I can help you with stock chart reading

[jntrade]

I was going to find a way to place charts. Check this stock out.
Stock Scrip: MORAREALTY
Pattern: Acceleration and Persistent Pullback
http://photos.yahoo.com/rreddy05

Hi vvonteru,
MORAREALTY touched 686 today and closed 655.
Is it a pull back?
Can we enter here?
what will be stop loss?
also Tvs motors.
Is it time to enter?

Some times a huge volume spike is seen on the chart(like previous friday on morarjee realties- http://in.finance.yahoo.com/q/bc?s=MORAREALT.NS&t=5d) Some times price shoots up with that kind of spike in volume and another time price go down sharply.Yet another time no big movement in price(http://in.finance.yahoo.com/q/bc?s=GABRIEL.NS) what this mean?

Thanks and regards

 

[vvonteru]

Enter with a buy stop ...
Use limit orders. Wait for it cross the price and place strictly limit orders.

Wipro@520
For last 6 months its been trending. The trend line is still in tact. Just that it has pull back into short term trading range between 487 and 533. At this point, I would put a stop below the base at 485. Look at the chart.

reliance communications@309
I can't read anything from the chart. I use TA. So, less data doesn't help me. You might have bought basing on Fundamental analysis. Did anything change in your plan.

satyam@390
The current price is 836. Are you asking me what to do? Whatever!!

tata motors@444
Same as above. U are in good position. Take partial profits and trail the stop below previous base. Give some room for the stock as U are already in profits. As it goes up, we go up.

canara bank@190
You bought it at right point, at the bottom of the parallel trend lines. Your objective should be to take profits at the top of the trend lines. This is a different pattern. Look at the chart.


Also, can u pls explain 50 day EMA.
I am not going to go thru the technicals (there is so much info on the net). Just realize the importance of 50 day EMA. It is the heart beat of a stock (ofcourse, people use 200 day EMA also). But, once a stock moves below 50 day EMA, try to avoid going long. Now people will argue that it may come back etc etc. What I am just saying is that the probability of a stock below 50 day ema going up is less than a stock which is above 50 day ema. So, I rather bet my money on something which is above 50 day ema. So, in real time, 50 day EMA is used for filtering stocks as well as a buy point for people who like the fundamentals of the stock.


---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.
Look above. I am not an expert on IPOs. I have to pass on. Having no data doesn't help me. When you buy IPO, believe in the company. Make decisions, based on changes in the fundaments of the company. About averaging, don't add to a losing position. Wait till you make money on the stock. When it goes up and then pulls back, thats when you want to add. Try to add only 50% or 25% of existing position. Don't make existing profitable position a losing one.


MORAREALTY touched 686 today and closed 655.
---Is it a pull back?
No. Its just noise. Remember this is real time. Its no text book where you see clean charts, because they knowingly pick it for you for clarity.

---Can we enter here?
No. There is no setup now. If you are already in it, thats fine.

what will be stop loss? No setup.

---also Tvs motors.
Is it time to enter?
The stock has too much volatility right now. The stop loss has to be far. So, avoid for now. May be its a new pattern. Let it settle down.

---Some times price shoots up with that kind of spike in volume and another time price go down sharply.Yet another time no big movement
As I said earlier, this is real time. There will be noise. The volatility is caused due to several reasons.
1. Some news has come out and public is reacting.
2. Volume of stock is less. People can play the stock.
3. Short squeeze. The stock has been shorted a lot. When it gets buying a lot, people are getting stopped out or get a margin call and cover orders rushin.
4. Value of the stock. Higher the value, more volatile the stock is.

There might be several other reasons. Try to avoid low volume stocks. You can avoid stocks based on their existing pattern. If you really like something inspite of its volatility, use stop loss, taking into consideration its movement.

 

[vvonteru]

Stock Setup

Stock Scrip: MCDOWELL-N
Pattern: Acceleration and Persistent Pullback

Look at the sector and chart attached.

Disclaimer: You know the disclaimer. Sometimes, I am not confident about the data I get from NSE. There is some cleaning up I need to do (specially split info). I try to verify other sites the chart of the scrip. Further, I am trying to build the sector data. Its not complete. Lets use what we got.
I just do my best. Finally, whether to go in or not is your decision.

Reference Links:
Charts: http://icharts.in/
Sector & Charts: http://alpha.myiris.com/shares/ecoWatch/index.php
Sector & Indices: http://www.ndtvprofit.com/bb/default.asp?Pass=Automobiles

 

[bharatk8]

hi vvonteru........what do u mean to say by"Don't go after some truth which you think no body knows"

 

[vvonteru]

......what do u mean to say by"Don't go after some truth which you think no body knows

Hopefully, you are not asking this question for argument sake. Because, I am not interested. We are here to make money. My trading philosophy (as I stressed in most of my replies) is that no methodology is wrong or right. You test it in the real market and you make money, then use it. Thats your edge. Every body should find their own edge (what they can do their best) and use it repeatedly (this is the key).

What I meant about the statement is, make trading simple. When you start trading initially, we come to the market with some pre-concieved notions. That you can easily make money and fast (read greedy). When you don't, you think people who are making money know something you don't know. They are using indicators and waves etc etc which you are not using. Thats the reason you are losing money. If you didn't have this thought, thats fine. I am talking in general.

Then you go after reading books, using new indicator for every new trade, change methodology etc etc. In the mean while, your portfolio still doesn't improve. I have done this like anybody else. Ultimatly, what I found is that, trading is just common sense. It is using probability to make your chances of winning high. Accepting the fact that there will be losses and it is the business risk. That winnings are going to compensate your losses and make you profits.

In essence, don't try hard. When you see the chart, it gives most (80%, to give a value) of the information. The remaining 20% may not relevant in most cases. So, why work hard going after that 20%. Since, you are leaving 20% (or whatever info) you may get some losses. But, assuming that you are following your methodology to the core, the losses may be minimal compared the effort you are not putting. Just make life easier. Don't spend more than couple of seconds (max 1 min) looking at a chart. Within that time, if you like it, study more like
1. Look at all the data (Ofcource, 1st thing you want to make sure is the overall index is doing good). Check it fits your methodology (this was the reason you picked this stock for detailed review)
2. Look at the sector
3. Check whether your position in this stock fits your money manangement plan
4. Make a go or not go decision.

Having said the above, nobody is stopping you from researching. You can continue to do that. I decided I am not going to do it. Its just personal. I found my edge and my final truth ( I spent my time before). I will just stick to it.

 

[ragh_ash]

......what do u mean to say by"Don't go after some truth which you think no body knows

Hopefully, you are not asking this question for argument sake. Because, I am not interested. We are here to make money. My trading philosophy (as I stressed in most of my replies) is that no methodology is wrong or right. You test it in the real market and you make money, then use it. Thats your edge. Every body should find their own edge (what they can do their best) and use it repeatedly (this is the key).

What I meant about the statement is, make trading simple. When you start trading initially, we come to the market with some pre-concieved notions. That you can easily make money and fast (read greedy). When you don't, you think people who are making money know something you don't know. They are using indicators and waves etc etc which you are not using. Thats the reason you are losing money. If you didn't have this thought, thats fine. I am talking in general.

Then you go after reading books, using new indicator for every new trade, change methodology etc etc. In the mean while, your portfolio still doesn't improve. I have done this like anybody else. Ultimatly, what I found is that, trading is just common sense. It is using probability to make your chances of winning high. Accepting the fact that there will be losses and it is the business risk. That winnings are going to compensate your losses and make you profits.

In essence, don't try hard. When you see the chart, it gives most (80%, to give a value) of the information. The remaining 20% may not relevant in most cases. So, why work hard going after that 20%. Since, you are leaving 20% (or whatever info) you may get some losses. But, assuming that you are following your methodology to the core, the losses may be minimal compared the effort you are not putting. Just make life easier. Don't spend more than couple of seconds (max 1 min) looking at a chart. Within that time, if you like it, study more like
1. Look at all the data (Ofcource, 1st thing you want to make sure is the overall index is doing good). Check it fits your methodology (this was the reason you picked this stock for detailed review)
2. Look at the sector
3. Check whether your position in this stock fits your money manangement plan
4. Make a go or not go decision.

Having said the above, nobody is stopping you from researching. You can continue to do that. I decided I am not going to do it. Its just personal. I found my edge and my final truth ( I spent my time before). I will just stick to it.

hi
can u tell me how to use volume. i am actually stuck on this.
what is "overhead supply", good volumes(relative to what), iilquid stocks etc.
is volume also subjective to the time frame v are seeing
pl help
regards

 

[panvel_134]

may I buy Facor alloy now at 2.60/?

 

[panvel_134]

may I buy Facor alloy now at 2.60/?

Also give some word about National steel and agro.

 

[vvonteru]

Before we delve into anything below, I want to touch on the market in general. Please avoid new positions for now. We will have to adopt wait and see approach with the market. Stick to the stops you have (for traders). Don't move them as the market approaches your stops. Elder calls them losers, who move stops down.

can u tell me how to use volume. i am actually stuck on this.
what is "overhead supply", good volumes(relative to what), iilquid stocks etc.
is volume also subjective to the time frame v are seeing
--- As I mentioned before, price and volume are the most important elements to look for in the market. Everything else (indicators) are there to remove the daily noise and see clearly what is happening (with crowd behaviour). For example, SMAs, EMAs, MACD etc.

Overhead Supply
--- Lets pick a stock that is beaten down (say its current price is 50% of its high). Some part of the crowd thinks this stock is at value. They think this stock was 100 3 months back, now its 50. They say its cheap. What they are forgetting is a group of people who bought all the way from 50 to 100 3 months back. This group is called Overhead Supply. This group is just waiting badly for the stock to go up so that they can dump (sell) theirs. Elder gives a perfect common sense example for these kind of stocks. Think about 2 scenarios.
Scenario 1: Falling down 3 stairs. U just wipe your butt off and there you go.
Sceanrio 2: Falling down 10 stairs. U will first check whether you can breath. Then check whether hands and legs are fine. Then look for people to help you (sector action). Then try to get up. You will fall down. This repeats couple of times. Finally (assuming that you didn't end up in hospital with broken hands/legs/ribs), you will get up.

From our perspective, these kind of stocks have a lesser probability to make you money (from Buying point of view) than a stock which has just made 52 week high and has no overhead resistance. Just like water, stocks go the path of least/no resistance.

good volumes(relative to what), iilquid stocks etc.
is volume also subjective to the time frame v are seeing
--- When you see a chart of a stock (picked for more review. Please look at my previous reply), you look at the complete data (for all years and different time frames). You will look what happened to the price of the stock. Similarly, u will look at the volume and indicator Average Volume (to remove noise/sudden spikes in a day). When they say "good volumes", what them mean is price action supported by increase/decrease in volume (average volume). That there is really a demand/no demand for this stock.
--- Average volume can help to filter low volume stocks. Low volume stocks are hard to liquidate (sell) your positions. U will put a sell order and no one is there to buy. This means, you will have to reduce your price and then try again. This results in high volatility of the stock and lot of gaps. U need to pick stocks that have good (based on Ur confortability) average volume. That do not have lot of gaps (they result in lot of difference in buy vs. ask price). Stock elimination is as important as stock selection. When in doubt, leave it.
--- Volume Time Frame: Definitly. Lets say a stock's volume has gone up last 2 days. When we see that, our immeadiate thought is, something is going on. Why are people interested? How about 5 days volume spike. There is really something going on. How about 3 weeks. 3 months? 6 months? As the time frame increases, your confidence on the price action supported by volume data increases. You will trust the price action better.

may I buy Facor alloy now at 2.60/?
No. Don't go after low priced stocks. They can be easily played by market makers. They suck you in.

Also give some word about National steel and agro.
I don't like the charts for new entry. Are U are already in? If you are, trail the stop below previous base.

 

[joy_mitali]

hi VVonteru--
The goings really too good---Congrats friend----for the simplified expressions
Regards,
joy_mitali