Sunday, December 31, 2017

Weekly Review - 01st Jan, 2018

Dear All,


The SEBI's decision to allow exchanges to provide equity and commodity trading from next year; and to relax the entry norms for foreign portfolio investors boosted sentiment and Good News for 2018.

Economic Data :-

With the new month ahead, certain domestic data will be released next week. Nikkei manufacturing purchasing managers’ index (PMI) will be rolled out on January 2. The services PMI will also be rolled out on January 4, 2018. Official data on M3 money supply will also be released later in the upcoming week as well.

FII Flows :-

Domestic investors continued to be net buyers for December, offering support to the market at a time when FIIs have looked hesitant in this market too. Experts believe that it is this buying by DIIs that has provided the cushion to D-Street. For December, FIIs sold Rs 6,411.57 crore worth of shares, while domestic institutional investors (DIIs) were net buyers worth Rs 8,142.88 crore.

Global Cues :-

The Street will watch out for crucial economic data coming in from developed and other emerging markets. For instance, China, Europe and US will be declaring their manufacturing PMI on January 2, followed by truck sales and services PMI in US and China later in the week. Further, market could take cues from European CPI inflation, along with US employment data.

Crude :-

The Street will watch out for cues on the movement of crude oil. As such, markets have been rattled in the recent past on the back of rising oil prices. Brent crude prices have clocked USD 65-mark and have hovering around the same region. Meanwhile, US crude is also seen rising and settled around USD 60-mark.

Bond Movement :-

Bond yields have been rising in the recent past, largely on the back of inflationary issues as well as rising crude prices. This has, in turn, affected the markets here and got investors cautious of the movements as well.

Last week, the yields had also jumped after the government announced additional borrowing of around Rs 50,000 crore through gilts. The RBI has also swung into action as it cancelled two bond auctions on Friday. Yields were seen stabilizing after that move.

Going forward, experts believe, there could be further hardening on likely reversing of easing cycle by the RBI amid inflationary risks. Government borrowing has also worried investors.

Bitcoin :-

The Street would also look to see the regulatory view on bitcoins, the virtual currency which has witnessed phenomenal gains in the recent past. The currency clocked USD 19,000 during the year, before seeing a sell off, but has settled down from its wild swings.

The Ministry of Finance has cautioned people against investing in virtual currencies and compared them to ponzi schemes.

"There has been a phenomenal increase in recent times in the price of Virtual 'Currencies' (VCs) including bitcoin, in India and globally. The VCs don't have any intrinsic value and are not backed by any kind of assets. The price of bitcoin and other VCs, therefore, is entirely a matter of mere speculation resulting in spurt and volatility in their price."

Moreover, the Ministry of Finance has cautioned people against investing in virtual currencies and compared them to ponzi schemes.

"There has been a phenomenal increase in recent times in the price of Virtual 'Currencies' (VCs) including bitcoin, in India and globally. The VCs don't have any intrinsic value and are not backed by any kind of assets. The price of bitcoin and other VCs, therefore, is entirely a matter of mere speculation resulting in spurt and volatility in their price."

Simultaneously, in a note to clients, Morgan Stanley analyst James Faucette and his team made the case that it difficult to ascribe value to the cryptocurrency.

Bitcoin can’t be considered a 'real currency' like the U.S. dollar, because the cryptocurrency doesn’t have an interest rate associated with it, i.e. it has no cash flow, Faucette said.


OPINIONS VS FACTS :-

Very few new traders take the step from trading opinions and predictions to trading actual price action and signals. Amateurs take trades based on feelings while professionals have fact based reasons. A signal is a quantifiable reason to take a trade based on its price action, a technical indicator, a trend line, or a price pattern. Even trading the psychology of the market requires price to arrive at a level that aligns with the fear or greed of the masses that the trader is trying to profit from. “Buying a dip” is not a signal while buying a pull back in the Nifty or Bank Nifty Index to the 50 day simple moving average or prices reaching the 30 RSI on a daily chart inside an uptrend over the 200 day simple moving average is a signal based on quantifiable facts. Also any signal should be researched on historical charts or back tested to see the historical profitability of trading off the signal. Historical price patterns tend to repeat over and over and create tradable signals for capturing trends and reversals.

Other types of signals are more discretionary and can rely on pure price action and buying breakouts of price ranges, trend lines, and chart patterns. Trading breakouts of ranges, lines, and patterns are quantifiable but leave a lot of discretion with the trader and are also are difficult to back test. Traders have to stay consistent with how they draw trend lines and identify chart patterns so they do not start seeing what they want to see or read price action is a biased manner to fit their preconceived beliefs. This type of breakout trading is simply trying to capture the beginning of a new trend as price leaves the previous trading range and signals a potential change in trend. Having a reason for taking a trade is still far better than simply trading off a hunch, a belief, a feeling, or a prediction. I personally prefer using more quantified trading signals like price support and resistance levels, moving averages, MACD, and RSI to take out as much of my opinions as possible from my trading decisions.

In trading it is always important to have a specific reason for entering a trade that will put the odds in your favor for potential winning percentage, risk/reward ratio, and a great chance to be on the right side of the trend in your time frame. Trading without quantifiable signals puts your trades at no better than random and on the side of the majority that are trading their internal beliefs instead of the external realities of the price action of the market. You want to replace as much of your discretionary trading as possible with quantifiable signals that give you a specific reason for entering a trade. Beliefs and predictions about what the market will do, should do, or can’t possible do is not a trading system, quantified entries and exits that express a winning trading system is the path to profitability.

>>> Nifty Monthly Chart <<<

>>> Click the chart to see on full screen <<<

On Monthly Basis - It seems we have more Rally Pending till 11400. It doesn't mean that we are going straight on the upper side of the target. Many consolidations and corrections to be met in. It's going to be very interesting year of 2018 - for Stock Market Lovers.

>>> Nifty Weekly Chart <<<

>>> Click the chart to see on full screen <<<

Price on a break out may test the upper channel or 10800+.

>>> Nifty Daily Chart <<<

>>> Click the chart to see on full screen <<<

If this is a 5th and last leg of rally - Price still have rally pending.

>>> Nifty Hourly Chart <<<

>>> Click the chart to see on full screen <<<

Resistance @ 10550-570 if breaks above Fresh Rally Possible.

>>> Bank Nifty Monthly Chart <<<

>>> Click the chart to see on full screen <<<

Last 2 month candles sticks are showing in-decisions.

>>> Bank Nifty Weekly Chart <<<

>>> Click the chart to see on full screen <<<

Weekly Chart - Facing resistance from the trend line.

>>> Bank Nifty Daily Chart <<<

>>> Click the chart to see on full screen <<<

Last Leg, might be inside a triangle.

>>> Bank Nifty Hourly Chart <<<

>>> Click the chart to see on full screen <<<

Resistance 25780 - if not crossed - might see a correction till channel support.

>>> DrReddy's Lab - Posted on 27th Dec, 2017 <<<

>>> Click the chart to see on full screen <<<

Posted on 27th Dec, 2017 and Holding Long.

>>> INFRATEL - Hourly Chart <<<

>>> Click the chart to see on full screen <<<

Booked Profit Rs.17000/-

>>> BEML - Daily Chart <<<

>>> Click the chart to see on full screen <<<

Waiting for a Wedge break out - We are Long.

>>> Performance for the Month end of Dec 2017 <<<

>>> Click the image to see on full screen <<<

Above performance is not a Promise or guarantee for the given Profits or Loss.Performance given based on 1 lot at a time and clients Profit differ as per the margin availability and Number of Lots taken by them. We may or may not re-enter the Calls given here hit Stop Loss, as per market movement. The charts given above are just for educational purpose only and we don't recommend any Entry / Buy or Exit / Sell. Reader must taken their own decision or consult their qualified Analyst before making any decision

>>> N4A & Whatsapp <<<

Send registration request with name and location.