We have today carried forward one long taken on 9th of September 2014 with SAR at 16112. Today BNF opened on a weak note gap down, and later in the afternoon it started to move up and touched 16300 levels and during last one hour it collapsed and closed at around 16214. Today also no action SAR also remained as it is. in the present case we would shift SAR only on move above 16363 only till that time SAR remains at 16112. Today end we have carried one long with SAR at 16112. This is the beauty of the system as we need not do any thing during the side ways movement. You can see we have taken long on 9th at the end of the day and till not we are still carrying the same no trades in all these days. You might be wondering whether all these are paper trades or actual trades are being made. i am actually taking the position when ever its indicated whether up or down. For last four days i am carrying forward my position just sitting idle during market hours but i know that when ever the move comes i would be in that direction and chances of making handsome gains.

M.Mahiidar

Enjoying Life

Trend is Friend.

Weekly technical Analysis for week ended 12^th September 2014

I am writing this weekly update after nearly one month’s time. Nothing has happened during last one month on nothing has happened as far as elliotte wave point of view. For the week nifty opened with gap up moved up slowly and then started to fall and ended up slightly up compared to last week. Nifty has been maintaining above 20 day EMA for last so many months from march onwards, in the mean time it has found support on it for two times and then move up, so till it maintains above 20 day EMA we can expect it to continue to move up slowly and steadily. 20 day EMA is at 8000 and 50 day EMA is at 7776 so these are the two levels to be closely watched as any correction in nifty is going to take support at these levels. if these are taken out then we can expect a healthy correction. But till that happens we can expect the market to move steadily upwards.

Till now in this uptrend, the retracement have been taking longer time than the rise, till this phenomenon is continued we can expect the market to make a steady up move. If that trend is reversed then we can expect the uptrend is over, till now it has not happened in last six months, once that happens the same can would be reported in our weekly update till that happens we can safely assume that uptrend is intact.

Elliott Wave Analysis:

I have been pointing out that nifty is moving in a corrective wave and we are in the up move in the corrective wave. The details working from the low of October 2008 is given in the following charts.

The above chart is from October 2008 to till date. As per my calculation we have completed wave –A which took 200 day from January 2008 to October 2008 and from there onwards we stated to form wave-B and we are still in formation of wave-B only. Wave-A of wave-B was from October 2009 to October 2010 and wave-B of wave-B is from October 2010 to Dec 2011 and we are in wave-C of wave-B from then onwards till date. We have completed wave-A and wave-B of larger wave-B and we are in formation of wave-C of wave-B from low of December 2011 onwards. Wave-C is splitting into its components and we have completed wave-1 and wave-2 and we are in formation of wave-3 of wave-C of larger wave-B. It is forming more complicated wave structure and now splitting into its components.

The details breakup of the wave-B is indicated by arrow in the above chart-1 is give below:

It can be seen that the wave-C of overall wave-B is given in the chart-2 above it can be seen that the wave-C is splitting into its components i.e. into 5 waves the 5 waves are being shown in blue colour in the above chart. It can be clearly seen that the wave-1 and wave -2 have completed and we are not in formation of wave-3 of wave-C of larger wave-B. It can also be seen in the above chart that wave-1,2,3,5 of wave-3 have completed and we seems to have started the wave-5 of wav-3 of wave-C of larger wave-B. The waves break up of wave-3 to 5 is given in the chart 3  below.

The break up of wave-3 is given in the above chart. It can be seen that we have completed wave-4 in July 2014 and we are still in completion of the same. It seems that we are in wave-5 of the wave-3 and it seems that we have completed wave-1 and 2 of wave-5 and we are in formation of wave-3 of wave-5. It appears that we might have completed wave-1 of wave-5 and we are forming wave-2 of wave-5 after which wave-3 would start so we can expect the market to move up on completion of wave-2 as per this we might not see nifty going below 8049 and maximum 7855( which is doubtful). So we can expect a slight sideways movement post which we can expect it to make an up move. The wave-1 was of length 468 points so if the wave-3 extends the we can expect it to be of length 758 points from the low of wave-1 which gives a target of 8619. Wave-3 would be generally be more that the wave-1 so it would be at-least 470 points means 8332. Once the wave-3 of higher wave-3 is completed we can expect the market to correct wave-4 and then the wave-5 would start post which market would culminate and we can start an down move which would be longer that the corrections which we have seen in recent 3-4 years. So it seems there is some time till the market tops and we have scope for up-move in the markets. This interpretation is as per now and as it changes or progress the relevant medications to the wave structure would be worked out and updated in our weekly updates.

M.Mahiidar

Enjoying Life

Trend is Friend.

September 14, 2014 6:18 PM

Yesterday i did not post as i was unwell. Yesterday and today we carried forward on long at 16220. yesterday it was gap down opening above our SAR so the rule says that SAR remains as it is BNF moved below our SAR but did not go below the filter which we use, so we continued with our positions but shifted our SAR to yesterdays low. Today it opened on a positive note and there after it fell every sharply but maintained above our SAR, so during last two days we did not do any thing except shifting our SAR. Today we carried our one long with SAR at 16112 minus filter of 23.

M.Mahiidar

Enjoying Life

Trend is Friend.

Examples of investments at all time highs giving good returns:

The above chart is of TCS which has out performed when the market were not moving any where from 2010 to 2013 end. In march 2010 TCS has formed an all time high which has all chances of prompting to buy with stoploss. The Buy would be around 750 levels and you see over the period of last four years the stock has trebled. If you see the financials its a debt free company, from 2005 to 2010 its EPS has increased from 10 to around 35 indicating that the financials were improving fully and there after also the EPS was increasing year on year and now FY-14 it has an EPS:106. You can see that if a fundamentally strong company when makes a new high its a buy and chances of giving good returns are really high. All the black arrows are the buy points.

the above chart is of NATCO pharma it made an all time high at 167 in 2010 and it is nearly a 9 timer in last four years when the market did not move any where except for last six months. During the three years prior to new high its turn over has trebled and EPS has more than doubles and with consistent increase during all these years signalling that the fundamentals are improving and has a potential out-performer in making and look what has happened.over last four years also its margins were improving and also EPS was consistently increasing.

 The above chat is of Page industries. it made all time high in 2009 at around 500 levels and not its a 16 timer during most of the period the market did not move any where. If you see the financials three years prior to new high the EPS was increasing at the rate of 30-40% along with increase in turnover and improve in margins. These all point towards improving financials necessitating a buy and if you see from then onwards till now it EPS has increased at an CAGR of 38%. EPS has increased from 28 to 147 and you see the price. 

I can give you innumerable examples which has give spectacular returns after they make a new all time high. So all time high is not a point to sell but atleast we should try to buy if the last three financials of last three years(at-least two years) are improving and latest quarters are also promising then its a buy but with Stop loss either technically or as per individuals risk apatite. 

M.Mahiidar

Enjoying Life

Trend is Friend.

Today i carried forward on long with SAR at 16163.Today was an event full day, market swinging from one direction to other. In this we have our SARs being hit. The market opened slightly strong there after it moved down and hit our SAR so we reversed our position to short resulting in loss of 51 points. There after it made a low of 16135 and after that it reversed and started to move up and closed at 16238. During the last 5 minutes we reverse our position to long as on the basis of EOD reversal.

EOD reversal- (its only on the day in which the position is taken) the market hits our SAR and we reverse our position to short and on the same day if at the close it moves up and move above our SAR( which has resulted in taking short position) then we should reverse our position to long. The reason being that the bears did not have strength to taken it lover that the SAR which signifies the strength of the bull considering this we reverse our position to long. 

we carried forward long with SAR at 16160.

M.Mahiidar

Enjoying Life

Trend is Friend.

On Monday i carried forwarded one short with SAR at 16125. On monday market opened above our SAR, so the rule says that if we are short and there is gap up opening above our SAR wiat for the first 15 min bar to complete and shift SAR to high of the bar plus gap filter in line with it we have shifted our SAR to the 16214 and later in the day SAR was hit and we shifted our position from short to long and market continued to stay above it. In the short transaction we have made a loss of 145 points. Monday we carried forward our long with SAR at 16163(16188-23).

M.Mahiidar
Enjoying Life
Trend is Friend.

All of us who are investing into stock market are looking for strategies for investing into stocks at correct price and getting out at top. Generally it is said that buy low and sell at high price easy said done. Difficult to identify the low and also high price. Generally people perceive that buy low means that it should be bought at low price compared to its all time high price, the lower the better and wish to sell at the high price probably at 52 week high all time high. So generally to identify the low price novice investors look into 52 week low stocks and try to buy at 52 week lows planning to sell when it moves up. But the market is market, generally 52 week low stocks further go down denting the confidence of the investors and they finally blame the market or the so called analysts. They dont have strategy to buy and also no strategy to sell so they suffer.But they generally do not make an slight effort to understand the market, i generally donot call understand the market but i call it as following the market.

To day i wish to bring into one strategy which has all possible chances of giving good returns over period of time.

The strategy name is

All time high:

Generally people are reluctant, to buy at all time high, as they thing that if the stock is at all time high then it should be sold and not bought so they refuse to look at the stock which is at all time high. But actually its the point to buy. Here the all time high is made after some consolidation the longer the period the better.You should buy at all time high made after consolidation, with stop loss at the nearest pivot low or the 200 day EMA or 100 Day EMA. Stop loss is a must for either trading or investments.
Now comes the question why any body should be encouraged to buy at all time high. Technically all time high signifies that the buyers have out done all the sellers till that point of the time. Meaning that buyers are more that sellers and this becomes the case for buy. And also the investors might be betting on the improved financials in the stocks which they intend to buy.
 
Now the question comes whether one should look to buy stocks which make all time high, it cam be done, but to protect our selves one should stick to stocks which are fundamentally good. The fundamentals should be improving over last three years at-least last two years. Higher the growth year on year the better. Look in the recent quaters if the quarterly results are also improving QOQ then its also is a good news. Higher the growth rate the better, all these point out that the company is fundamentally good and is fundamenatals are improving justifying the price( all time high). Usually i look into % increase in EPS YOY and QOQ to decide on buy decision. The higher the % increase the better.
I always try to buy the price at all time high and the fundamentals are improving. i have seen so many stocks which have made all time high and after that they have risen substantially from those levels.
I would give one or two examples today and would give those stocks which have give spectacular returns to the investors who have bought at all time high.

 The above chart is of Aarti Drugs, it made an all time high in october 2012 and it corrected to the neck line and then from there it reversed and went on to make all time high again in february 2014 after nearly 1 and half year consolidation. if you see the fundamentals at that point of time its have it has CAGR increase in EPS for last three year at 39% and latest quarters also the increase in EPS was around 40% QOQ for last three to four quarters  which clearly point towards the improving fundamentals and investors are prepared to pay high price for the stock and look what happened the stock has been nearly 4 timer in short period of time. the two red arrows are the probable points of buy.
Another stock:

The above chart is of Granules india it made an all time high in 2012 came down and took the support of the trend line, moved below it and made a spring line reversal and made again all time high at around 200 in January 2014. If you see the fundamental at that point of time the EPS has increased at a CAGR of 52% for last three quarters and the latest 3 quartes the % increase in EPS was more than 100% all these were pointing towards improved fundamentals and justifying the price at all time high and it has turned 4 timer from those levels in very short period of time.

Fundamentally strong stocks when they make all time high after long time they become a screaming buy with high margin of safety. but in any case we should have stop loss to the extent of which you are prepared to take.

I would give other examples which have been 20 to 30 timers in last five years when the market was not so good.

Any clarifications are welcome and glad to confirm the same

M.Mahiidar
Enjoying Life
Trend is Friend.