Monday, June 27, 2011

US stock market watchlist

Here is a list of some high probability setups for today.

KLIC - Like the way the gap support has held up. Nice volume and price action on Friday.

BAS - Love the rounded bottom. 29 is the key.

PRIM - Watch out for break of 12.75.

Take care and good luck!

Sunday, June 26, 2011

Shriram Transport Finance NCD 2011 review

Find a review of the Shriram Transport Finance NCD 2011 which offers 11.6% annual yield and opens for subscription tomorrow here

Of course, I am talking about the Indian markets!! Also, for the knowledge of all you American readers, the credit card interest rates here are 3.5 - 4% ;-).

Also, here is the link for the Indian stock market watchlist for next week 

Lots of good setups there as the Indian markets had almost a 3% up day on Friday.

I will be back with analysis of US stock markets and also a watchlist for next week sometime later tonight.

Make it a great Sunday!

Wednesday, June 22, 2011


Here are a few stocks which I like heading into today. The important levels are marked on the charts itself.

FTO - Like it on a break of 32.37

TIN - Wait for a break of 30.

INCY - Watchout for break of 19.

TZOO - I admit this is not my usual sort of play. It seems to have bottomed out but I would wait for a close over 60.

HOC - Looking good right here.

Take care and good luck!

Consolidation would be nice

An impressive show by the bulls yesterday ensured that the market finished with gains for four consecutive days. The action yesterday also meant that the market made higher lows for the first time in over a couple of weeks. Interestingly, the S&P finished just short of MA(20) level.

What next? Call me crazy, but I would rather see a day or two of consolidation here rather than another big move up. Its been four consecutive positive days for the bulls and some consolidation right over here, just below the MA(20), would increase the odds of staying over the MA(20) once they break it. Expect the downtrend line marked in the above chart to act as support.

I will be back with few charts for the watchlist.

Take care and good luck!

Tuesday, June 21, 2011

Indian stock market blog

Here is the link to the blog on Indian stock markets as promised:

Thanks to all those who have been following the present blog (which will continue BTW) and have made it so successful! Hopefully, you will drop by on the new blog too!

Thanks for reading!

Sunday, June 19, 2011

What's in a name?

I am glad to tell you readers that work has started on the new blog on the Indian stock market. However, I am short of ideas when it comes to coming up with a name for the new blog. While thinking of a name, it suddenly hit me that I had over 2300 followers on twitter and all the current blog readers that I could turn to in coming up with a name for the new blog. So, put on your thinking caps people! I need your help! I have already received quite a few suggestions on twitter. Thanks to all those who wrote in! 
P.S.: Hopefully, the new blog should be up and running on Tuesday.

P.P.S: @tradermarket247 is prohibited for coming up with any suggestions!

P.P.P.S.: Thanks to @SantaFe_Ram, @szaman, @VexTrades, @ramgopal25 and (grudgingly) @tradermarket247 so far.....

Friday, June 17, 2011

Another call from the broker....

Earlier this week, I had written about a SMS I had received from my Indian broker. Well, I received a phone call from them a few minutes back. Here is pretty much how it went:

Lady from broker: "The market is down"
Me: "I know that"
LFB: "You should invest right now. And then you can sell for a profit when the market goes up"
Me: "What if it goes down even more?"
LFB: "It goes up after going down"

Gotta start working on that Indian blog......But its afternoon here, and I am already giving some serious thought to what I should be drinking tonight.....Beer or bourbon?

Make it a great weekend!

Why consolidation here is not good for the bulls?

Make no mistake about that - this is certainly not an easy tape to trade. The markets bounced off MA(200) today, but things don't look too encouraging for the bulls. If MA(200) does break, the next support level is the March lows - 1256.

If you are long, you want to see the MA(200) act as support, but you don't want to see consolidation around these levels. Ideally, major moving averages should act as springboard and not as a consolidation zone. Too much time around these levels gives the market time to work itself off from oversold levels and the bears a chance to regroup and make a fresh attack on the indices. 

So, how to play these markets? All things said and done, the momentum lies firmly with the bears. Plus, with Greece weighing on the markets, this also becomes a news dominated market, making it a tough market to trade. If you are not comfortable shorting stocks or do not have time to monitor your positions closely, cash is not a bad option here. Remember, being short term investors, we have the luxury of staying in cash, which buy and hold investors do not have. This seems like a good time to use that option.

Take care and good luck!

Wednesday, June 15, 2011

Expected bounce but ........

The bounce that I have been talking about did finally happen. From the last blog post, " 1250-1260 is not only a strong area of support but also a well-known area of strong support. Because of that, I would not be surprised to see buyers step in even before the market reaches these levels. Rather, I expect that to happen. " As can be seen from the chart below, the low since this post was 1265.

So, definitely a good day for the bulls, but not a game changer as far as the overall picture is concerned. The momentum still remains with the bears. 1295 and the descending trendline still remain the resistance levels to watch out for. In fact, the market got rejected right at these levels, that I had pointed out on Monday, yesterday. I expect this bounce to last for a few days and oversold stocks to do well in the next few days, but caution is still warranted. Take smaller positions or be quick with those profits.

Take care and good luck!

Sunday, June 12, 2011

Indian stock market blog update

Just a quick post to update all those who had written in requesting for an Indian blog and also what all they would like to see in it. Firstly, thanks for your mails! Frankly speaking, I was expecting a good response from resident Indians and also those living abroad, but the response from people of other nationalities expressing interest in seeing an Indian market blog happen was surely a surprise. Just goes on to show the interest in Indian economy and success story these days! Well, the news is that I have decided to start a blog on Indian markets and it will be separate from the present one. It will go "live" sometime this week.

Let me end this post by giving an interesting incident from 10 minutes back that is in some way reflective of the "tips" being given on Indian markets these days. I got a SMS from my broker saying "buy ICICI on low of the day". End of message. WTF??!! They might as well tell you to buy any stock on the low of the day, sell it and short it highs. Repeat the process till you become a millionaire by the end of the day!

Take care and good luck!

Market close to support zone

The momentum continues to build in favor of the bears here but there is some good news for the bulls. The S&P is very close to entering a major support zone. That coupled with the fact that the indices are deep in oversold levels, and also taking into account the speed and magnitude of the recent decline means that I am expecting a comeback by the bulls next week.

Looking at the chart above, 1250-1260 has been an area of strength for the bulls and I am expecting it to act as strong support even at this time.

Here are some other points to consider:

(1) 1250-1260 is not only a strong area of support but also a well-known area of strong support. Because of that, I would not be surprised to see buyers step in even before the market reaches these levels. Rather, I expect that to happen.

(2) Even if we bounce here, overall advantage remains with the bears here. Take those gains quickly or keep a decent cash position until 1295 gets broken. Before that, I also expect the downtrend line shown in the chart above to act as resistance.

Following is the corresponding NASDAQ chart with important support and resistance levels marked for next week.

Take care and good luck!

Thursday, June 9, 2011

Rejected right at resistance

My overall thoughts on the market still remain the same as they were yesterday. Despite today's positive action, the bears remain firmly in control. I just wanted to point out that both the S&P and the Nasdaq got rejected right at important resistance levels today, thereby affirming the dominance of the bears and also making these the important levels to watch out for tomorrow.

Take care and good luck!

Expect a bounce

Make no mistake, the momentum lies clearly with the bears right now. That said, the market is way into oversold territory and I am expecting a bounce here. If you wanna play this bounce by going long, be sure to honor your stops and don't get too greedy. Even if we bounce really hard the next couple of days, remember a lot of technical damage has been done to charts during the last few days. Again, the bears are in control at the moment. Respect that. Now that the "warnings" are out of the way, here are some long plays :). All these stocks showed nice price action today on impressive volume.

Take care and good luck!

Tuesday, June 7, 2011


With yesterday's market action, the market now finds itself in oversold territory according to the McClellan Oscillator. This does not mean that the market HAS to bounce here, just that the odds favor a bounce now.

But here are a couple of questions before you get too excited about the bounce - 

(a) Seeing the momentum of the current down move and the break of key levels, do you think traders will be looking to buy into a rally or sell into it?

(b) If people are looking to sell into the rally or get out of their existing longs, will the rally last for long or even happen?

Take care and good luck!

Monday, June 6, 2011

The week ahead

Heading into next week, it's no secret that the momentum lies with the bears. Let's have a look at the daily S&P chart to see what are the important levels that could come into play this week.

In my last update on the markets, I had pointed out two levels of support for the bulls - (a) the bottom of a downtrending channel (b) the 1294 level from the April lows. The first of these support levels was broken on Friday but the second one still remains. That remains the first level to keep an eye out for this week. I wouldn't be comfortable holding too many longs overnight until we break the 1318 level, so there is another key level for you.
The McClellan Oscillator, an indicator the regular readers of this blog are well familiar with as we have used it often in the past to detect overbought and oversold levels, is still not at oversold region. But another down day, and we will be there. When we get there, disciplined longs can get in for quick plays but while doing so, do not forget that the momentum lies strongly with the bears until 1318 gets broken. Respect that. If you want to go short, wait for some consolidation or low volume move upwards here.

Take care and good luck!

Sunday, June 5, 2011

Indian stocks watchlist

For the time being, I decided to post a watchlist of Indian stocks that I will be keeping a close eye on next week here only and hopefully, there will be a separate blog on Indian stocks by next weekend.
Federal Bank Ltd - Like this until the trendline marked below is broken. Could run on a close over 457.

LT - Was impressive on a down day on Friday with the volume also being good. The earnings did surprise on the positive side and a break of 1750 could finally be on the cards.

Dish TV - Already in this one. Looking for a break of 80. Love the volume pattern. Strong support on 68 level means this can be bought even on low volume pullback.

Hindustan Lever - Broke from a lovely consolidation pattern on Tuesday. Would like to see some consolidation here before it takes a crack at 330.

MRPL - Bought some of this on Friday. Stop loss below 73 with a final target of 84.

Another stock that I will be closely watching is Arvind. Was "lucky" enough to sell half my existing position close to the highs last week and won't hesitate to buy it back on low volume pullback. One thing common between all the above stocks is the bullish volume. As a momentum trader, your biggest friend is volume. No volume, no play. Another thing common in all the above stocks is that they held up pretty well on the down days. This relative outperformance is something you want to see in stocks you own or want to own.

If you would like to see a separate blog on Indian markets, see here. Thanks to all those who have already mailed me!

I will be back with my take on the US markets for next week sometime later today.

Take care and good luck!

Friday, June 3, 2011

Indian stock market blog

Like I mentioned earlier this week, I moved to India last year and have also been trading the Indian markets for the last few months. I was going through my stock scans for the Indian markets for next week and I intended to post my scan results on this blog. But now I am thinking that since this blog has been about the US markets and the subscribers for this blog have subscribed expecting content about the US markets, the Indian market content will not be appreciated by these loyal readers and also those who access the blog through various readers.

Hence, I am thinking of starting a separate blog on the Indian stock market with overall market analysis as well as stock picks. But as I am sure anyone who has written a blog will testify, that writing a blog regularly involves a lot of hard work with very little monetary rewards (unless the blog becomes really huge!). So, if any of you readers would like to see a blog on the Indian stock market, please send me a mail at positiontrader @ (no gaps and also, that's ymail, not gmail!). Also please let me know what all would you like to see in the blog.

If the response is good enough, I would start the blog from this weekend.

Take care and good luck! Make it a great weekend!

Wednesday, June 1, 2011

Levels to watch out for

The last two days have been tough for trading, no doubt about that. But the good thing was how well simple old fashioned TA has worked during this time. The chart below shows that the market got rejected right at the resistance level from February highs. If you have a look at second chart (5 min), you will see that the market got rejected not once, but twice at this level.

That's all well and good but what lies ahead? Keep an eye on the lower trendline of the channel marked in the daily chart. If that breaks, I would be looking at 1295. I am not looking to add longs for swing trades here. But at the same time, we know how shorts have fared for over a year now. So, whatever you do, be nimble. There is a time when you can, and should, ignore overall indices and just focus on individual stocks. But now is NOT that time. Respect the important levels on S&P and the other major indices.

Take care and good luck!