I can help you with stock chart reading

[vvonteru]

VV,

Have seen you recommend Dabur a few times before, i haven't seen this stock move a lot...typically in a 5rs range. I don't understand how such a stock is good for short term trading...is this stuck in a range.

What are your views today on ITC and reliance. How can you use charts to say if a pull back is expected in these 2. Would appreciate if you use RIL chart to say if pullback is expected, also share how (using what ratios and metrics) you see that in the chart.

I am still not sure if i sould sell RIL or expect it to keep going up....till 1090.

Please share your thoughts.

Thanks

Dabur's ATR is Rs9. RIL ATR is Rs47. Each stock has different volatility. You need to choose a stock that you are comfortable with its volatility. That is were position sizing will come into play. Volatility based position sizing for Dabur will give you more size than RIL. For example, if you are comfortable with a swing of Rs500 per stock in your portfolio, your position size for Dabur is 500/9 = 55 shares. For RIL, 500/47 = 10 shares. Further, you may choose to filter your selection based on volatility. You may choose not to trade stocks that have ATR < 20 and > 100. Thats up to you. Everyone has to customize the system based upon themselves. You need to understand who you are to do this. Are you a low/medium/high risk taking person?

There is nothing in ITC or RIL that makes me think they are going to pull back. In general, a stock has to pull back. It cannot go up forever. Somebody has to take profits. RIL 2 days earlier was in pull back. There is no way to tell when they will do it (other than if they cross Bollinger Bands). Just follow the market. If it pulls back, then identify stocks that also pulled back. Then enter.

About RIL. You should understand one thing about trailing stop and profit exit. If you want to make money, you need leave money on the table. When you trail stop, you are leaving some profits. But, this is essential if you want to make more. So, trail the stop = 3 * ATR = 3 * 47 = 141. So, your stop = 1079 - 141 = 938. Or you could put a stop below previous base at 970. Its up to you. As the stock goes up, raise your stop to capture profits. If it goes down, do not change the stop.

 

[mahmeds2000]

Hi vv,
I wanted to know abt. the following stocks:
1. mercator lines
2. naga arjun fertilser and chemical
3. energy development cmpny ltd.

thanks
Ahmed

 

[usha]

halo VV,
I want to invest around Rs.25000, for one year in good stocks like infosys, reliance, wipro or satyam where my money will not evaporate (as it did previously in day trading futures) and gives me good returns, (divedents and bonus shares ),Is it possible for you to tell me when to invest and which co is better and safe?
thanks

usha

 

[aca_trader]

halo VV,
I want to invest around Rs.25000, for one year in good stocks like infosys, reliance, wipro or satyam where my money will not evaporate (as it did previously in day trading futures) and gives me good returns, (divedents and bonus shares ),Is it possible for you to tell me when to invest and which co is better and safe?
thanks

usha

Good Returns, Dividends & Bonus Shares all in one year!! Really :

 

[rvgandhi]

Good Returns, Dividends & Bonus Shares all in one year!! Really :

Am sad that a senior member has to give a cynical response.

There are good growth stocks which are currently cum bonus and have a track record of giving dividends along with their quarterly results (TCS being a prime example).

 

[aca_trader]

Am sad that a senior member has to give a cynical response.

There are good growth stocks which are currently cum bonus and have a track record of giving dividends along with their quarterly results (TCS being a prime example).

First of all, It was not cynical. However, I beg pardon if anybody feels so.
Secondly it was a comment on the expectation of excess returns which was inherently built into the question.

 

[vvonteru]

halo VV,
I want to invest around Rs.25000, for one year in good stocks like infosys, reliance, wipro or satyam where my money will not evaporate (as it did previously in day trading futures) and gives me good returns, (divedents and bonus shares ),Is it possible for you to tell me when to invest and which co is better and safe?
thanks

usha

Is it 25,000 or 2,50,000. If it is 25,000, I would suggest you going for mutual funds.

You need enough capital to withstand drawdown. This is more important if your timeframe is long term. You will not have the luxury of taking out the trade when it goes bad like the short term players. If you are long term, if the trades goes down, you might consider buying in more rather than taking out. So, you need more money. Minimum 5,00,000. More is better.

 

[vvonteru]

Hi vv,
I wanted to know abt. the following stocks:
1. mercator lines
2. naga arjun fertilser and chemical
3. energy development cmpny ltd.

thanks
Ahmed

1. mercator lines
-- Touching the point where it started. If you are already there, hang on. Does stop make sense here. What would be the objective of this stop?

No new buying.

2. naga arjun fertilser and chemical
-- Same story. Its a dog. Market is in transition stage. If it takes off, then these dogs will fly. If not, they will stay low to the ground.

3. energy development cmpny ltd
-- This is better than previous two stocks. It is in trading range and had false breakout previously. Hopefully this time, it will take off. If you bought into this, I would have stop underneath the trading range below 28.

Do not buy any of these stocks. The bull market is no to fly these dogs along with. Wait the market to pass the transition. If the bull market continues, then consider these low priced stocks. Until then, if you can't keep your hands off, consider below leaders.

1. Reliance (Wait for pull back)
2. ITC (I don't like the V pattern with a narray channel. How long this pattern can continue?)
3. Dabur (Nice Pull back. Ready for entry.)
4. RelCapital (Enter above last 8 days high)
5. Wipro (Nice pull back. Ready for entry)
6. SatyamComp (Wait for 1 more day before entering)
7. Infosys (Wait for 1 or 2 days before entering)
8. Amarajabat (Enter about 6 days high).
9. Colgate ( I would have liked for it pull back more. But, still ok to enter).

These are the stocks I have been following. I did not run the scan recently. If I get more, I will add to the list.

 

[usha]

First of all, It was not cynical. However, I beg pardon if anybody feels so.
Secondly it was a comment on the expectation of excess returns which was inherently built into the question.

Ummh,
expectation of excess returns? ofcourse what far we all trade or invest? pl.observe the brackets and rolly eyes which apparently suggest what is "inherently built into the question".

Best wishes for good{expected} returns friend,
usha

 

[usha]

Is it 25,000 or 2,50,000. If it is 25,000, I would suggest you going for mutual funds.

You need enough capital to withstand drawdown. This is more important if your timeframe is long term. You will not have the luxury of taking out the trade when it goes bad like the short term players. If you are long term, if the trades goes down, you might consider buying in more rather than taking out. So, you need more money. Minimum 5,00,000. More is better.

halo vv,
Thanks. No it is not 2,50,000 and it is at present 25,000/only. I just wanted to invest my gift money in some shares, and the usual way of KVP, bank deposits.... oh! meee, a prestigious member of a great trading group like our traderji, 'thought I can invest more wisely, but you made me to sit up and rethink. (have already mentioned my thanks, so no I won't repeat it )
bye
usha