LET THE MARKET TELL WHO WE ARE

In social media groups sometimes, I see people posting stock charts like I have posted above and then start discussing whether operators are active in this stock or there is some kind of manipulation and all that. However, I am not denying possibilities of manipulation but in a market, which has high level of regulatory framework is not that easy to manipulate.   But there is also investing/trading common sense that cause this type of movements in market. There is an investment theory called 'Efficient market hypothesis'. This theory states that it is not possible to outperform the market whether you have access to technical analysis, financial information or any other insider information.  In technical analysis we always use a statement called 'Price discounts everything' means Every information that could influence the price is already incorporated in to price.  So now the question is, is it possible to make money in market using technical or fundamen...

CIPLA Ltd.    Last closed   449.2 ROE                                  9.62% ROCE                               10.94% DEBT/EQUITY                  0.23 EPS                                  20.69 EV/EBITDA                       9.97 P/E        ...

Nifty index settled at 7801.05 yesterday. Index reversed sharply after hitting a low of 7511.10 and formed an indecisive candle which managed to hold Monday’s low on closing basis. Price action witnessed on Tuesday showing indecision along with increased volatility. Increased volatility along with indecisive candle which is protecting previous low closing basis suggests tough war between bulls and bears and closing above previous close suggests bulls are wining against bears. In today’s session 7740 will remain crucial support for Nifty spot. Failure of this level might attract fresh selling for the day and then attempt towards 7650-7550 could be imminent. Key support will be at 7500 and stability below this level will open the doors for attempt towards 7350-7200 and more down side. Stability above 7740 will keep chances for a recovery and any cross and stability above 8000 will result in a rally towards 8400-8700. This index might try filling of gap left at 8744 on Monday. Overall ...

Trading community believes that bullions like gold and silver are safe heaven investments. If there is a fall in financial securities like stocks and bonds bullion attracts safe heaven demand means money moves out of equity and gets into commodities like gold and silver. This is the common logic that entire trading community uses, but market psychology tells a different story.  In trading psychology we believe assets might be different but traders are not. Thus, when a serious fall starts it doesn't matter if you are in equity or commodity like gold, silver, crude. They all will fall. Perhaps severity of fall might be different but direction will be the same.  Most traders usually have positions in more than one financial assets. When one falls they have to sell some other assets to pay the additional margins and this creates a viral infection that moves from assets to assets or from equity to commodity. In such times, demand supply and other fundamental considration...

#SBICARDS #IPO has opened today and will close on March 4, 2020. Its an #book_building issue having a price band of 750-755. A strong hype is created for this issue and reminding me of #RPOWER which was offered in 2008 and #investors never got its offer price back in secondary market after listing day. Recently we had very successful IPO of #IRCTC at time of listing this #company was offered at 320 rupees which was 18.77 times of its annual earnings. IRCTC is a company which operates in an #industry which have no competition and have sustainable competitive moats till date. However, #SBI cards is having 18-20% market share in credit card industry and there are lots of other players offering same product. However, big market share for this company will play favorable  role for this company but there will always be a threat from competition. This company is having very strong competitors like #ICICI and #HDFC. SBI is showing annual earnings per share arou...

Nifty has settled at 11132.75 witnessed a sharp recovery after hitting a low of 11036.25. This index has been consistently holding above 24 times of its Price to Earnings Ratio since May 2017 and it is now fluctuating between 30 and 24. According to Friday’s closing NIFTY closed at 11201.75 and PE stood at 25.49 which translate earnings for entire index somewhere around 439.45. If this time also nifty replicates past behavior and reverses from 24.30 times of it’s earning then areas of 10700-10500 can be potential support. Areas discussed above are also important based on technical analysis. Market formed a bottom 10637 just before the announcement of corporate tax rate cut and then market rallied. This time again we can see this index finding support somewhere around 11000 zones, but if this level is taken out then 10700-10500 will be imminent. How market responds near 10700-10500 will decide destiny for the market. Recovery from those levels is likely where as stability below 105...

On Friday NIFTY index settled at 12271.80 up by 1.53 percent on weekly basis. On weekly chart recently price has settled well above resistance line of a parallel channel with a partial gap suggesting that bulls are having upper hand. Price has been witnessing nice up trend and currently nifty is moving in CD leg of a bearish AB=CD pattern which gets completed at 12735.65. 14 period weekly RSI has recently placed a higher value than price made last top at 12103.05 in June this year. Higher value on RSI along with price making new high neglecting possibility of a bearish divergence on weekly basis. Weekly MACD has been staying in bullish territory along with a bullish cross above its signal line favoring bullish momentum and suggesting that there is more juice left in current move and showing potential for completion of AB=CD pattern based on weekly chart. However daily chart is showing lack of conviction and formed an identical shooting star on Friday. There is a tiny contr...