HAVE A GREAT WEEK END

COMMON AND MUST TO KNOW RULES FOR INVESTORS

• Grab stocks when good companies post bad subdued or less than expected quarterly numbers. This could be a good opportunity to buy at discounted price.


• Always keep a list of good companies ready with the price at which you want to buy their stocks and keep checking their prices. This practice gives excellent exercise to individual investors.


• Always remember that acquisition price will determine your retrun first of all and other variable more so later.


• Keep your investment broking and demat account different from trading account.


• Write this on stone that a Bear market is the BEST time to go on hunting for investors.


• Never work on rumours. That’s traders’ recipe.


• Never over diversify if you want to make maximum or optimum of stock investing. Mutual funds take similar risks as you would. If you are selecting with ‘value-investing’ and basic principles of investing, then you do not need mutual fund. You can diversify on your own by diversifying amongst sectors, and other classifications.


• Use mutual funds for their sectoral schemes, gold etf, index schemes (we do not recommend index schemes of high return), commodity, real estate, and international exposure schemes.


• Do not judge soundness of investment by day to day fluctuations.


• Do not turn your trading positions into investment positions.


• Above all most importantly learn and adapt the concepts of Behavioral finance, or psychology of investing/money.


• Never ever, ever invest on borrowed money, not even in IPOs.
  


• Do not frequently change your investment decisions. Do your homework. Take time to decide on things but do not variate unless absolutely necessary.


• Keep liquid cash for contigent requirements.


• Believe in the ‘power of compounding’. The earlier you start and the regular you are, the wealthier you’ll become.


• Enweapon yourself with mental preparedness to stay immune from two enemies namely ‘panic’ and ‘euphoria’.


• Determine your targets. Get out when you get desired return. Don’t become greedy for more and more. Find new investment.


• Find a good broker, and not the cheapest broker. To save that 0.10% in brokerage, you may lose out a lot with a wrong broker.


• Before executing order, ask about the rate with your broker and put order only after confirming price.


• Never try to time the market. Never ever. Yes investors should be bear-market species. But in the beginning or midst of a bull market as well there are always attractive investment stocks. Always.


• Never sell on a bad day in panic.


• Listen to big boys. Forget the analysts. Listen what the PM is saying, what the Central bank governor is saying. Listen to top independent economic institutions and high profile senior industrialists and economic guys. Same applies for international watch.


• If you are not a seasoned investor or do not want to become one, then SIP investment is also a very good option. Here the investor does not get investment at high prices. It is averaged out and over the long term, the returns are not dis satisfactory.


• If you have big portfolio and old one too. Then shuffle it for changes into economy and businesses once in a year or three. Port, education and power stocks recently, for example.


• Investing is not about income. It is about wealth creation.


• Don’t buy good companies, buy good stocks.


• Bad company stocks at good valuation are many times better than good company stocks at bad valuations.


• Never fear correction. This is inseparable part of market. Train yourself and prepare for all situations peculiar to markets.

TECHNICAL ANALYSIS ARGUMENTS

Lets see some theory based analysis.

(1) FALLING WEDGE

If you look at the chart one we have drawn two trend line on lower top lower bottom formation this is called falling wedge as per general rule falling wedge gives trend reversal from falling market to rising market.

If this happen then we may see faster recovery from current levels.

(2) FIBONACCI-RETRACEMENT

Look at the chart no two we have drawn the Fibonacci retracement from 7697 to 17658.

The value of 23.6% retracement comes at 15400 .if we manage to hold this levels and market get recovery then we may consider this support has been taken by index.

It is not necessary to touch the support levels.

(3) 233 DMA

Look at the chart no. 3.

200 dma is widely used by all over world.

But at this crucial time we have used 233 dma ,if we calculate the value of 233 dma then it is 15380.

If market continues to trade well below 233 dma for 2-3 week then main trend can be in danger.

But in our case if we manage to hold this level then it will create heavy buying from the traders who follow technical analysis.

(4) DOW THEORY

Look at the chart no. 4.

As per dow theory index need to move in higher top higher bottom formation.

Index has already made higher top at 17500 now we need to substation above higher bottom which is placed at 15300.

If we manage to hold this support and cross the higher top of 17500 then we will consider this as normal pull back from 17500 levels and main trend of higher top higher bottom is intact.

(5) CANDLE THEORY

Look at the chart No. 5.

Look at the chart no 5, on quarterly chart index has make “HANGING MAN” formation.

As per hanging man formation if next candle close below the low of hanging man on quarterly basis then bears can take control of market.

On the other side if next candle close above the high of hanging man which is 17500 then bulls will take control of the market.

FUNDAMENTAL ANALYSIS ARGUMENTS

In India we have good corporate earning along with good GDP numbers unlike most countries last year.

India has political stability and growth visibility, this thing likely to continue to be one of the favored markets.

Indian economy is domestic consumption story rather then export oriented so we will have our own growth story on the long run.

We believe that gold price are at higher levels and may not substation at this levels for now as dollar index has start recovering and will continue to recovery till 81 which will bring more correction in gold market .

We believe that falling gold price is good news for emerging market like India and china.

Hedge fund money will find another asset class (emerging markets) to park their money to earn good return.

If we remember in 2008 hedge fund have taken crude oil to $ 147 and then it fell to $32 and this money enter in to gold-due to sub-prime crisis and falling dollar index against major currencies.

Always remember money moves from one asset class to another asset class.

Dollar index to strengthen further and gold price will correct further and this will force hedge fund managers to exit from gold and find new asset class (emerging markets) to invest their money.

At this levels India and china offers good domestic consumption story with young generation will attract hedge fund money.

DAY TRADING STRATEGY
OF NIFTY FUTURES – AUG 20

Overall support is good @ 5440

If trades above 5421, hike upto

5559-75-88 is for sure

Below 5421 if stays for 15 minutes

Non-stop slide upto 5490-76-63

is possible.

Use the levels for your trading, but do not trade blindly..

ALL THE BEST

BANK NIFTY

Trend line Support (in day chart)

today@ 10642

and @ 11009 in intraday card

Buy btwn 11102-20

T1- 11150-65

T2- 11177-96

Sell btwn 11043-25

T1- 10996-80

T2- 10968-50

SHARE TIPS TODAY (AUG 20)

INTRADAY

SELL POLYCORP @ 431

T1 – 427

T1 – 424

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For further details,

Contact Admin/Technical Analyst @

(0)9788563656

&

(04142)236656

-Mahindeesh (a) Sathish

Cuddalore-2

Tamil Nadu

India

TODAY’S QUOTE

Belief in the truth commences with the doubting of all those “truths” we once believed.
-FRIEDRICH NIETZSCHE, "Truth Will Have No Other Gods Alongside It"

RELAX CORNER

JUST SMS TO YOUR PAL

*In battle Sardar was wearing mosquito net
instead of bullet proof jacket
why?
?
?
?
Saradar replied
O jis wich machar nai war sakda
goli kithon lange gi


*Sardar Bunks office n goes to home.
He saw his wife with his boss.
He comes back running office and says,
‘baap re, boss ne dekh liya hota to maar daalta.

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