MY TRADES

WEEKLY NIFTY UPDATE - 28-03-2015

NIFTY THIS WEEK
Nifty closed lower by 2.68% for the week at 8341.40.

TECHNICAL WATCH
The Nifty is trading well below its short term moving averages. The 20-day moving average (DMA) and the 40-DMA are at 8697 and 8647 respectively. The nearest support is at 8170(200 DMA) and 8110(200 DEMA).

FUND ACTION
For the week, the FII's were on the buyer's side as they bought securities worth Rs. 1126.71 crore. The DII's were net buyers as they brought securities worth Rs. 1230.61 crore.

SECTOR WATCH
Selling was seen across the board and noner of the sectors closed in green.

STOCK WATCH
Stocks which gained during the week were Hexaware Tech(7.98%), Century Textiles (10.87%) and Natco Pharma (8.32%).
Major laggards were Bhushan Steel (7.98%) and Idea Cellular (4.96%).

OUTLOOK FOR NEXT WEEK
For the coming week, Nifty is likely to trade in the  range of 8250 to 8500 levels. If 8250 is broken, the Nifty may fall to levels of 8170/8100 levels. On the upside, Nifty may face resistance around 8470.


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View as of 24-03-2015

The Nifty yesterday signs of recovery in the first half, but gains did not last as it sold off in the second half. It is evident that every rise is used by the traders to short the market. As such recovery is not happening. It is difficult for the markets to move higher, but the chances are high that the levels of 8400 may get tested soon. Such is the selling that barring a few stocks, most are showing signs of a trend reversal. As a trader it is best to have a wait and watch approach at this moment. Most stocks like Lupin, Kohinoor and Llloyd Electric are showing good strength and this may continue going forward.
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WEEKLY MARKETVIEW 22-03-2015

NIFTY THIS WEEK
Nifty closed lower by 0.89% for the week at 8571.
As a result of the sell-off, the Nifty closed below the 45 day SMA at 8751 and also below its 10 day SMA at 8684 levels. On a weekly basis, the index has also closed below its 13 week SMA for the second week in succession indicating the firm grip of the bears on the market.
CNX Realty, CNX FMCG, CNX Consumption, CNX MNC, CNX Auto, CMX Metal, Bank Nifty, CNX Energy & CNX Finance ended in the negative terrain. CNX Pharma and CNX IT held on to the gains by 1.08% and 0.42% respectively.
For the week, the FII's were on the buyer's side as they bought securities worth Rs. 828.85 crore. The DII's were net sellers as they sold securities worth Rs. 1133.77 crore. 
Stocks which gained during the week were Mc Dowell-N (3.62%), LICHSGFIN (2.81%), ZEEL (+2.63%), Wipro (+2.25%), Infosys, Divis Labs, Ranbaxy and Dr Reddy’s.
Reliance Capital, Jindal Steel, HDIL, Reliance Communications, JP Associates, GMR Infrastructure, NTPC, Unitech, Reliance Infra and Adani Power were major laggards for the week.


OUTLOOK FOR NEXT WEEK
For the week ahead the support for the Nifty is seen at 8550/8450.  The resistance is seen at 8680/8750. RSI is in oversold territory at 40.44561. Fast Stochastic and Slow Stochastic is in oversold territory at 7.40 and 11.54 indicating that Nifty is oversold and there is a pullback likely. 
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MARKET SOLD-OFF : STOCK TO WATCH FOR !!!

The market has sold off heavily in the last few sessions.  However, as an investor this is an opportunity. Here are some cool stock ideas to invest now.

1. Lloyd Electric And Engineering Ltd
This is purely a trading call. With the summer approaching the stocks of the companies which deal with ACs will see an upside. Lloyd is bound to benefit in such a case. If we look at the valuations then also the stock is a good pick. The stock has an EPS of 21.54 and valuations are cheap considering a P/E of 8.21.  Lloyd Electric can see targets of 200 soon if not more. In this market where most stocks are trading way below the 10 DMA, this is one stock which is trading above that. It just shows how much strength the stock is having at this moment. I was seeing the Advertisement on ‘Lloyd AC wale hamesha khus’. It reflects that the company is into the strong marketing mood and that may help in the company to gain more market share. 

2. Titan
When one talks of long term, Titan is a top pick. It has always given good returns. In the last decade Titan has revolutionized the jewelry and watch segment. It has brought class and style into the jewelry and watch segment. In fact Titan has been one of the very few world class brands that have been made in India.  Today it is India’s largest manufacturer of quartz watches and has a dominant 60% market share in the Indian market.  Titan has also emerged as the world’s sixth largest manufacturer of branded watches. It has also been successful in creating brands like Fastrack, Sonata, Nebula, Titan Raga and Octane. Titan has also acquired a license for the marketing and distribution of Tommy Hilfiger and Hugo Boss watches. It also got several accolades for its tremendous performance. It may be worth mentioning here that the Titan stock has been one of Rakesh Jhunjhunwala’s favorite stocks and as played a major role in making him the big bull.  It is very difficult to give a target for this stock as whenever I gave targets, the stock went beyond that. It’s always a buy!!!

3. United Phosphorus
UPL is the largest producer of Agrochemicals in India. It is also amongst the top five post-patent agrochemical manufacturers in the world. As India is an agro based economy United Phosphorus continues to have good prospects. It offers a wide range of products and has developed more than 100 insecticides, fungicides, herbicides, PGR and fumigants. UPL also manufactures plant growth and regulatory like Saaf, Doom, Samar, Jhatka, SaathiI, Renova and Ratol. It also has a strong global presence and has a customer base in over 100 countries. It has subsidiary offices in countries like Argentina, Brazil, China, Canada, France, Hong Kong, Japan, Korea, Mauritius, Mexico, New Zealand, Taiwan, South Africa, USA and UK. The UPL stock has shown good appreciation and remains a top pick.

4. TFCI:
Fundamentally, TFCI has always a good company. It primarily provides financial assistance to tourism-related projects. It has also started lending to other sectors such as real estate, infrastructure and paper recently. However, what makes it a buy now is the technical breakout of a long term trend. It has broken the long term range recently and after that rallied all the way to 95. At the current levels the stock is consolidating, but once it breaks out the previous high can be breached. It has lots of factors going in its favor like strong capitalization level, low gearing, comfortable liquidity profile and sustained profitability with an increase in Interest spreads. 

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100% CORRECT- AS USUAL - NIFTY FALLS FROM 8800 - WHAT NEXT?

In our last post we said that 8800 will be the crucial level. 8800 will be the make or break for Nifty. Today we saw Nifty crash as it approached that level.With this our prediction rate remains 100% correct for the 10th consecutive time.
What's next? With Nifty closing below 8720 Markets look really weak. Technically 8600 is a support but its looks it may not hold. 8400-8450 may be seen in the next few session.As a trader I would wait for Nifty to break 8600 before going short. If that happens I would go short and see what happens.
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NIFTY MOVE: OUTLOOK FOR 18-03-2015

Yesterday we said if Nifty crossed there we was a strong short covering awaiting for 100 points. Today it happened!!
Its 7th time in a row that the market have exactly moved the way we predicted. Its purely our technical analysis which has been spot.
As far has the next few session are concerned I will have a look at what does around 8780 to 8800. This is the zone where the Nifty will decide to breakout or breakdown.
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NIFTY CROSS 8700- AS WE SAID

For todays trading we said that Nifty will see a strong recovery above 8700. The prediction has been spot on once again. For Nifty to go higher it must cross 8720. After this 8800 is a possibility.
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RAKESH JHUNJHUNWALA'S LATEST BUYS

Here is a look at Rakesh Jhunjhunwala's latest picks:

1. Fortis HealthCare:
Jhunjhunwala bought 34, 85,075 shares of Fortis Healthcare through bulk deal on 11th Feb, 2015. The stock was purchased on an average price of Rs 119.35. The transaction was valued at Rs 41.6 crore
2. Delta Corp:
Rakesh Jhunjhunwala has increased in stake in Delta Corp, which owns casinos in Goa by adding 12.5 Lakh shares at Rs.91.75 on 2nd Feb, 2015. Prior to the deal Mr Jhunjhunwala already owned 3.47% in Delta Corp.
3. Man Infra:
Rakesh Jhunjhunwala has brought 30 lakh shares of Man infra Mansi Parag Shah, one of the promoters of Man Infra construction at Rs.36 on 30th January, 2015. Man Infra provides construction services for ports, roads besides undertaking residential, industrial, commercial projects.
4. Geojit BNP Paribas:
Rakesh Jhunjhunwala brought 12.5 lakh shares of Geojit BNP Paribas between 27th Jan to 4th February, with an investment of Rs.5.7 crore. Jhunjhunwala had earlier said that the Indian market is in a structural multi-year bull phase.  As such, Kochi-based stock broking company Geojit is generally expected to do very well. Jhunjhunwala had first invested in Geojit in 2004 and he has been on the board of the company since then.
5. Spice Jet:
Rakesh Jhunjhunwala picked up 1.4% stake in Spice Jet at Rs.17.88 on 28th November, 2015.
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CHARTS

Charts are often considered as the backbone of technical analysis. Charts reveal a lot of information in a small time. They give information about the movement in the prices of the company’s shares over a span of time.

Charts also give signals that a trader can analyze to predict the movement in share prices in the future.
There are two types of patterns: reversal and continuation. A reversal pattern signals that a prior trend will reverse on completion of the pattern. Conversely, a continuation pattern indicates that the prior trend will continue onward upon the pattern's completion. By analyzing charts a trader can get essential information regarding which pattern a stock price is going to follow.

However, charts are not a formula that can predict the movement in share prices in the future an exact science. It is not a necessity that the prices move exactly in pattern suggested by the chart. To confirms charts other aspects of technical analysis should be considered like volume and RSI.

Types of Charts
Line charts: This is one of the most popular types of charts that are used for analyzing stock prices. Line charts can be read and understood very easily. In this kind of charts the stock’s closing prices over a specified time frame are connected. In the case of daily charts the closing price for each day are plotted and connected by a single line. For weekly charts the closing price for each week is used for plotting while in case of monthly charts the closing for every month is used for plotting. The line chart has certain limitations as it does not provide too much of technical indications that can be used for predicting future price movement. Except for the closing price there is not much of information that can be read.

Bar Charts: These charts contain vertical bars that represent a particular period of time. The length of the bar indicates the variation of the price in that period with the top part showing the highest price and the bottom part showing the lowest price. There are two small horizontal lines projecting from the bar lines. The line on the left indicates the opening price while the small line on the right indicates the closing price of the period. These charts are also known as the OHLC charts as information regarding the open (O), high (H), low (L) and close (C) can be read from them. The bars in the charts can also be colored red or green. It the bar of a period sees price appreciation than its previous bar it is colored green and if the bar has seen price depreciation than its previous bar it is colored red. The bar conveys a lot of information and is an essential tool for technical analysis.

Candlestick charts:  These charts originated as a form of Japanese charts. There are very much similar to bar charts. The solid bar on is the price difference between the opening and closing prices. The lines on which these bars lie show the difference between the highest and lowest prices. A candlestick generally reflects the price pattern for a specific time period which it describes. When it the closing price for a period is lower than the previous the color of the candlestick bodies is black or red while in case the closing price is lower than the previous period the color of the candlestick is white or green. The accumulation of number candlesticks gives rise to patterns which are used to describe certain movements in the stock market. A stock which opened near its low and closed near its high, is denoted by a green body with short shadows while a stock, which opened near its high and closed near its low, is denoted by a red body with short shadows. The candlestick charts are one of the best charts that can be used for technical analysis. This chart shows various patterns which can be very useful to predict the stock price patterns in future.

Importance of charts
Charts when analyzed properly can use to predict the future movements of the stock prices by studying the patterns which they indicate. They can be used to decent analysis of stock prices and anticipation of the future price trends can be done. The importance of charts also lies in the fact that they give an overall view of the stock prices and helps the investor to get some information regarding the stock before investing in it.


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STOCK SPLITS AND BUYBACK OF SHARES

A stock buyback is buying back of a company’s shares by its own promoters. Stock buyback has several advantages for the investors.
1. Stock buybacks generally take place at a price higher than the market price. This takes the stock prices higher.
2. Buyback mean the promoter are increasing their stake in the company. This sends a strong signal that the company’s management believes the company has good prospects and the market has undervalued its stocks.
3. Buy backs set a floor price of the scrip as the company makes sure the stock is brought when it reaches a certain level as the company buys back the shares at that the price.

A stock split is a corporate action that increases in the number of outstanding shares by dividing each share in such a way that the proportionate equity of each shareholder remains the same but diminishes the price of each share.
Let us say a firm has a capital of Rs 100 crore, with 10 crore shares each of which have a face value of Rs 10. Let us say the firm has opted for a 2-1 stock split.  The face value of each share will be Rs 5, and it would issue 2 shares, against 1 share held by each shareholder. The firm will now have 20 crore shares, with a face value of Rs 5, and its market capitalization would be the same at Rs 10 crore.
A stock split can be done only with the approval from the board of directors and shareholders. Once the approval is obtained the company can call for a book closure. Post book closure the stock split happens.

Advantages of a stock split
1. One reason as to why stock splits are done is that a company’s share price has moved so high that it is difficult or expensive for small traders to invest in these stocks.
2. Due to lower prices, there will be more investors willing to buy and therefore the companies build up more liquidity by splitting their stocks.
3. A stock split is often seen as a positive indicator that a company is growing. One side says a stock split is a good buying indicator, signaling that the company's share price is increasing and therefore doing very well. 
4. Current shareholders enjoy the pleasure of doubling or tripling the number of shares they own.
5. Companies that split their stocks have typically enjoyed a big jump in share prices.

What is a reverse stock split?
A reverse stock split, or reverse split, is the opposite of a stock split, i.e. a stock, merge - a reduction in the number of shares and an accompanying increase in the share price.
There are many institutional investors and mutual funds, who have rules that forbid them from purchasing stocks which quote below Rs 10, as they feel the stock may be manipulated or belongs to the penny category. Every professional company management likes to have a broad-based shareholding.
Hence, to attract such investors, a company could go for a reverse stock split, where the ratio is reversed namely 1-for-2, 1-for-5 and so on. However, some firms also use a reverse stock split as a tactic to reduce the number of shareholders or avoid getting delisted.

Conclusion
A stock split has no major effect on the market capitalization of the company. It does not reflect any change in the fundamental outlook of the company. The advantage is purely psychological.  A stock split brings the share price down to a more attractive level and for investors may who felt the price is too high for them to buy find it is not affordable. The lower stock price may affect the way the stock is perceived and therefore entice new investors. A stock split should not be the deciding factor that entices into buying a stock. While there are some psychological reasons why companies will split their stock, the split doesn't change any of the business fundamentals. 

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