Monday, August 3, 2015

BSE Sensex - Sideways Susie !

BSE Sensex: The above chart clearly shows the Sensex has drifted into a sideways pattern after the initial advance from the breakout zone. Immediate resistance is present at the 28500 levels while the support zone marked earlier has held out at the 27400-27500 levels. Sooner or later a move out of this sideways pattern will occur. Watch and trade accordingly!

Tuesday, July 28, 2015

Flied Lice anyone ?!!

Check out the charts via the link below.

Chinese Markets Chart Snapshots

Take the world’s largest populated country, open a stock exchange, ensure that a majority of the companies are owned by the state, add to the excitement by making sure that only a 1/3rd of the total listed shares are free float (means public can buy/sell freely). Now add fuel to the fire with the abundant financing options for stock market transactions – margin financing. Oh, and I almost forgot a majority of the folks who dabble in Chinese markets are below the age of 35 – meaning still learning! Ouch!
So you have a LOT of young/inexperienced people chasing very FEW stocks with a LOT of cheap money!!  
As long as the market is up all is well, but the moment markets head south it turns into a bloody stampede. As is evident from the recent events unfolding in the Chinese stock markets. 

Knee f***ing hao folks! Welcome to the party and please bring some “flied lice”!! mwahahah….

Monday, July 27, 2015

Global Booze Stats !

Take a look at the above chart. It looks like there is a big chunk of market yet to be tapped in India & China. So now you know, which stock to buy on the next major correction?!

Market Updates...

Its time to eat humble pie?! not clear yet. But looks like a sharper pullback within the bullish trend than earlier imagined. 

BSE Sensex: With the derivatives settlement approaching in a couple of days, there is a strong chance that this fall might be bought into and overall the markets turn sideways. Supports exist at 27600 odd levels.

Shanghai: After the crash down to 3500 levels last month(where there is ample support) the index did bounce back and is now retesting supports to confirm that the crash is indeed over. Situation is still unfolding though hence a little bit of wait and watch to confirm the trend is in order.

Dax: A case of a stronger than anticipated pullback within the bullish uptrend. Has a couple of decent gap-up support levels approaching at 11000-11150 levels which could prove to be the trend decider.

Dow Jones: Is back down to its 200-DMA with 4-5 days of straight decline. Could be oversold on the short-time frame charts. Cluster of tops around 18100-18300 range needs to expand though for some comfort on the medium term time frame. 

Will keep updating as the situation unfolds. Traders would do well to absorb their stop losses and look for opportunities to re-enter.

Sunday, July 26, 2015

Au Revoir - performance appraisals as we knew it !

The above is the link to a 1 minute video on the Washington Post, in which the CEO of Accenture speaks about how his firm is doing away with the traditional performance appraisal process.

Sounds intriguing for sure. I found out that Deloitte has also gone ahead and junked its performance appraisal process and settled for a simpler "4-questions format" to judge its employees. Here are the 4 questions that Deloitte thinks are pertinent for this process;

1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus. 

2. Given what I know of this person’s performance, I would always want him or her on my team.

3. This person is at risk for low performance.

4. This person is ready for promotion today.


The conspiracy theorists would say, "these guys are brilliant, they just cooked up another way to earn money because now they will have to help thousands of companies worldwide on how to adminster and manage the new performance appraisal process"!! hehehehe.

Or it could be simply them trying to avoid thousands of hours lost in the performance appraisal process not to mention the unproductive unbillable hours (or do they bill them still to some hapless client?!) heheheh..

Too early to say but i like the 4-question format of Deloitte. Keep an eye out for this to hit a company near you soon! cheers....

Saturday, July 25, 2015

Jio aur Jeene Do !!

The above chart of Reliance Industries clearly shows the stellar runup from the sub-800 levels recorded in April 2015. It was a screaming buy at that point and has more than justified its presence in a model portfolio.
Having gained over 25% in a space of only 4 months and with its quarterly numbers also out, what’s in store for the stock? Here are my observations on that;
1)      Given the sharp nature of the rally, it’s quite obvious that short-term and derivatives traders should unwind their long positions or atleast hedge fully with ATM put options.
2)      Technically speaking, the stock has arrived at a point where it should find reasonable resistance to its immediate upmoves. The next week could see some sort of a sideways to a mildly downward reaction, if that happens, the low of the week should be used as a stop loss for long positions. On the upside, further rallies can be had only upon convincing crossover of the 1050-1060 levels with greater volumes.
3)       An intermediate term target of Rs.1350-1400 range appears achievable by March 2016.

Friday, July 24, 2015

Hey, let's start a hedge fund !!

The above picture is of one of the coolest chaps from the hedge fund industry in the US - George Zweig, who worked with the much admired hedge fund "Renaissance Technologies LLC". After he left Renaissance about 5 years ago, he is now at the age of 78 starting off a hedge fund by the name of "Signition" ( Signal and Recognition are the words mashed in there!) with a couple of other partners who are about half his age!
The following lines from his interview to WSJ caught my attention,
1)  " I've still got it" and 2) "life can be very boring without work"

lol... So true. For those who have never invested (let alone dabble in hedge funds) in the financial markets, starting a hedge fund at age 78 is a task that no sane man would like to attempt, especially after having set a good track record in the years before - check this out,

" Launching a new hedge fund is the latest of multiple reinventions for Mr. Zweig, born in Moscow to Jewish parents who emigrated to the U.S. shortly before World War II. He grew up in Detroit and earned a Ph.D. in theoretical physics from the California Institute of Technology.
Work he and another scientist conducted independently of each other suggested that protons and neutrons are made up of smaller particles known as “quarks.” The 1964 finding was initially dismissed by other scientists. but quarks have since come to be known as a fundamental building block of matter.
Mr. Zweig later migrated to government and academic projects that involved the search for signals amid noise.
He was one of a handful of academics to propose a system designed to stop the flow of troops and materials from North to South Vietnam by creating an electronic barrier consisting of sensors and mines. He eventually left the project amid his opposition to the war.
While teaching at CalTech he helped invent the algorithm that underpins cochlear hearing implants, electronic devices that can provide a sense of sound to the deaf. He also founded a company that leased software to the National Security Agency.  "

hmmmm.. So what on earth is Ol' Georgie trying to do? (My disclosure i am listening to the "Ghani Bawri" track from tanu weds manu returns while typing this out! check that out too...)

Tuesday, July 21, 2015

Sun Pharma - Por Favor Senor !

My comments on above chart of Sun Pharma:

1) The stock was in decline mode ever since Daiichi exit in April 2015 from its all-time highs of around the Rs.1200 mark.

2) There is a breakaway down gap at the 1028-971 region which clearly indicated the end of the bullish moves in the stock (Please note its been on a major bull run since the 2009 bottom of around Rs. 100 mark).  This gap down region has proved to be a major resistance on subsequent attempt at upmoves.

3) There was a 2nd gap down at the 916 - 960 range during end of May,which has been covered up in the subsequent upmove in July. However the 3rd gap down (recorded today and not reflected in chart because this post is coming during market hours) in the region of 948 - 852 on 21/July/2015 on the back of company issued profit warning seems to indicate that the stock is in the final stages of its decline.
4) Long-term investors would do well to commence systematic instalment purchases with an outside downward target of Rs. 700-730 in mind. Whether the stock falls down to that level is the X factor but the fact remains that this company is going to come back strongly after ;
a) The costs (not just financial costs) of merging with Ranbaxy are digested.
b) The entire post-merger product portfolio is aligned to long-term goals of company.
c) The production facility/facilities under USFDA watch/warning are back online post payment of remediation charges, etc...

As always several/all Analysts/Pharma research jocks are now "downgrading" the stock - great job guys - bolting the door after the horse ......
For those recommending a wait and watch now, and mentioning possible cut of further 10% - my question- how do you time the purchase of a stock that opens 10% down on opening bell? not that its a habit for the stock - rather it has always been a steady mover - but recent history suggests volatile movements at opening bell - conspiracy theorists would note its presence in the derivatives segment!

Enuff said senor!

Monday, July 20, 2015

BSE Sensex - High Tide Continues

BSE Sensex: From my last update;

From the above chart it is clear that;

1) A small island reversal has taken place with positive implications.
2) As mentioned last about 800 point move was in the offing in the direction of the breakout.
3) So we are looking at potential short-term targets of 29100 thereabouts. Buy on intra-day declines with stop loss of 27980 for above mentioned target zone.
4) Better to exit before the weekend closing on Friday- 24/7/2015.

DAX - Achtung Baby !!

Following up on my earlier post on DAX;

As can be seen from the latest chart position,
1) The DAX has retraced its last downswing in a quicker time.
2) It has also broken out of the downward sloping channel marking atleast the end of the corrective phase.
3) Gap up support zone extends from about 11330 to 11430 approximately. Any minor retracement/volatility should find support coming in at the above mentioned levels.
4) Traders should be long with above levels as stop loss with potential targets of 12,100 in coming days.

Monday, July 13, 2015

Grexit - In a lighter vein !

What would a Greece exit mean - in  a lighter vein ofcourse!

as reported in the WSJ,

a) 31.2 % lesser coastline !!

b) 24.5 % lesser Olive oil production.

mwahahaha.... seriously these guys work really hard to compile all the facts!

DAX - Schnell !!

The above chart snapshot of the german stock index shows it has been in a steady downward drift well enclosed in a downward sloping channel since April 2015. Looking closer you will see that each down leg within the channel consumes about 8-11 days whereas the upswing to the top of the channel consumes longer. Further each upswing ends with a exhaustion gap-up action marked by blue arrows.

The last downswing too has consumed about 8 days and now we are in the upswing phase with 2-3 days having passed by (coinciding with the possibility of final greek bailout settlement).
Watch if the index is able to retrace in faster time its last downswing - meaning we have about 3-4 days to take out the 5100 approx. levels to confirm a turnaround in the trend.

This chart should also help understand that while the index started falling from April 2015, its only a month or so now that the Greek problem is being shredded on the media all over the world. Would you be more likely to believe the early discounting theory of the markets now?

China - the fortune cookie crumbles ?

Almost everyone has been talking about the recent crash in the chinese stock market. Given above is the chart snapshot of the Shanghai Composite. It clearly shows the index running up from around the sub-2000 levels(March 2014) to around the 5200 levels (June 2015). Note however that despite this sharp runup the index has not yet surpassed its 2007 peak of 6000 odd levels.
The chart shows the 200-DMA, the previous intermediate top and the fibonacci retracement level all intersecting at about the 3500 odd levels. This is the point from which the index has taken support and bounced back with vigor. Its early yet but if the worst of the pounding is over and if the mom-and-pops are out of the trade then the large institutional investors would definitely build long positions at/around current levels.

meanwhile here are interesting quotes from fund managers on the issue:

1) " “I wouldn’t call it a stock-market bubble, but it was a very quick boom and bust,” said Bill Kennedy, manager of the $11.2 billion Fidelity International Discovery Fund, which mostly invests in stocks outside of the U.S. About 1.8% of the fund was in Chinese companies as of the end of May. “I still have a list of stocks that I like and as they hit target prices I will buy them,” he said. "

2) " “Without a doubt, there are today some pretty wonderful opportunities to own specific companies that are trading significantly cheaper than they have historically and are trading at a discount to their fundamentals,” said Safa Muhtaseb, portfolio manager of ClearBridge Investment’s Global Value team. Still, given the potential for more volatility, he said he’s “not going to back up the truck and build new positions,” but he is interested in adding to existing holdings. "

and this one is my favorite...
3) " “We’re neutral on Chinese equities, which is a result of realizing equities are attractively valued but very volatile,” said Mr. Mariscal of UBS.   " ----- Duh !!!

All of the above meaning - we are looking to buy! So hold onto that cookie!!

BSE Sensex chart - 13th July 2015

The above chart snapshot clearly shows the BSE-Sensex  after its recent breakout from the intermediate channeled downtrend (From January 2015 to mid-June 2015). The upside breakout was on the back of 2 back-to-back upside gap up actions with the last one being around the 27200 level.
This has been tested in the subsequent drawdown action and was defended successfully by the bulls with that day recording a long shadow pattern on the candlesticks chart.
That said, the future moves depend on the immediate upside resistance at the 28084-28200 levels and the recent gap-up support zone at the  27200 levels. So thats about a 800 point range on the index. A breakout on either direction would imply a move of atleast that magnitude (800 points).
At this juncture i would wait for clarity before trading the index.