stocks which gap too high.

JP Associates 532532
Looks good. Trend is still there. It is in pull back mode. I would go long with a Limit Stop at 490 or 500. Below that, there is noise waiting for the market wind to take off. Please look at the sector in which the stock is. Sector is very important. Ideally, stock and sector should be comparable.

Hi VVonteru
Very interesting posts.. please keep it up. You have mentioned two books, namely:1.TA of Stock Trends by Edwards&Magee and 2.High probability Trading by Marcel Link.
Are these books basic enough for learners like myself ?? and are these avalable in India ??
Best regards

 

[misty]

great vvonteru u r doing a lot of hard work and sharing lot of valuable information really enjoy ur posts

 

[cmohanraam]

dear friend,

am holding the following stock and advise ma as to hold / sell

icici @498.75, royal orchid @165, syndicate bank @ 75, vijaya bank @ 20, andhara bank @ 90, bank of baroda @ 130, gujarat state petronet @ 27

regards

ram

 

[amitt29]

hi, Mr. Onteru,
Whats ur advice on infosys at current levels,it sems to be languishing in 2880-2920 range forever for the past 3 months.Do i buy a put now for this month.The put is availabe at Rs.20 for 2900 strike.

 

[vvonteru]

icici @498.75, royal orchid @165, syndicate bank @ 75, vijaya bank @ 20, andhara bank @ 90, bank of baroda @ 130, gujarat state petronet @ 27

Banking sector has been dull. Not going anywhere. Don't waste your time. Switch to better sectors.

Do you observe something from the list you have given. All of them are in the banking sector. Typically (unless the sector is doing good and you find lot of entries in several stocks), do not have more than 1 stock in a sector.

icici @498.75, syndicate bank, andhara bank - Same dull charts
Vijaya Bank, bank of baroda - worst charts

gujarat state petronet - New 2 month old stock. I normally avoid new issues. My expertise is in stocks who are leaders of the current market. I use TA rather than fundamentals. I don't have time for fundamentals. I believe fundamentals are already shown in the data, because, we are at the end of the food chain.

royal orchid - I couldn't find it. If it is in banking sector, above comments apply.

Infosys
I have not delved into options. I want to in future for hedging purposes to support a trade in a stock. But, If you are interested in that sector, switch to SATYAMCOMP. If you are already in infosys from some time, I would trail stop at 2400 and then on future move, move it to 2700. You have to understand. Just like us, after a long run, stocks breath. Don't confuse an existing position with a new position. I wouldn't enter this stock now. But, if I am already in it and as long as uptrend is still intact, I will give some room for it to breath. And as the stock goes up, trail the stop.

 

[amitt29]

Thank You,
Mr.Onteru.
But can u suggest whether Infosys is in a breakout mode downwards or upwards.

 

[vvonteru]

INFOSYS - Breakout down or up
I am not a break out player. I am a kind who ask, let it breakout and then I will think about it. Playing breakouts is a risky game. There are a lot of false breakouts.

Atleast from the chart, 50 day EMA is acting as the support. At this moment, it looks as though it is just staging before another leg up. How long this staging (trading range) will be, it is anybody's guess.