I can help you with stock chart reading

[vvonteru]

Hi VV,

Hi,
What do the charts say for GE shipping and SCI?
Can you explain why shipping stocks trade so cheaply? Both GE shipping - trading at PE of 4.7 and SCI - trading at PE of 3.6 are damm checp with good order books and Solid increase in Sales. Still the upside of these stocks is pretty limited. this is true for shippping stocks areound the world. Any idea why?

Manish

GE Shipping
-- I don't like the poor close on Friday. That may be due to general market sell out. If not the stock is looking good. Like all the leaders, it is in decisive stage. Wait 1 more day to see better closing. Enter above 240 to be safe.

SCI
-- I like GE Shipping better. 1 more down day will make MACD crossing down. So, decision time. If you want to enter this stock, only do so at 145. If the stock doesn't make it to 145, we will not be interested in it.

P/E low
-- I have no fundamental reason why some industry stocks have low P/E ratio. It may be that the investors don't see multiplied growth quarter after quarter or year after year. What is important is, when you compare P/E ratio, compare stocks with in a industry (probably U already know about it).

Can you give some commets on Ansal Properties and Zee Tele. Ansal looks very week on
the charts, I would like to enter at some point. Zee looks very solid, can it surpass 265-270 in the short term

Ansal Properties
--Can you give me BSE code
Zee Tele
-- Looks very good. May pull back in the next couple of days. 265-270 is very close. If that is your profit target, CMP 260 is not far. Don't split hairs over couple of points.

Whats the theory and approach of a pull back. Lets take the example of RIL, it pulled back today all the way to 1026 and closed at ~1035. How do you read from the chart how much it will pull back, waiting 1 day or 2 days of pullback is another question, what do you recommend. Also Dabur how much do you think it will go...pullback.

Another one if you can throw more light on is Reliance communication, what do you think is going on with this one.

Reliance
-- That was huge pull back. RIL volatility is 47. On friday, High - Low = 68, with a reversal, opening at high and ending close to low. It took 5 days to go from 1020 to 1100. It took 1 day to come back from 1100 to 1020. This tells you the balance of power between upside and downside. Sometimes, this may be in the heat of over all market and just fade off next day. So, in these conditions, we wait for next day or two to see if the stock recovers and is in pull back mode rather than sell mode. All this text is for new entry. If you are already there, your stop is in place. If the stock hits the stop in the next couple of days, you are out. Let the market hit the stop rather than you take it off. Why, because, no body knows it is going down until it goes down. Daily noise should not make you change previous plans.

Dabur
--It had reversal too. But, not bad like RIL. Today I was looking at the volume. On the upside, volume is low, compared to the May month's downslide. Thats something to take note off. Even though there have been 7 days of pull back, there has been not much downside in the last 3 days. An entry above the high of last 3 days + x is still valid. Do consider the low volume discussed before.

Reliance Communication
-- iCharts.in is showing wrong data for RCVL. I will get back to you on this one.

 

[rhk]

Thanks VV,

Appreciate your responses. For a fresh entry in RIL, do you think this is a good time or should one wait longer. How can one read from the charts how much a share will pullback, as you mentioned RIL moved back to 1020...were we expecting this from the charts.

Dabur kind of shares scare me from a day trader perspective - the range is limited. Strong share with low volatility - guess i am missing something here, can you help.

Thanks,
Rohit

 

[vvonteru]

Thanks VV,

Appreciate your responses. For a fresh entry in RIL, do you think this is a good time or should one wait longer. How can one read from the charts how much a share will pullback, as you mentioned RIL moved back to 1020...were we expecting this from the charts.

Dabur kind of shares scare me from a day trader perspective - the range is limited. Strong share with low volatility - guess i am missing something here, can you help.

Thanks,
Rohit

Given the drawdown in RIL on Friday, it is prudent to wait for 1 more day. If it recovers on Monday, we will revisit it.
How much pullback? I currently do not follow %. I just eye ball the chart. Looking at a chart, I can tell if it is just a pull back or sell off or can go either way. When it can go either way, like RIL, I wait next trading day for more light.

I agree with you that Dabur is not suitable for day trading.

My suggestions are not for day trading. They are for short term trading, holding for couple of days to weeks.

 

[mainak]

Mawana Sugar is exhibiting a pattern called Fish Hook. In the recent book by Elder, he mentioned that he likes to trade this pattern. The confusion is your reason to buy. You used fundamental reason to buy. But, you are looking for a technical reason to sell.

Technically, you could buy this stock if
1. It takes out 2 days high. or
2. If the Slow Stochastic crosses up and MACD does not cross down

I will look to sell the stock if
1. Takes out my stop based on 3 * ATR, if I used point 1 to buy.
2. If MACD crosses down, if I used point 2 above to buy.

See, when you enter a stock, you need an exit strategy. An entry will never determine whether you make a loss or profit. An exit will!!!. Inspite of this information, most of us only concentrate on Entry than Exit.

Having said the above, I will take this trade based on positive MACD, coming out of divergence. From here on, it depends on the general market condition. If the market continues to go up, you could see this stock going up from pull back.[/QUOTE]


Thanks VV for your insights...though i dnt know how to calculate the various levels still i have understoos one basic thing that is I should have an exit policy for every position that I take....

Can you please let me know and set my small portfolio right:
ITC- 15 @ Rs.183
Neyveli Lignite -16 @ Rs.81
SAIL -20 @ Rs.86
Shivalik Global- 20@ Rs.60

 

[vvonteru]

Thanks VV for your insights...though i dnt know how to calculate the various levels still i have understoos one basic thing that is I should have an exit policy for every position that I take....

Can you please let me know and set my small portfolio right:
ITC- 15 @ Rs.183
Neyveli Lignite -16 @ Rs.81
SAIL -20 @ Rs.86
Shivalik Global- 20@ Rs.60

Assuming that you are asking me in terms of short term trading, here is my take

ITC
--Look at the chart. I was not confortable with the narrow channel. That doesn't mean it will not go up in that channel. Observe there is an outlier channel. Friday draw down was due to market in general. If it goes down below Friday's low, I would be little concerned. If it does, may be it is changing the narrow channel trend or it is going down. That only time is going to tell. As long as 8 day EMA is above 50 day EMA, our bias should be upwards. Try the chandelier stop 159. ITC ATR (Average High - Low) is 9. At stop of (range between 2 to 3) * ATR should be OK. Chandelier uses 3 * ATR.

Neyveli Lignite
--Use stop of 51. I think you are hoping on this one rather than trading. Next time, use this small piece of advice to avoid these kind of situations. Never have a long position if 8 day EMA is less than 50 day EMA. Using this, you will avoid lot of bad mishaps. Once you become a pro, U can start looking at oversold conditions to go long, inspite of 8 day EMA less than 50 day EMA.

SAIL
--You bought at the recent high. RHK asked me about importance of pullback. You could see what happens when you buy at high. When the stock goes against you temporarily, you are a bit uncomfortable. Ur risk is more than when you buy at pullback price. Try stop 67.

Shivalik Global
--Put a stop below June 14 low.

On ITC and SAIL, considering getting out if MACD crosses down since the market is at a turning point to save some money.

 

[oilman5]

HI VVONTERU,got swing trading, by landry...thanks. coursey..forex trader

 

[kumar7]

Ansal Properties
--Can you give me BSE code
Zee Tele
-- Looks very good. May pull back in the next couple of days. 265-270 is very close. If that is your profit target, CMP 260 is not far. Don't split hairs over couple of points.



Thanx vv for your comments.

 

[kuldeep49]

Vvonteru,
What do you think of Colgate? It has been on a pullback for 3 days & starting to recover today. What should the entry, stoploss, and target be?
Regards
Kuldeep

 

[ramakrishnaiah]

What about Suzlon, After hitting highs, It is pulling back..

Any chances of it going back to <1000 ?.. What rate should I buy?

 

[vvonteru]

What about Suzlon, After hitting highs, It is pulling back..

Any chances of it going back to <1000 ?.. What rate should I buy?

I really love Suzlon Energy Ltd. Thanks for getting us the attention. Here are the reasons I like this stock.

1. Look at the volume from May 1st to June 26th. This was the time of its drawdown. Compare this volume to period June 27th to today. Volume during drawdown was low compared to specially high volume during recent updays.

2. Belongs to Oil Sector, which is one of the 2 best performing sectors (the other being IT sector).

3. It does not have the V like pattern. I am looking slower transformation from the recent downtrend. This stock has it.

4. 8 day EMA crossed up 50 day EMA. This is my condition for going long.

5. Its setup as First Thrust pattern to go long.

Suzlon has ATR around 70. Lets use stop = 3 * 70 = 210. So,

Setup: First Thrust Pattern
Entry: 1100 (above today's high + 25)
Stop: 890 (1100 - 210)
Initial Profit: 1310 (1 * Risk = 1100 + 210 = 1310. 1310 is close to May's highs. Ofcourse, we will be looking for multiple of Risk. I will follow on with an update to the stop as the stock moves.)
Position Size: Please use my calculator Excel Spreadsheet. It takes into consideration stocks Volatility. Don't use fixed position for each stock.

Note: If the stocks gaps up above 1100, wait for first 15 minutes to allow the stock to form recent high. Buy above the recent high formed in the 15 minutes. If the stock does not go above the recent high, avoid buying. It might be a reversal.

I will update the stop info after I get the update for my database. I will also add more entries for other stocks I am following (including Colgate).

I am still sceptic about the market. Except some leaders, other stocks have been low. You can read it as not so great market (unlike the bull we have seen before) where only the best/blue chips do good. Others stay low. So, continue to concentrate on the best sectors and stocks in those sectors. Avoid others. Hopefully, these leaders pull the others overtime.