I can help you with stock chart reading

[punterji]

Hi Vonteru,

Can you please give me your analysis on

1. PBA Infrastructure
2. Piramyd Retail and
3. IDFC.

Also please tell us what might be next targets.

Thanks,
Vijay

 

[vvonteru]

In future, can you provide more info. Like, are you looking for new entry vs. existing entry. If existing entry, what price you entered. That way, my analysis would be to the point and useful to you. If not, I am shooting in the dark.

1. PBA Infrastructure
This is a fairly new stock. Right now it is in trading range. Don't take a new entry till it comes out of the trading range (above 180) and test 180 successfully. If you are already in it, trail the stop below the base under the trading range (I like 110. Lets not micromanage. But, its up to you based on your money management).

2. Piramyd Retail
This is a new stock too. The downtrend is gone. Picking up new trend. Friday was a bad day. If not, I would have liked the stock for new entry. I would trail the stop at 165/170.

3. IDFC.
I have nothing to say. There are charts you don't read. You skip.
If are already in it, try to escape. In future, try to find something interesting. I will be suggesting stocks in this thread with the charts. Look at them, you will get a hang of it for better selection in future.

Also please tell us what might be next targets .............

God knows. No body can tell what price the stock would go. If somebody is telling you, there are lying. Ya, they can say XYZ will go 1000. When they do, ask them when that will happen.

All I can tell you is the probability of stock going up or down. We just trail the stop. If the stock goes up, our stop goes up. We do that as far as stock goes. We don't care how far up the stock goes. In the mean time, we do take partial profits to generate income to our account.

I believe, PBA & Piramyd still have chance of going up. IDFC, I will not comment.

 

[punterji]

Hi Vonteru,

Thanks a lot for such a good analysis. From now on i shall give full details while posting my queries. Anyways, your reply to my post has answered my doubts.

Thanks a lot.
Vijay

In future, can you provide more info. Like, are you looking for new entry vs. existing entry. If existing entry, what price you entered. That way, my analysis would be to the point and useful to you. If not, I am shooting in the dark.

1. PBA Infrastructure
This is a fairly new stock. Right now it is in trading range. Don't take a new entry till it comes out of the trading range (above 180) and test 180 successfully. If you are already in it, trail the stop below the base under the trading range (I like 110. Lets not micromanage. But, its up to you based on your money management).

2. Piramyd Retail
This is a new stock too. The downtrend is gone. Picking up new trend. Friday was a bad day. If not, I would have liked the stock for new entry. I would trail the stop at 165/170.

3. IDFC.
I have nothing to say. There are charts you don't read. You skip.
If are already in it, try to escape. In future, try to find something interesting. I will be suggesting stocks in this thread with the charts. Look at them, you will get a hang of it for better selection in future.

Also please tell us what might be next targets .............

God knows. No body can tell what price the stock would go. If somebody is telling you, there are lying. Ya, they can say XYZ will go 1000. When they do, ask them when that will happen.

All I can tell you is the probability of stock going up or down. We just trail the stop. If the stock goes up, our stop goes up. We do that as far as stock goes. We don't care how far up the stock goes. In the mean time, we do take partial profits to generate income to our account.

I believe, PBA & Piramyd still have chance of going up. IDFC, I will not comment.

 

[babun]

Dear VVonteru,

Hi, thanks for starting a very good thread. I am following your thread thoroughly.
I ahve a question. You have described yourself as a swing trader. Now swing traders generally hold stocks for a very short time --- may be couple of days to weeks and normally book profits after 5/7/10 % rise.

Now the charts you advising are clean uptrend charts ---- like Godrej Consumer Prod, ITC or Voltas(although this chart is not yet discussed in ur thread but I feel you will like this one).

But in these cases one can remain invested for more than months also ---- alternately one can book part profits and can make a re-entry at pullback.

What you do generally? If you book profits then on what basis ---- after 10-20% rise or after getting an indication of oversold condition?

Another question ---- it is a bull market. Will we get such clean charts at bear market?

Regards,

Babun

 

[vvonteru]

Very thought provoking questions. It tells me you have been in the market for some time.

Am I a Swing Trader?
I like to be counted in the short term to intermediate trader group. My hold can be from 1 day to a week to a month to a year(s). At the same time, I don't believe in buy and hold philosophy. I don't buy a stock and think, ok, let me wake up after 1/2/3/4/5 years, the stock is waiting for you to take profits.

My Methodology?
Basic underlying pattern is pullback. The question is after what scenario the pullback is of interest to me? I can give you one scenario which is useful in the current market. 52 week high and pullback. Ofcourse, clean chart with a trending stock.
When I enter, I never enter directly in to stock. I enter with a buy stop above the yesterday's high (given that there was a pullback). The value above the high depends on the stock price and volatility. Once I enter, I determine my risk and initial profit target. I keep them same amount value. The risk depends on the stock price or chart pattern.

Once the profit hits, I sell 50% and move the risk stop to where I bought. At this point, I am breakeven and will be playing with table's (read other's) money. As the stock goes up, I move the stop. When, I do this, I don't move the stop close to the current price. I use bases to move the stop up, giving lot of room to the stock. This should be ok since we are already in the profit. Our goal should be to get the max out of the stock. Therefore, you choose not to micromanage at this point. So, thats the reason, I am more of a intermediate player.

Book the profits ...
In most cases, I don't sell all the shares directly. I sell in chunks when there is huge movement in the stock. For example, from the above you know I will sell 50% when the initial profit hits. Then, on further movement, if I decide that the stock has run good enough, I may sell 10 to 20%. I trail the remaining 30% with a stop. This may continue.

Another question ---- it is a bull market. Will we get such clean charts at bear market?
In a bear market (why do you think about it? Really!! Are you missing it already), you will have to go by sectors. What I mean is, there will still be some sectors which will trend. So, you will choose those (At this point, you would also short). In the worst case scenario (Lets say, if the market is in trading range, which is no no for us who believe in trend is your friend philosophy), you will choose sectors that trade independent of the market. For example, metals and oils. I hope bear market is long way to go.

Voltas
I do like the chart. But, looks like it is going through some minor correction due to change in gears, which it couldn't keep it up. Look at the action from 800 to 1100. It was a big move. Now, it looks like it is trying to digest.

 

[babun]

Thanks VVonteru for clear and point by point explanation of my queries and your trading techniques and strategies.
In one of your past messages you clarified that you normally don't look for tits and bits of fundamentals ----- however one can be assured of the underlying fact that a clean chart with good volumes fairly indicates strong fundamentals----- So here, normally we need not worry much about the fundamental sides.

Will come back to you again.

Regards,

Babun

 

[vvonteru]

----- however one can be assured of the underlying fact that a clean chart with good volumes fairly indicates strong fundamentals-----

Thats the whole point. A price of the stock already contains the fundamental information (somebody has done the homework for us. Remember, we want to make money easy way.) + what people speculate its future value is. Since there is speculation for future and future is not predictable, stock's price is adjusted once the future is known ( + again the future speculation). This goes on.

In the book, Market Wizards : Interviews with Top Traders (Paperback)
by Jack D. Schwager, famous trader, Ed Seykota says, "Fundamentals are Fun For Mentals". I woudn't go so far. No matter what methodology you use, as long as you follow it in all your trades (no exceptions) and use sound money management, you can make money. Simply put, do the following for success:
1. Control Your Mind (don't feel left out and jump into a trade. Think before you trade).
2. Select a methodology that suits you and you believe in. Use it for all the trades.
3. Have a sound money management so that you are in the game in spite of loses. No one loss should take you out of the market.

 

[rakamath]

dear vvonteru,
you have said "I enter with a buy stop above the yesterday's high (given that there was a pullback). "
If a stock's high during a day is say 550 and closes on the same day at say 520, then do you buy on the next day when it goes above 550?
on the next day can we give a buy order above 550 if the stock is trading below 550, or we have to give buy order only after it crosses 550?

 

[Vaishu]

Hi,

I am a newbie too...

Please suggest me on the following scrips:

Wipro@520
reliance communications@309
satyam@390
tata motors@444
canara bank@190

Also, can u pls explain 50 day EMA.

Thanks a lot.

-V

 

[punterji]

Hi Vonteru,

Could you please give your analysis about RCVL, Reliance Communications Ventures. I entered into this stock at 298 and then averaged it to 293.

It going up and then coming. Do you think its good to accumulate now or wait for some more time. And what do you think the impact of results will be on this.

Thanks,
Vijay