The First Two - PANACEA and IFCI

As promised in previous post, I am looking at 2 stocks here...Not yet advocating a buy...except MAYBE in small amounts...I am in wait and watch mode for now...As I said for next couple of weeks.


First one Panacea Biotech...I have covered this stock once before over here...I think this looks good because even with the general weakness in the market over past few days, this looks relatively strong..Volume also picking up showing strong hands might be picking the stock. Fundamentally also I believe this is a good stock but I am hoping others can comment on this.

The other thing here is the falling channel-long term, that looks like it can be broken to the upside soon...This is a good stock to buy and hold for long term in the next correction...


Next one...IFCI...Now this stock is no stranger to anyone...Why it looks interesting to me even though its a highly speculative stock is because of how it has held up the 60 price range even over past few days. And volumes are huge...Is someone big accumulating in anticipation of some inside news? Looks possible to me...Also an Inverse HnS looks to be setting up even though its not very clear here...

So thats my first 2 picks...I will look at some more over next few days...As I said before, now might be a good time to pick some good scrips for longer term...Big money is made by buying and holding over longer periods of time...Not trading intraday. You can see how panacea went from 40 rs or so up to 360 odd now...Thats the power of long term. Judge for yourself from the charts.

Now one thing I need some help from readers of this post is do you know anything about the fundamentals or news about these 2 companies? If you do, please add this into the comments section of this post...I would appreciate it...

Best.

Market Update - June06 2008

Make it stoppppp....PLEEASEEE!!!! This would have been the reaction over the past few days for most traders and investors alike... :-)

Jokes aside...It was quite serious - this decline...And there was really no sign of relief...Yesterday market bounced back however I do not think we are out of the woods...I think a lot of traders seeing yesterdays action, might have gone long thinking its over...But I am not so sure...To tell the truth I am confused however I will give the benefit of the doubt to the bearish case until I see more convincing evidence.

Okay coming to the weekly chart first...I have added my comments in the chart. You can see how the stochastics is acting now...I would wait for it to first turn up before jumping in again
with my longer term investments.


Next the daily...Now the bounceback should continue for a few days I think...The lows of March and Jan are quite important...The 4440-4460 area. If this breaks, we should quickly crash to 4000 area. And maybe even more. But before jumping to any conclusions, I remain flat for next 1-2 weeks before making a decision on next steps.

Next the hourly chart. Again its clear...Supports are marked...Break this and we crash. Its simple. I am sure that a lot of traders have gone long or covered shorts in anticipation of this holding? But will it hold?...The Million dollar question!

If I were to guess, I would say bounceback and then come back to break the lows...We can surely expect a retest and how it reacts there will determine the market's trend for this year itself!

For a refresh, read this post again...I posted this some time back...Ultimate bottom can be much lower: http://theindianmarketblog.blogspot.com/2008/05/elliot-wave-counts-and-ideas.html

Okay now that the charts are covered. I just wanted to say some stuff...For some time I have been trying different strategies in FNO and eventually come to the conclusion that it is not worth for me to continue in the same. Believe me, I have made money...good money in normal cash trading in stocks...Or stock picking...But FNO is a different story...Simply not worth for me..Time or effort...So I am returning back to stock picking for a slightly longer timeframe...Means 2-6 months timeframe...Maybe more depending on the market conditions.

I think the main problem that I have with FNO is more phsychological that anything else. Leverage just does not work for me...The main reason ppl get into FNO is to make a quick buck and often end up loosing their shirt in the process...For me since I was hedged most of the time, I did not get off too bad...But still overall I can safely say its not worth the time for me anyone...So moving back to stock picking...And I think we are getting close to a very good buy point....I would wait for 2 more weeks before making a decision...

Fundamentally things are not good...If inflation is 8%(actual much more) and GDP is 8%, this means, real growth is negative...BUT still I think picking out some good stocks will really work out in the longer run.

As a start, I will post 2 interesting stocks in the next post.

Best.

Market Update - June4th 2008

Same chart that I posted yesterday now with updated data...You can see how we hit the exact support I had marked as important and bounced up from there...I tried a small long there and still holding...Looks like we will continue the bounce today for sometime but how long will it continue? Will it hold? Lets see...My thoughts would be that atleast a retest of the lows are coming very soon...Looking to close the longs sometime today maybe at 4760/4780 and wait and watch...I might try a short also today around there based on what I see....

Overall market is very far from strong..Right now the configuration has changed to short the bounces....Market needs to go above 4800 first to indicate some strength...Till then we have to give the benefit of the doubt to the bearish case. Today for the bulls, a positive close is very important. Yesterday we formed what could be a bullish hammer - But needs a good closing today to be valid...Else it was just weak shorts covering.

Have a good trading day.

Best.

Some stuff and lines

Just the intra chart of nifty with some lines and supports I think might be important in coming days...Not giving any recos here but can try maybe going long with tight stops at these line...Be cautious whichever way...This is a confusing market.

Best.

Ouch!

Stopped out at 4800 - The number that I was saying is very very important in short term...Well we just sliced thru it so easily that one wonders what is the point of supports?....Its scary to be long now...I think better to sit out for some time...When in doubt stay out - This is probably the best advice any trader ever got but still we always want to be in the market.

Looks like we are heading to 4600 first stop...Then who knows?

Best.

Market Update - June01 2008

Not much of an update today...Still expecting a bounce..Configuration on charts remains the same...Not uploading charts today coz theres not much change from last week..We are at the lower end of the channel...Still expecting a bounce...One thing here I will say...Many ppl I know are expecting a bounce to 5000 area....Rarely does the market satisfy everyone...I see a couple of possibilities...

1. Market does not get to 5040 area at all...Instead stalls at around 4960-4980 area and goes back down.

2. Market goes above 5040 and screws all the bears...

Kinda favouring 1st scenario for now...We might even get to 5040 which was my initial target..lets see...

I am also preparing my shopping list for longer term stock picks...Will post thoughts about this later...My idea is to pick them on the next decline which should come soon...

Have a good trading day.

Best.

ABC Correction

Lets take a look at the hourly charts over here....Its pretty much defined with the trendlines, a possible wedge setup...Or maybe just a channel which also says we have to bounce UP from here. IF this is a normal correction, we have completed A, B and C got over yesterday suggesting we bounce today to the upper level of the range which comes to around 5040 which was the target I was looking for when I took my longs....Still seems reasonable to expect this short term. Medium term 5050 is important - Needs to trade above to confirm correction is over.

Else we will see lower levels from somewhere down from the 5000/5040 area.

Trade safe. I will post updates to positions if any during the course of today.

Best.

Market Update - May29th 2008

Hello Friends,
I am back from vacation playing on all the slot machines in Las Vegas....Had a fun time...Was tough for me to even trade let alone post updates here...But will try to post more regularly from now on...Daily chart below.

Earlier I posted I was looking for a bounce...We got the bounce but it was a weak one that was quickly sold...What is worrying to me now is the huge figures FIIs are selling off nowadays...Not sure what is going on but situation looks quite dicey. I think we might be setting up for a big drop but this drop might not go below earlier lows of 4400 area. However we will see that when we get there...

Right now I am still long...I am looking to exit this on any bounce I get...I am not sure what yesterdays action was...It was quite scary to say the least....I am wondering if this was the usual expiry shenanigans or something more serious? No easy answer but next couple of trading sessions should tell us.

4800 is of utmost important. Break this, and a mini-crash is even possible.

Trade Safe. If you are not sure, stay out.

4920 on upside is strong resistance. Above this, 4950 area.

If we sustain above 5050 for sometime, I will say that correction is over as the falling channel would have broken to the upside....If not, lows await us.

I am looking to close longs soon and get flat...Or build some shorts...However I am not confident of this market so best thing might be to just stay out for some time.

I apologize if I sound bearish but situation is not clear at this point. I will wait for 2 more days before sounding more confident in either direction...I have indicators showing conflicting viewpoints..Better stay out when not sure.

Bottomline is that 4800 area should hold for the bullish case to remain alive - Short Term.

Best.

Quick Update - May 27th

Hello Friends,
Quick Update...Dont have time to post charts but I think we are setting up for a small bounce upward...Atleast a small bounce...We will reevaluate later....For now I think 5040-5100 area we will get sometime next week...Rolling over longs to June and adding some more to the very small position I had before..Please note market still very weak but ALSO very oversold...To expect a bounce is reasonable...But this is a risky play...I am hedged with puts.

4800 area should hold - Very Important!

CURRENT POSN: LONG NF 4831. (My avg price for June - I have a loss of around 40 pts for May..Just for the record)

Best.

Market Outlook

Folks, I am on vacation this week...In Los Angeles some theme parks and after that Las Vegas...So posts might not be that much...My initial idea was to close everything before I left but still held some and well that was probably not a good thing...Oh well...Anyways heres my thoughts for this coming week.

One thing to note here is that Monday is a hol over here in the US...This could be important.

Now see the chart..the decline came on low volumes...I find this quite interesting. Why did this happen?...Is it setting up for a short covering rally after the public is sufficiently beared up?

One very interesting thing I see now is that the 'experts' are all beared up and are expecting retest of Jan lows.

Now I am not an expert and I am not going to try and predict Mondays moves. If you are not in a trade, it might be a good idea to stay out on Monday. I have some small longs..And the plan is to hold this if 4900 holds...Break this and I will be out. See if it consistently trades below 4900 for 10 mins...

4920 and 4900 and important levels. I do not know more than this now...I will try to post updates when I can...If I were to guess, I'd said we do a small bounceback from here or a bit lower...And then maybe setup a long and painful decline. Overall situation is not good.

Best.

Stopped Out

Got stopped out 1/3 at 5020 and rest 1/3 at 5000. Trying a small long here also....4943.

Best.

Update

Closing 1/3 of my position in profits...small profits...Just practicing good risk management.
Get out of longs if 5020 and 5000 breaks.

Best.

Market Outlook - 23rd May 2008

Pretty decent day for me yesterday...If only I had got a better entry the day before, tomorrow would have been a great day for me...but well, you cant win em all....

Coming to today...See chart and comments on chart.

Looking only at daily today. See how we stopped exactly at the t-line. Shows how important this is...What this means is that when this eventually breaks, it will be a sight to behold.

The reason I covered shorts and went long was only because of this t-line.

Today, well I am expecting a decent bounce...Maybe we get to 5100...max 5150...Before that we have to handle 5050 and 5080...Lets see how high we go...

Its always good to have a trading plan...My plan is to -

- Cover at either 5050 or 5080...Best case 5100. If I cover I will try some shorts..Will update.

- Hold till Monday and cover and go short then.

Let us see...Have a good trading day all.

Best.

Covering Shorts N Flipping Long in Small Amounts

Covering shorts and trying long here...Might be early but lookin for a bounce...Let us see..

Best.

Update - May 22nd 2008

No charts today..Just a quick update...looks like we go down to 5050 and if that fails 5000. I will look to cover shorts at one of these levels and go long..call me crazy but I will give it a try...I am expecting a bounce before more decline. The crazy public is buying all the dips so no problem...
:-D These guys are nuts.

A very sincere note here - dont fall with the fray..fundamentals are not bullish. I have said this before and will say this again - there is a time to bullish and there is a time to be bearish. I see that general complacency among the public is rising. This is a warning factor in itself.

Best.

Bad Timing

Well what can I say..Covered shorts at the best possible point...Support lvl of 5050 held like I thought it would and I waited for a rise to short into again...Waited for some time...lost patience...and shorted again...Bad level to short....I wish I was able to stay for whole trading days...because I have to go to sleep, this is killing me...Oh well...It is what it is...
Luckily I have the hedge.

What next? It is possible we saw a 'sucker' rally yesterday...The market makers are playing this game well...One thing to note here is FIIs sold 700 crore yesterday which is a big amount compared to their recent activity. I find it interesting that the market rose even when they sold this much...Be cautious if you are long....Atleast for some more time..

As I said before, it looks to me like the public is being trained to buy the dips.

5120 looks key here. Price action bullish above and bearish below. Above this 5150 is strong resistance.

5050 and 5000 are very strong supports. If we break this, we will get a waterfall decline.
Let us see.

Best.

Trying short again

Admit I didnt gain much from covering and reentering but better to be safe than sorry. Market is quite weak...Trying a short right here.

EDIT: Can cover if it goes above 5100. I am holding overnight. Good night!
Please note I am hedged with calls.

Best.

Covered Shorts

Quick update that I covered shorts at 5060...I am looking for opportunities either long or short here..

Best.

Market Outlook - May 21st 2008

Nifty intraday chart attached. I have added comments on the chart. Open in new window to read this. My view is that the public is trained to buy the dips. Beware against this tendency. There is a time to buy and there is a time to sell...Be careful if you are a shorter term player.

Position Update - As you know from earlier updates, I am short and will look to cover today and maybe short later at higher levels wherever we bounce back to.

Today important lvls to watch on downside is 5100 and 5070/5050. On upside again 5100, 5120 and 5140/5150 is important. I am looking to cover shorts at 5050 area or max 5000. 5000 is very strong support.

Best.

2000 Hits in 10 Days!

Well thats right..2000 Hits in just 10days...Nice for a start...Keep em coming...
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Best.