Swing trader

What is this Traders Carnival ??

2016-12-27T18:25:00.003+05:30

As the name suggests, it is a carnival of traders !!

This concept was started by DJ (@ra1nb0w) who is from Bangalore.

Official Twitter handle is @Traderscarnival .

The first edition was held in Bangalore in 2012, then Pune in 2013, Goa 2014, Mumbai 2014, and it went international in 2015 (Bangkok). This year it is being held in Mumbai.

It is a gathering of traders (full time or part time) who are passionate about the stock market, and are open to exchange ideas over 3 days (2 nights included, since it is a residential event).

Firstly, ALL the speakers are humble selfless persons, and none of them are paid for speaking at the event (not even their travelling expenses). All the speakers have spent many years in the market and have seen all ups and downs that a trader goes through. It will not be wrong to say that all of them have been humbled by the market at some point in their career, and they know very well who is the BOSS --the market.

They have learnt it the hard way, since at the time they started, internet, blogs and e-books were non existent or very slow and few. All of them would agree that had there been such an event in their initial years, much of their miseries would have been reduced.

One might argue that with the advent of the internet, twitter, blogs, webinars, it is easier to learn about the stock market online. Yes and NO....a BIG NO, for the simple reason that during the Traders Carnival, all participants and speakers stay at the same venue throughout the event, and the process of sharing ideas goes on right from the time everyone arrives, till they depart (with a heavy heart). The learning process is enhanced much more when you actually meet people and listen to them and it goes on throughout the event.

For me, this sharing of ideas and networking is the biggest takeaway from this Carnival.

Many people have asked me if this event is for a newbie or someone who cannot read charts well, and a simple answer is YES! They can start the process of gaining knowledge by interacting with others.

It is a fact that one can gain not only from successful strategies, but also from failed strategies and failed traders. The whole group becomes like family, and share their failures as well and no one laughs at them or mocks them, like one sees on Twitter. Neither does anyone boast about his success.

Most of the traders carry these friendships well beyond the event, and keep in touch on a regular basis in the future, sharing their studies of various charts and potential trading strategies and trade ideas.

No wonder there are a few participants who have attended ALL TC events, and others who have attended more than one, and keep looking forward to the next event.

This event has one big disadvantage though.

Traders who like to retire early in the evening will find it tough since sometimes the sessions go on till past midnight and even after that, participants get together in small groups in someone's room and discuss maybe till 2am-3am.

For the entire duration, every participant eats, drinks, breathes stock markets and oh yes, even sleeps with fellow traders (after all...rooms are on twin sharing basis !!)

A small update on Nifty and BN options - not very bullish for this expiry

2016-07-31T18:09:00.000+05:30

Although Nifty is still bullish, the CE charts are giving some different ideas. It does not mean that Nifty is set for a fall yet since there is no bullish indication from the Put charts.

This can only mean one thing - market might remain range-bound for near term.

The 8700 CE chart shows a topping pattern (so do other Nifty CE charts), and unless this 8700 CE crosses and sustains above 145-150, selling might appear at the top; this can also mean that Nifty can continue to go to a bit higher, since the premium on this CE is quite high as of now.

However, a premium of 145-150 on the 8700 CE means Nifty might find it difficult to cross 8850 this expiry, which is about 200 points higher from higher on Nifty (about 2.5%).

Premium on monthly 19000 CE is also higher, but this chart also shows a topping out pattern, though Puts in BN are not yet showing any bottoming out pattern.

The idea this expiry then might be to short the weak stocks when these CEs go towards the top of the range, and buy the strong stocks when these CEs show some strength on a dip, as long as Puts do not show strength.

Some charts Post - Brexit

2016-06-26T18:16:00.000+05:30

Some clues from Nifty and Nifty Options charts that I tweeted earlier today:

8200 CE:

10-12 on 8200 ce very crucial on June 8200 CE; if that holds, it can see 50 - 80 or higher

July 8300 ce gives a similar pattern; as long as 20 holds, Nifty is bullish

Nifty has broken the trendline from the 6825 low, however, Sensex hasn't (closed abv)

Nifty took support on a previous resistance band near7900-7950 in spite of panic (also the IHS breakout level)

However, on the upper side, 8300- 8350 might act as a resistance again

On the bearish side, similarity between Aug'15 and now is also scary; this will be known at 9.15 am on Monday though

The Nifty monthly chart says, whats all this fuss about ?

What the options data reveals for some key stocks

2016-03-12T21:47:00.002+05:30

Although the charts are still bullish for almost all indices and key stocks, I observed something interesting in the options data.

I jokingly call this study MRI scan, since this is not something that a chart reveals, and one needs to dig a bit deep to diagnose it.

So what is this MRI Scan? This is the Put Call ratio of individual strike prices for any index or stock PROVIDED the options are liquid for that stock.

Based on my observation over the years, a PCR above 1-1.2 is bullish for that strike price ( level), and a PCR below 0.8-0.9 is bearish for that strike price (level), especially when expiry approaches.

This means that if the PCR for a stock at a certain level is below 0.9, and yet the stock is trading at a price above that level, AND if the PCR for that level does not rise sharply over the next few days (through Put writing and / or Call covering), the stock can fall ..at least to a level where the PCR gives it support (0.9-1.0).

I am giving below MRI scans for some key stocks.

How to study this ? - note current price of a stock , and check PCR at that level and a couple of levels below and above cmp.

This post is not a call to go short at all, but to keep an eye on how the PCRs shape up in coming days.. there are only 12 trading days till expiry in March now.

What is Traders Carnival ?

2016-01-23T16:56:00.002+05:30

Traders Carnival is a gathering of traders who have a passion to learn more on the subject and also share what they have learnt over the years.

Traders Carnival is the brainchild of DJ as he is known among friends (@ra1nb0w on Twitter). I have been involved with Traders Carnival right from the first year, and DJ calls me Hitler - always playing a Devil's advocate to his crazy brainwaves.

Without going too much in the history which you can very well read on the website, here is my view of how and what people can gain from this event.

Firstly, ALL the speakers are humble selfless persons, and none of them are paid for speaking at the event; not even their travelling costs. All the speakers have spent many years in the market and have seen all ups and downs that a trader goes through. It will not be wrong to say that all of them have been humbled by the market at some point in their career, and they know very well who is the BOSS --the market.

They have learnt this the hard way, since the time internet itself was not so common (and fast). All of them would agree that had there been such an event in their initial years, much of their miseries would have been reduced.

One might argue that with the advent of the internet, twitter, blogs, webinars, it is easier to learn about the stock market online. Yes and NO....a BIG NO, for the simple reason that during the Traders Carnival, all participants and speakers stay at the same venue throughout the event, and the process of sharing ideas goes on right from the time everyone arrives, till they depart (with a heavy heart). The learning process is enhanced much more when you meet people and it goes on throughout the event.

For me, this sharing of ideas and networking is the biggest advantage given by Traders Carnival.

Most of the traders carry these friendships well beyond the event, and keep in touch on a regular basis in the future sharing their studies of various charts and potential trading strategies and trade ideas.

No wonder there are a few participants who have attended ALL TC events, and others who have attended more than one, and keep looking forward to the next event.

Traders who like to retire early in the evening will find it tough, since sometimes the sessions go on till past midnight and even after that participants get together in small groups in someone's room and discuss maybe till 2am-3am.

For the entire duration, every participant, eats, drinks, breathes and oh yes, even sleeps with fellow traders (rooms are on twin sharing basis -- to clarify !!)

For me, the highlight out of all the 4 events so far, was an interactive session which was held in TC 2014, Goa, on the subject - 'Pros and Cons of being a full time trader'...it was a real eye opener, and the session is going to be repeated this year too.

For more details, contact the Event Organiser directly at +91 84949 25324 or at dharmarajj@gmail.com

Should you need more information about the event and possibly register, www.traderscarnival.com

Last quarter and full year 2015 in charts

2016-01-03T19:44:00.004+05:30

Here are quarterly and full year charts for the year 2015 of some key stocks.

(Comments are just observations and not any recommendation to trade)

NIFTY :

On a broader time frame, drifting down. Time correction, rather than a price correction ?

Bears will call this a spinning top on yearly.

SENSEX:

On a broader time frame, drifting down. Time correction, rather than a price correction ?

Bears will call this a spinning top on yearly.

RELIANCE:

Respected the long term trend line; looks bullish after a dip.

Double bottom on yearly.

INFY:

Doesn't look too bullish (can be wrong).

TCS:

Consolidation, but drifting down on quarterly as well as yearly.

ONGC:

Bounce toh banta hai !

BPCL:

Consolidation time ?

HPCL:

Consolidation time ?

ITC:

Doji on quarterly, and bearish engulfing on yearly...stay away ?

HUL :

Looks bullish.

ACC:

Consolidation on quarterly, but bearish yearly chart.

GRASIM:

Will be great if it breaks out.

AMBUJA :

Consolidation on quarterly, but bearish yearly chart.

ASIAN PAINTS:

Looks bullish.

BANK NIFTY :

Consolidation? sideways for some more time ?

SBIN :

Had said 'waste of time' last quarter, did that; time for a bounce this year?

PNB :

Bounce toh banta hai ?

ICICI BANK :

Consolidation? sideways for some more time ?

AXIS BANK :

Consolidation? sideways for some more time ?

MARUTI :

Hanging man on quarterly?

Iska petrol khatm hi nahi hota !!

HEROMOTOCO :

Looks bullish.

EICHER MOTORS:

Consolidating.

LT :

Bearish quarterly chart, but bounce toh banta hai.

Consolidation on yearly chart.

BHEL :

Bounce toh banta hai.

BOSCH :

Consolidation on quarterly, but bearish yearly chart.

CAIRN :

Bounce toh banta hai.

DR REDDY :

Bearish on both time frames.

CIPLA :

Not (yet ? ) weak like some other Pharma stocks.

LUPIN :

Consolidating, good support near 1580 - 1600.

SUN PHARMA :

Not interested.

TATA STEEL :

Is it a long term bottom near 200 ?

TATA MOTORS :

Bullish harami on quarterly, but.............

Bearish engulfing on yearly.

APOLLO TYRE :

Consolidating.

RELIANCE CAPITAL :

Bullish !

RELIANCE INFRA :

Bullish !

RCOM :

Bullish !

BHARTI :

Bullish !

It is strange - the general view is that after the launch of Jio, other telecom stocks will go down, but some are looking bullish.

A Poll for year end closing of Nifty

2015-11-17T21:25:00.001+05:30

QUARTERLY CHARTS OF INDICES AND KEY STOCKS

2015-10-05T19:28:00.000+05:30

QUARTERLY CHARTS OF INDICES AND KEY STOCKS

(Comments are just observations and not any recommendation to trade)

NIFTY :

Be careful near 8450 -8500

BANKNIFTY:

Bearish engulfing quarter ?

RELIANCE :

Long term trendline support

INFY:

Bullish engulfing quarter ?

TCS :

Waiting to erupt

ITC :

Long term trendline support.

HINDUNILVR :

Very close to long term trendline support.

SBIN :

Waste of time ?

ICICIBANK :

Long term trendline support.

HDFCBANK :

Doji on quarterly chart !!

AXISBANK :

Drifting downwards.

DLF :

Looks promising.

RCOM :

Looks promising.

EICHER MOT :

Similar pattern in the past. 1 red quarter between 2 green ?

BOSCH LTD :

Double top, drifting down?

TATASTEEL :

Bounce toh banta hai, but till where ?

HINDALCO :

Waste of time.

MARUTI :

Massive chart !!!

TATAMOTORS:

Bounce toh banta hai, but till where ?

LT :

Double bottom, but might remain rangebound (bearish engulfing)

BHEL :

Waste of time !!

BHARTI :

Looks promising ?

LUPIN :

Massive chart.

SUN PHARMA :

Forming a base at higher levels ?

WOCKHARDT:

Odd looking chart, but bullish.

CIPLA :

Consolidating for next rise

GLENMARK :

Broken out ?

APOLLO HOSPITAL :

Massive chart.

AJANTA PHARMA :

Massive chart.

SUZLON :

Might have taken baby steps.

AMARA RAJA BATT :

Massive !!

ESSAR OIL :

Looks good.

BPCL :

Consolidation time ?

HPCL :

Odd candle.

ACC :

Consolidating.

GRASIM :

Resisting near previous highs.

ULTRATECH :

Bearish cloud cover this quarter? Support crucial.

ABIRLANUVO :

Resistance or breakout ?

CEAT :

Massive !!

Where do you think Nifty will close on 31st December 2014?

2014-11-04T22:33:00.004+05:30

Hitler misses the Bull run!!!

2014-10-29T16:36:00.000+05:30

NTPC update - will it disappoint bulls once again

2014-10-26T19:49:00.002+05:30

Since the last post on NTPC, with specific reference to the OI of 150 CE, it seems the 150 CE writers are not willing to give up, and in fact the OI has increased from 16 odd to 18.72 lakhs.

The levels on the 150 CE chart indicate that the CE can rise to 1.5-1.8 or even 3, which means the stock can cross 150, but as long as NTPC does not cross 153, these CE writers are safe with their written CEs.

Since we are heading into expiry week, this OI becomes even more important, and hence needs to be closely watched.

Those who have bought the CE below 1, can consider booking it near 1.5, but at the same time need to keep an eye on the OI of this CE.

It is possible that the CE might lose in price from 1.5, but the OI too can start reducing.

Another hint can come from OIs of 145PE (OI 3.34 lakhs) and 150 PE (OI 2 lakhs). If these OI figures start going up, NTPC can rise

If this happens, it is worth buying it again below 1.

It is all about the Push from the OIs of the PEs and the pull from the OI of the CEs, and whoever is stronger will win.

To summarise - watch for RISE in OI of 145 and 150 PEs, and also FALL in OI of 150 CE.

If this does not happen, NTPC will once again disappoint bulls, as it has done so many times of late.

If following so many figures is difficult, just wait for updates on Twitter.

Happy trading .....

An old observation on OI on stock options - watch NTPC now

2014-10-20T21:21:00.000+05:30

NTPC suddenly shot up in the last hour of trading today.

Looking at the OIs of various CEs, it is seen that 150 CE has the maximum OI (16.08 lakhs).

It has been observed that when a stock rallies beyond the strike price that has the maximum OI, it rallies further for at least another 10%.

Looking at the chart of 150 CE, there is a resistance at 3-3.2.

It can be safely said that once NTPC crosses 153-154, it can rally for another Rs. 15 to say 165-170.

Nothing is certain in the stock market, but it is worth keeping the above in mind and if and when NTPC 150 CE crosses 3.5, you can aim for a target of 15 on it (but trail it, and not wait blindly).

It will also help to keep an eye on how much the OI of 16.08 lakhs reduces, since that will be a big indication of things to come.

Happy trading.....

"Jara hatke" study

2014-10-09T19:12:00.002+05:30

I noticed the triple bottom on SBI on the monthly chart (August, September and October so far), and realised if this bottom holds, SBI can give a good rally.

This made me plot the following chart:

This chart is the ratio of BankNifty futures to Nifty futures on hourly time frame.

At present it is trapped in the range 1.9 to 2. A breakout above 2, can take it to 2.1.

These fractions look small, but if you apply the ratio to Nifty, it becomes clear.

8000 x 1.9 = 15200

8000 x 2 = 16000

8000 x 2.1 = 16800.

It might be argued that Nifty futures will not remain static, and this ratio can still remain range bound.

However, it is worth going long in BankNifty when the ratio drops to 1.9, and hold long till the ratio hits 2, and on crossover 2.1.

This can also give good 'Pair trades' for those who do it regularly.

The historic high is 2.15 !!

Nifty at a long term support

2014-09-26T13:48:00.001+05:30

The low on Nifty spot is bang on a long term trendline right from where this bull run started.

If this support holds, there can be a rally - whether a pullback rally, or a rally to new high, time will tell (rather options charts will tell).

It makes sense now to hedge shorts, or even take naked longs with 7800 as stop loss, on Nifty spot

Same support, but at a higher level this time

2014-09-24T20:46:00.001+05:30

It was mentioned in the post dt 16th September, why the level near 7925 might give support and had said --

"If this region gives support once again, bulls have some hope to make another attempt to conquer the formidable 8150 - 8200 resistance."

Nifty did get the support and did make an attempt to cross the formidable resistance, but failed (in the process made a triple top at 8160 on 3 consecutive days, this top is also a double top on weekly charts now, unless crossed in the next 2 days..unlikely! )

As explained through tweets, this was visible on the 8100 CE which made a double top near 83, and this CE crashed to a low of 2.25 today !

Nifty made a panic low at 7950 today and again hit the 200 hourly moving averages.

8000 CE also hit the support band (tweeted a few times), and went below it briefly in the panic after the SC verdict on 'Coalgate'.

Nifty is now oversold on hourly charts, and with expiry tomorrow, it will be interesting to see if expiry is closer to 8100 or 8000. My guess is, it will be between 8050 and 8075)

It is likely that Nifty might be rangebound next week too (7930--8150)

The bullish Harami has played its part...now what ?

2014-09-18T21:33:00.000+05:30

Every candlestick pattern can be called a pattern only if there is a followup action in the next couple of days, and the Bullish harami candle of yesterday got a confirmation straightaway today.

Now, what next? Logically, the previous all time high should now be crossed in coming days.

Below are some facts based on charts of futures and options that can help in managing the long trades.

Firstly, bears can claim that the rally today was just a gap fill (8100 to 8134 was a gap over the weekend) on Nifty futures.

To negate this, Nifty futures has to cross the first hurdle at 8148-8150, which was a double top. There are some resistances above that too.

PCR at 8100 strike price is 0.9 as of now, and this will give further hints.

This has to rise way above 1.2 as soon as possible. This will happen when 8150 is crossed, and also when 8100 CE shorts are covered and at the same time, OI of 8100 PE rises (should go well above 50 lakhs).

If all of the above happens in the next couple of days, logical target for the 8100 CE is near 140!! (cmp 68)

So, keep an eye on the OIs of 8100 CE and PE tomorrow to get a hint regarding future price action.

Nifty at crucial level

2014-09-16T21:04:00.002+05:30

Something for the bulls:

Although Nifty declined sharply today, it is at a critical level on the charts as explained below:

Ever since this bull run started from 5930-40 in February 2014, Nifty has taken support around the 200 hourly moving averages thrice so far, and the low today was again near the 200 hourly moving averages (Simple and exponential).

If this region gives support once again, bulls have some hope to make another attempt to conquer the formidable 8150 - 8200 resistance.

The next 2 days will be very crucial (have I heard this before?).

Ideally, Nifty needs to open with a gap tomorrow and go straight up, since more time spent around these levels will be an invitation to more bears.

The 8100 CE hourly chart also shows how the panic low was bang on a previous low near 15 today.

One overnight hint will be available from the India ETF - INDY in the US markets. INDY gapped down today to 29.68 to fill a gap. If it closes above 30, it indicates that bulls have some fight left in them.

So, watch where INDY closes when you get up tomorrow.

INDY hourly chart :

Nifty reversal ?

2014-09-04T11:39:00.003+05:30

Nifty is overbought on hourly, daliy, weekly and monthly timeframes (stochastics above 95)

Nifty daily candle formed a DOJI yesterday (at the top), and is now trading below yesterday's low.

This can be a potential reversal.

How can this be traded now?

Buy 8000 PE on dips, with sl below recent low (42.5), for a possible T1 of 100.

If this PE crosses 120, 150 is also possible.

Happy trading !!

ITC trade (360 CE)

2014-09-04T10:58:00.002+05:30

ITC is holding up well in this fall, and can move up.

A low risk trade is to buy 360 ce on dip near 2.5, with SL below 2,

Targets 6 - 10-12

Happy trading !!

SBI trade (2400 PE)

2014-09-03T15:46:00.000+05:30

SBN 2400 PE, buy 20-22, SL 15.

Some people might be wondering why this trade was given.

Following is the trade setup :SBI cash and futures both made a doji on daily charts yesterday, and have given a low below the low yesterday. There is also a trendline shown in the chart acting as a resistance.

The PE chart gave a low risk setup, SL below recent low.

SBI futures daily chart:

SBI 2400 PE hourly chart :

Potential targets: T1 40-45; T2 60-65; T3 75-85, and maybe 95 too

Potential road-map for September

2014-08-31T09:37:00.001+05:30

I have a favourite pastime of studying charts over the weekend, and letting my imagination run wild.

After spending a few hours over various charts of, Nifty spot, Nifty futures, and various Options charts, following is the possible path for September that comes to my mind.

For a conservative or traditional trader, the stop loss is below 7850 (all levels are of Nifty spot).

However, Nifty might make a top somewhere on that trend line that is sloping upwards. For aggressive traders, it is worth buying some cheap Puts (say 7700 or lower), for a possible target of the lower trend line. If that happens, the Puts would be multi baggers.

Another possible hint of a top can be provided by the CE charts.

Hourly chart of 8000 CE given below:

Typically, the first week in a new settlement is bullish, and this CE chart can be used to trade Nifty in this first week.

Corresponding levels for other CE charts also can be used.

Happy trading !!

Irrespective of the Poll results, what do you think Nifty will do ?

2014-05-15T10:17:00.000+05:30

online poll by Opinion Stage

Abki baar Modi sarkaar or Abki baar Nifty Saat Hazaar..a poll

2014-05-10T08:30:00.001+05:30

online poll by Opinion Stage

This is what bears have done to the longs held by Bulls in last few days

2014-05-07T13:23:00.003+05:30

A potentially big trade - SAIL

2014-04-19T22:10:00.002+05:30

I had tweeted a few days back about a lot of PSUs looking good.

Here is one that has the potential to give an excellent trade if managed well in futures.

SAIL can be bought (an aggressive entry) at current levels, with a stop below 67-67.5, or for a conservative entry above 76.5 (problem is stop loss remains the same and is very far off).

SAIL has the potential to rise to above 90, maybe even 100+ over the next few weeks.

Based on the Options charts, SAIL 70 CE too can be bought on a dip with sl below 1, for a target of 6-7.

If one goes long in May futures and it starts rising, it can be hedged on a rise by selling the April 70 CE near 6-7, with a stop above 8.

SAIL April 70 CE :

For those not willing to risk a trade in futures, SAIL can be bought in cash with a stop below 67 for a target above 90.