I can help you with stock chart reading

[D_arjun]

Hi VV

How do you check volatility? Which indicator?

 

[vvonteru]

Hi VV

How do you check volatility? Which indicator?

I use ATR - Average True Range. Here is the link for calculating ATR. Use Microsoft Excel to calculate ATR.

http://www.stockcharts.com/education...indic_ATR.html

I am also providing the calculator, attached in earlier reply.

 

[shantanu10]

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.

Hello VV,

I know by reading your posts, you use todays'high + x

How do you arrive at x? In case of Suzlon how do you arrive at 25 Rs. (1075 + 25)

 

[vvonteru]

Hello VV,

I know by reading your posts, you use todays'high + x

How do you arrive at x? In case of Suzlon how do you arrive at 25 Rs. (1075 + 25)

Here is link for my explanation of what I am looking as part of my Setup and Entry.
http://www.traderji.com/50313-post646.html

I don't enter directly into a stock. I want the stock to go up enough to trigger my entry point. This triggering point's objective is to make sure the stock is continuing the upward move after the pullback. This way, you can avoid those pullbacks that lend themselves into sell off. This triggering point can be either of the following:

1. today's high + x. If the stock's today's volatility comparable to its ATR (average volatility over 10 days) and ends up close to Low of the day, you can use. Choose x so that High + x - Close = (70% to 90%) of ATR.

2. If today's high + x is close to previous day's high, use Previous day's high + x. Here x should be below 25% of ATR. Look at Colgate. Friday's high + x provides better proof net than today's high + x.

3. N day's high + x. Use this if there was a failed attempt on Nth previous day to go up. Buying above this failed attempt gives you a sense of security of the stock going up. Again, choose x to below 25% of ATR. Look at RelCapital. Going above June 27 high is better option. Look also at amarajabat. Using this techinique would have avoided you in buying these stocks.

x is more of an approximation to assure yourself that the stock has enough will to go up. Consider stock's ATR in calculating x.

 

[vvonteru]

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.

Lets use Chandelier's Stop: 914

Consider the below setups for entries.

2. Colgate: ATR = 22
Setup: Change in Trend Signified by 8 day EMA crossing up 50 day EMA
Entry: 416
Stop: 351
Profit: 455 (52 week high)

3. Wipro: ATR=25 (Consider the risk of Infosys coming up with results)
Setup: Change in Trend
Entry: 510
Stop: 442
Profit: 570

 

[eskay_raut]

Hi vvonteru,

Saw a triangle formation on charts of siemens. May have a breakout probably. need a confirmation from your side.
Please advice.

Eskay

 

[ramakrishnaiah]

Great explanations!.. Thanks a lot vvonteru.

 

[ragh_ash]

Hi vvonteru,

Saw a triangle formation on charts of siemens. May have a breakout probably. need a confirmation from your side.
Please advice.

Eskay

Really Eskay?
did u see Triangle on Siemens or got it from some Blog?
be honest to yourself.
cheers

 

[ramakrishnaiah]

Looks like suzlon is slipping again.. Is is just a continuation of pullback or are we entering bear phase?, 1100 as entry point that you mentioned is long way off..

 

[kenneth]

Hi VV

Thank you for the explanation and Use of ATR and your Excel Calculator

Hi VV

How do you check volatility? Which indicator?

For those who are using AmiBroker they can get all the info on indicator

Position Sizing and Risk Price Graph

http://www.amibroker.com/library/formula.php?id=459

The Position Sizing Price Graph Bar allows one to automatically view ATR, 3* ATR Stop Loss how many shares should be purchased based upon a 1% or 2% Risk Management Rule while using Average True Range as a basis for stop losses

Cheers
Ken