This is the blog of Hrishikesh Prabhavalkar, a commerce graduate with close to 16 years of stock markets experience. With this blog you can get your self updated about the Indian Capital Markets, Political stories, and things impacting the economic growth.
Thursday, December 31, 2015
Evening Star . . .! ! !
Wednesday, December 23, 2015
7870 crucial......
Friday, December 18, 2015
Stuck between a Falling and a Rising window . . ! ! !
Indian markets are expected to open gap down by > 40 points.
As expected yesterday, Nifty has taken a resistance near the range of 7820-7860 (A downward gap on daily charts called as a Falling window Candlestick pattern) and the immediate support now will be 7800-7730-7700 (there is also an upward gap (a Rising window) on daily charts of Nifty with the range of 7705-7715) on the lower side.
I personally feel that if the markets are going higher, then 7800 should not be broken, 7730 however, remains the key for bulls over short term. RSI on hourly charts have taken a support near 60 mark which is a bullish sign, and short term view for the markets will still be up till such time RSI on hourly charts trade above 60 mark.
Cheers
Hrishi
Thursday, December 17, 2015
Bulls are back ! ! !
US Fed Rate hike explained.... ! ! !
Friday, December 11, 2015
Last Engulf....
Hi All
Personal Observation..
Markets gave a bearish engulfing pattern at the end of a down trend... which is a sign of relief. Its termed as Last engulf pattern and can help markets to have a small pull back with supports near 7540
Monday, December 7, 2015
Trend Line support....
Tuesday, December 1, 2015
Why Congress would want GST to be implemented by BJP only after 2017 . . .
An interesting read......
Let's start with some facts. No government across the world has been re-elected after they implemented goods and service tax (GST). Not just that, the benefits of the GST were always reaped by the succeeding government.
In India, all the earlier governments from the NDA led by Atal Bihari Vajpayee in 1999 to UPA (1&2) led by Manmohan Singh had plans to implement goods and service tax (GST). It's a surprise then that even in 2015; Narendr ..
Monday, November 30, 2015
A Good read on GST benefits....
A Good read on GST benefits....
Indian truck drivers clock an average of 280 km per day, much below the world average of 400 km per day and far below the 700 km the average truck driver in the US does every day. The underperformance of Indian truckers has less to do with bad roads and less fancy trucks and more about prevailing archaic laws.
Truck drivers in India spend 60 per cent of their time off roads negotiating check posts and toll plazas, says UBS Securities, which has also found that there are 650-odd check posts in the country and 11 categories of taxes on the road transport sector.
Since road traffic accounts for 60 per cent of freight traffic in India, the slow movement of trucks across states leads to productivity loss. According to UBS, if the distance covered goes up by 20 per cent per day, Indian truck productivity would improve by 12 per cent.
Higher productivity would cut the need for buffer stocks; reduce the loss of perishable goods, cut down the need for many warehouses, etc.
Analysts say the implementation of the goods and services tax (GST) could provide the kind of productivity boost illustrated above. Gautam Chhaochharia, head of India Research of UBS Securities, explains the benefits of GST,
3) Widen tax base: GST will give credits for all taxes paid earlier in the goods/services chain incentivising tax-paying firms to source inputs from other registered dealers. This will bring in additional revenues to the government as the unorganised sector, which is not part of the value chain, would be drawn into the tax net. Besides, states will be allowed to tax services (as opposed to only the central government) under the GST.
Friday, November 27, 2015
Bottom Fishing ! ! !
Thursday, November 19, 2015
Should you invest in sovereign gold bond scheme?
Worth reading article on Moneycontrol....
Abhimanyu Sofat AdviseSure The government, on 5th November 2015, approved Sovereign Gold Bond (SGB) to reduce the demand of gold in physical form for investment which has stirred a lot of interest among investors and buyers of physical gold. SGB scheme offers the purchase of bonds denominated in rupees per gram of gold. Both individuals and corporates can invest in them. So what is in it for you as an investor?
Read more at: http://www.moneycontrol.com/news/commodity/should-you-investsovereign-gold-bond-scheme_4159661.html?utm_source=ref_article
Friday, October 16, 2015
Gloomy days ahead . . . ! ! !
Thursday, October 8, 2015
Darkness Engulfing
Back with the market update blogs after Ganapati Holidays.....
Nifty after bottoming out @ 7540...... now trading near a resistance of a downward gap from 8090-8225....
After 6 consecutive positive closes, today Nifty closed negative by around 0.5% @ 8129...
On daily charts a bearish candlestick at a resistance, increases chances of a weak outlook for short term.
Below 8100-8080, Nifty can come down till further support zones of 8000-7875-7700.
However 8080 level remains crucial for any downfall to unfold. Also, IV (from India Vix chart) looks like taking a support near 1699, and likely to bounce back from here, which in turn again raises concerns for bulls. Traders are also advised not to take a too many leveraged positions as the volatility is likely to increase going forward.
Supports - 8100-8080-8050-8000
Resistances - 8160-8200-8230
Traders advised to play safe with strict stop losses for Long and short trades on the back of higher volatility expectation.
Cheers...
Wednesday, September 30, 2015
Interesting read .... Rate cut of .50% - Is it really meaningful to us.....? ? ?
EMIs down by Rs 20 per lakh, we will all buy cars now | A A A |
Vivek is a writer who has worked at senior positions with the Daily News and Analysis (DNA) and The Economic Times, in the past. He has just finished writing a trilogy on the history of money and the financial crisis. The series is titled Easy Money. His writing has also appeared in The Times of India, Business Standard, Business Today, The Hindu and The Hindu Business Line.
Vivek Kaul |
This line is believed to be the source of another quote that often gets attributed to Einstein: "Everything should be made as simple as possible, but no simpler." Irrespective of whether Einstein said this or not, it remains a very powerful quote.
It is typically applicable in scenarios where we are trying to explain things to people. And in our zeal to explain things we end up making things much simpler than they actually are. Now take the case of the Reserve Bank of India's decision to cut the repo rate by 50 basis points (one basis point is one hundredth of a percentage) to 6.75%, yesterday. Repo rate is the rate at which RBI lends to banks and acts as a sort of a benchmark to the interest rates that banks pay for their deposits and in turn charge on their loans.
This immediately led many analysts and experts who appear on television to conclude that EMIs will now fall and hence, people will borrow more and buy cars, bikes, homes, and so on. This simplistic sort of analysis you would have read by now in your daily newspaper as well.
Only if it was as simple as that.
The banks borrow deposits at a certain rate of interest. They lend these deposits as loans at a higher rate of interest. Hence, for banks to cut the interest rates at which they lend, they first need to cut interest rates at which they borrow.
Further, even if banks cut deposit rates, after a cut in the repo rate, they may not cut lending rates or they may not cut lending rates to the same extent as the deposit rates. As the RBI said in a statement released yesterday: "The median base lending rates of banks have fallen by only about 30 basis points despite extremely easy liquidity conditions. This is a fraction of the 75 basis points of the policy rate reduction during January-June, even after a passage of eight months since the first rate action by the Reserve Bank. Bank deposit rates have, however, been reduced significantly, suggesting that further transmission is possible."
Before yesterday's 50 basis points cut in the repo rate, the RBI had cut the repo rate by 75 basis points between January and June 2015. In response to this banks had cut their lending rates by around 30 basis points on an average. They had cut their deposit rates more.
Why was this the case? In some cases, banks were simply trying to make more money. In other cases, particularly in case of public sector banks, the banks also had to deal with a huge amount of bad loans that had been piling up. Basically banks had lent money to corporates, who were no longer returning it. In this scenario, in order to maintain their profit levels, banks decided to cut their deposit rates more than their lending rates.
Further, banks also need to compete with small savings schemes offered by India Post. Hence, they cannot cut interest rates on their deposits beyond a point, unless the interest rates offered on the small savings schemes are cut as well.
The larger point being the "transmission" as experts like to call it from a repo rate cut to falling interest rates on banks loans, is not so straightforward, as it is often made out to be.
In the press conference that happened soon after the RBI rate cut, the economic affairs secretary Shaktikanta Das said that the government would review the interest rate offered on small savings schemes like the Public Provident Fund (PPF) and post office deposits.
Soon after this, the State Bank of India cut its base rate by 40 basis points to 9.3%. The cut will be effective from October 5, 2015. Base rate is the minimum interest rate a bank charges its customers. This cut by the country's largest bank is expected to force the big private sector banks to act as well and cut their base rates. Andhra Bank also cut its base rate by 25 basis points to 9.7%.
Hence, this time the transmission of lower interest rates after a repo rate cut is likely to be faster than in the past. Nevertheless, does that mean consumption will pick up because interest rates are now slightly lower?
Let's do some basic maths to understand this. SBI currently offers a car loan at 10.05% to men, 35 basis points above its base rate of 9.7%. For women, the rate of interest charged is 10%.
A car loan of five years of Rs 5 lakh at 10.05% would mean paying an EMI of Rs 10,636 in order to repay the loan. With the base rate being cut by 40 basis points, a new car loan would be offered at an interest of 9.65%. This would mean an EMI of Rs 10,538 or around Rs 100 lower. Hence, for every Rs 1 lakh of loan, the EMI will come down by around Rs 20 (Rs 100 divided by 5).
So, does that mean people will now buy cars because the car loan EMI will be down Rs 20 per lakh? Does that also mean that people were earlier not buying cars because the car loan EMI was Rs 20 per lakh higher?
If the car industry is to be believed that seems to be the case. Rakesh Srivastava of Hyundai Motors told the news-agency PTI that the rate cut was a "festival gift" from the RBI. R S Kalsi of Maruti Suzuki said: "On the whole, it gives a good signal to customers. The market so far has been moving very slowly but with this (rate cut) sentiments will improve. It gives the much-needed boost to the market in the pre-festive season."
In fact, Pawan Munjal of Hero Honda also joined the rate-cut kirtan and said: "It has come at an opportune time as it will help in raising customer sentiment during the festival season."
Hero Honda as you would know is in the business of selling two-wheelers, motorcycles in particular. SBI currently charges 12.85% on its Superbike loan. The EMI on a Rs 50,000, three year loan, would work out to Rs 1681.1. With a 40 basis points cut, the new interest rate will be 12.45%. The EMI on this will be around Rs 1671.5, or around Rs 10 lower.
So people will go and buy bikes because the EMI is Rs 10 lower now? And they were not buying bikes earlier because the EMI was Rs 10 too high?
This sort of simplistic logic on part of corporates and analysis on part of the media, really beats me.
People will consume and buy things when they feel confident about their economic future. This will happen when they see job security and steady increments on the way. Steady increments will come when corporate profits start growing, which isn't the case currently. Corporate profits will start growing when the corporates are able to clean up the excessive debt that they have on their balance sheets now, among other things. And all this is easier said than done.
At the end of the day, monetary policy can only do so much.
Postscript: I would also suggest that you read the excellent piece by Tanushree Banerjee, Co-Head of Research at Equitymaster, on yesterday's rate cut. You can read the piece here.
Friday, September 11, 2015
Bulls Partying.... But be cautious....
Wednesday, September 9, 2015
Is it a reversal ? ? ?
Wednesday, September 2, 2015
Bears close the day.....
Tuesday, September 1, 2015
Bears attack, Bulls ready? ? ?
As expected, Nifty saw a huge decline after breaking 7960-7950 levels and now trading below 7800.
Now, the recent low of 7667-7650 will act the last ray of hopes for midterm bulls, sustaining below which will open the gates for 7500-7300-7000....
Even if there is a bounce, prima facie it will be a short lived bounce (called as dead cat bounce) and 8100 will act as a crucial resistance, midterm bias will only change after surpassing 8100-8200 levels.
However, for short term bias 7650 levels will be very crucial to watch out for and will turn positive if and only if Nifty surpasses and sustains above 7800 mark today or tomorrow.
Hrishi
Friday, August 28, 2015
Fell from the Top......
Sign of Concern ! ! !
Tuesday, August 25, 2015
Bottom Fishing Successful ! ! !
Bottom Fishing ! ! !
Monday, August 24, 2015
Black Monday ! ! !
Friday, August 21, 2015
Rising Window Calling....
Cheers
Hrishi
Thursday, August 20, 2015
Markets in bad mood.....
Tuesday, August 18, 2015
The cockroach theory by Sundar Pichai . ! ! !
Friday, August 14, 2015
Why Parliament did not function......
Thursday, August 13, 2015
In the Independence day week Bulls are dependent a lot on 8321 ! ! !
Owing to domestic and global negative factors Nifty plummeted badly in this Independence day week.
Though a positive weekly close has a remote probability Bulls will still depend a lot on 8320-8300 levels. A close below the same and Nifty is set for another down turn will 8200-8100-7950 levels.
However, personally I feel a lot of negative things are now factored in by now (Like, Yuan devaluation, GST not passing in, Policy Paralysis due to non functioning of both the houses of Parliament, etc.) and still Nifty managed to stay above yesterdays low of 8338 which is a sign of relief.
So If we hold 8320-8300 levels on closing basis a short term bounce can not be ruled out.
Bulls .... last ray of hope.... 8320...
Bears can party if the same is breached on a closing basis.
Cheers
Hrishi
Saturday, August 8, 2015
FNO lot sizes revised...
SEBI revises the market lot and minimum lot value criteria.
Minimum lot value revised to 5 lac. Minimum lot size for stocks reduced to 50 and in multiple of 25 there after.
For high value stocks minimum lot size fixed at 10 and multiple of 5.
Index minimum lot size fixed at 10 and multiple of 5 there after
At current nifty value of appx 8500. New Nifty index lot will be 60.
Bank nifty will be 30...applicable from
Oct expiry ..
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1436782665000.pdf
Friday, August 7, 2015
How to Select a Fundamentally sound company......
Tuesday, August 4, 2015
And the God opens a Dmat Account ! ! !.. Why are you waiting.
Considered the first globally for a shrine management, Tirumala Tirupati Devasthanams (TTD) has opened demat account (1601010000384828) with the Stock Holding Corporation of India.
PS Reddy, MD and CEO of Central Depositories Service (CDSL), told ET that the innovative move by TTD was primarily aimed at addressing the hassles pertaining to transferring the physical share certificates. "TTD has been receiving physical share certificates as donations by devotees in its open Hundi, which indicates that devotees are interested in donating shares.
TTD viewed that enabling devotees to use the demat account for donations helps both." Reddy said though TTD is the first shrine management in the country till date to open a demat account, CDSL would explore similar interest from other temple managements in other parts of the country that were receiving shares as donations.
While acknowledging that the temple has been receiving thousands of share certificates valuing lakhs of rupees, a TTD top official, however, refused to divulge details on the quantum and value of shares received so far.
Monday, August 3, 2015
A must read for a trader....
One Saturday morning, while he was sitting at his computer studying the market, David's 7 year old daughter came up, tugged at his shirt sleeve, and said, "Daddy, why aren't we rich?"
He looked his child in the eye, and thought to himself, what a great question - why aren't we rich?
As she stood there expectantly waiting for an answer, he struggled to come to grips with the realization that, although he had focused his undivided attention on nothing but creating wealth for more than 15 years, he was still broke.
He had bought and sold hundreds of Stocks and several properties over those years, but had never made any real money to speak of.
He looked at his daughter, and asked, “What makes you think we aren't rich, sweetheart?”
She looked at him sternly and said, “Because you said that if we were rich, you and mom wouldn't have to go to work any more, and you both still work all the time.
You said we could live near the beach and play in the sand every day. I want to know what you are doing about that. When can we go and live at the beach?”
There’s nothing like a child to cut straight to the heart of the problem - and what was he doing about it?
“We're not rich because daddy made some mistakes,” he finally answered.
“What kind of mistakes, daddy?” she asked.
“Well, I bought some shares that were going down and then didn't sell them soon enough. Then I bought some houses but sold them again just before they went up in price.”
“Why did you do that?” she asked.
He had to think long and hard about that. He had no reason to buy shares that were going down in the first place. He had no reason to hold on to them when they kept going down. He had no reason to sell the properties either, come to think of it.
Her logic was flawless – why wasn’t he doing better financially than he was?
He knew in that moment that he had to change his strategy.
He owed it to himself and his family to finally get his act together and make some changes - that was the day the pain of not living up to his potential made him sit down and write out his stock market trading plan...his trading strategy and rules – he had to have a life raft.
He started by writing out his vision - what he wanted his life to look like when he became a successful trader and investor, then worked backwards from there - through the details of how he was going to achieve his dream.
He saw in his mind the 4 bedroom penthouse on the beach, the red Ferrari 360 Modena, the 80 inch plasma screen computer monitor in an office overlooking the surf beach 17 floors below, the family holidays, the million dollar donations to worthwhile causes and children's charities.
He visualized all the tremendous benefits of becoming a successful trader, investor and philanthropist.
He realized that his main problem all this time had been that he was afraid of losing, and that fear was just too expensive to let it control his life any longer! He had been playing not to lose, instead of playing to win.
He decided he would never again sell a property unless there was a compelling reason to do so.
He decided that he would no longer accept anything less than perfect execution of his stock trading plan.
He decided that he would take every trade entry signal his system gave him and follow his trading plan as if his life depended on it.
As if, after each trade was closed out, he had to stand in front of a panel of super traders, and explain his actions to them - why he entered where he did, where he placed his stop losses, why he exited when he did.
And if they weren't convinced he followed the rules of successful trading, he would be taken out and shot!
This certainly focused his attention on only trading strong trends - trends where the price bars were trading above their respective moving averages for long trades, or below for the moving averages for short trades, and the Stock price was moving strongly in one direction.
He pretended that if he couldn't justify his trading decisions to his trading Mentors, he was dead...
That was the day he resolved to study his selected group of Stocks, the ones that had a track record of trending strongly, every day.
He would then take every trade his system produced, put his stop loss orders in the market as he entered each trade it a place where the trend had to change to take him out of the market, and he would hold every position until the trend changed.
He would act 'as if' he was a great trader, even though his record up to that point had been less than inspiring...
That innocent question from a child turned out to be the start of David's successful trading career.
He started to trade profitably and consistently for the first time in his life. He thought he was doing well, and indeed he was making money.
He knew from his wealthy mentors that rich people are different; they make rational decisions based on facts, not emotions.
They understand the value of money - they respect it as a tool for building a better world. They buy well for logical reasons and hold until there is a valid reason to sell.
Then one day, he closed out a trade, and excitedly told his daughter, “Daddy made a big profit in the market today darling, come and look and see what I did.”
His daughter came over to the computer and looked at the screen as he excitedly showed her where he had bought a Stock and then sold for a $13000 profit. She looked at him and said, “But daddy, it's still going up, why did you sell now?”
His smile faded as the power of that question sunk in...why had he sold it?
What was he doing getting out of such a strong trend just to take a profit? What would his trading Mentors say?
She was right...the market was still open, so he bought back in again. He had never been able to bring himself to do that before - he was becoming a great trader!
The rally continued and he kept buying more as it rallied. The trend finally changed, but his profit on that trade, when he eventually got a valid sell signal, was $34500!
His daughter's simple, logical question 5 weeks earlier had been worth over $20000!
That was the last time he ever got out of a trade based on his emotions. His fear of the market was gone - thanks to some simple questions from a 7 year old...
So now, it's your turn.
Whenever you are preparing to place a trade, find a small child, even if you have to borrow one, and ask them what the trend is. Then don't trade the other way!
If your trading isn't as great as you know it could be, decide to create a trading plan now that will become your life raft.
Remember, fear is just too expensive folks.
If you are afraid of losing money, reduce your position size until your fear goes away.
Once you have made a series of small profits, you will be trading with the markets money and you can increase you position size according to your growing confidence and account balance.
If you have a series of losses, reduce your position size again until you get back on the right track. Stick to your trading plan once you have something that works consistently.
Then, just go out and do!!