Nifty 29-03-2016

Nifty 24-03-2016

Nifty intra day update 23-03-2016

Nifty intra day update:
Nifty seems to be doing a FLAT correction from
7713-7644 = a
7644-7727 = b
7727-76xx = c

This view gets negated with a move above 7727 or a deep correction beyond 7540.

I'm planning to take a long position
1. A move past 7730 OR
2. Near 7640 with 20 points SL.

Nifty spot 5 min chart that I'm tracking:

Nifty 22-03-2016

Today I exited the position that I have taken yesteday @ the break of the channel (upper line). The idea was that 5 minor Elliott waves were observed clearly and the next leg will be a correction, once the correction is complete then re-enter the trade. Although my exit point was not correct, it should have been near the target 7713, the circled area instead of the actual exit 7679 as marked in the chart.

I was not able to enter the long position as marked in the chart. Now again to enter the long I have to wait for a minor correction and once it completes I'll observe the depth of the correction and then take a call either to enter the long or wait or to re-look into the situation and consider a short. This can be done during the market tomorrow.

Nifty 5 min chart:

Nifty 21-03-2016

Trend was up as NS (Nifty Spot) was above DHema. NS made a high in the morning near 7662 and corrected in an a-b-c form within a channel. Around 1:45pm market completed the correction and started the move up. The whole thing appears like the impulse with 1-2-3-4 are done and 5th is pending. The complete move is started from 7480 area. If wave 5 = wave 1 then this may move up to 7627 + (7566-7480) = 7713.

I have entered the trade near 7651 after the NS broke the line connecting the top of 3rd wave and the top of wave 'b'. Ideally I should have entered near the channel bottom near 7630 area with a smaller stop loss. This should have allowed me to take higher quantity compared to my actual entry point where my SL has to be big. Hence this reduced the number of quantity that I could buy.

This is in continuation with the weekend post "How not to trade"

Nifty 5 min chart :

It is observed that at the end of the day the target for the 5th was achieved. Hence the trade should have been closed. However the stop loss was on trailing basis and market has not yet come down from the top before the close. Hence the trade was not closed. Long is carry forward to the next day. Elliott wave observation perspective this is not a wise move as the 5th was over unless it is going to be sub-dividing. (the bigger 3rd wave is still on, if this minor 5 waves are done, then at the maximum the correction might go near 80 points - bigger than the two corrections which are part of the just concluded 5 waves 40 & 35. )

Biocon 18-03-2016

Biocon broke the upper trend line as observed a month ago and moved up in 5 waves to get reflected from the reflection point. Now it is making a correction. Once this correction ends, it may move up again. Will that be 3rd wave? Let us wait and watch.

TCS -18-03-2016 daily chart

TCS made a nice move crossing the upper trendline and closing above it on a weekly basis since we last visited it a month ago. So far it is positive.

How not to trade

Following is the actual trading journal for the week of March 14-18, 2016.

1. Green indicates long entry. Number '1' indicates this is the 1st order for the week/day. 7562 is Nifty sport price at the time of entry. 'B' indicates it is Buy. Green also indicates Buy.
2. Red indicates it is a Sell. 'S' indicates it is a Sell.
3.  Vertical line indicates the start and end period of the day.
4.   Indicates the DLema for the day.
5. DHema for the day.

My goal with this chart is to analyse the trades visually and take a note of all the errors. This should help me to improve myself over a period of time.

To increase the success in trading :
1. Reduce the no. of errors
2. Gain insight into the market

To better #1, there are two ways to achieve it.One is to reduce the overall number of trades and the other is to reduce the number of wrong trades. This will invariably increase the number of successful trades. One has to sit patiently and wait for a good risk reward trade to appear on the screen.  For this one need to gain more insight into the market movement and analyse it with a technical analysts eye.

For ex: In the below chart we can see
1. When the market 7553 DHema on 14th, the next day all rise should be used to sell Nifty as long as it stays below DHema with DHema as the SL or 20 point as SL. (This is strictly for intraday, for carrying this short into next day market has to move below DLema and close below it.)
2. Another low risk entry point was when Nifty moved below DLema-30 near 7405 area. Enter long with 30 points as SL. This was moving back above DLema and closing above it. This will eventually go above DHema. So wait for it.

On the lighter side, If I had just reversed the color of my trade entries from green to red then I would have just achieved spectacular profit :-)

Please note: None of these are any recommendations. They are just learning's and notes from my observations.

Lupin daily 19-03-2016 Elliott Wave

Lupin after the sharp down move of over 320 point in last few days, is it going down further?

One possibility is that Lupin has completed a FLAT correction which has started from 8th of April 2015 @ 2115 is ending at the low of 1535. Or some more down move is pending which may take it further to 1490 region which acted as resistance during the 2014 December move or 1300.

Lupin daily chart is below:

50 Unfortunate Truths

1. Saying "I'll be greedy when others are fearful" is much easier than actually doing it.

2. The gulf between a great company and a great investment can be extraordinary.

3. Markets go through at least one big pullback every year, and one massive one every decade. Get used to it. It's just what they do.

4. There is virtually no accountability in the financial pundit arena. People who have been wrong about everything for years still draw crowds.

5. As Erik Falkenstein says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."

6. There are tens of thousands of professional money managers. Statistically, a handful of them have been successful by pure chance. Which ones? I don't know, but I bet a few are famous.

7. On that note, some investors who we call "legendary" have barely, if at all, beaten an index fund over their careers. On Wall Street, big wealth isn't indicative of big returns. 

8. During recessions, elections, and Federal Reserve policy meetings, people become unshakably certain about things they know nothing about.

9. The more comfortable an investment feels, the more likely you are to be slaughtered.

10. Time-saving tip: Instead of trading penny stocks, just light your money on fire. Same for leveraged ETFs.

11. Not a single person in the world knows what the market will do in the short run. End of story.

12. The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn't -- his are much bigger.

13. You don't understand a big bank's balance sheet. The people running the place and their accountants don't, either.

14. There will be seven to 10 recessions over the next 50 years. Don't act surprised when they come.

15. Thirty years ago, there was one hour of market TV per day. Today there's upwards of 18 hours. What changed isn't the volume of news, but the volume of drivel. 

16. Warren Buffett's best returns were achieved when markets were much less competitive. It's doubtful anyone will ever match his 50-year record.

17. Most of what is taught about investing in school is theoretical nonsense. There are very few rich professors.

18. The more someone is on TV, the less likely his or her predictions are to come true. (U.C. Berkeley psychologist Phil Tetlock has data on this).

19. Related: Trust no one who is on CNBC more than twice a week.

20. The market doesn't care how much you paid for a stock. Or your house. Or what you think is a "fair" price.

21. The majority of market news is not only useless, but also harmful to your financial health.

22. Professional investors have better information and faster computers than you do. You will never beat them short-term trading. Don't even try. 

23. How much experience a money manager has doesn't tell you much. You can underperform the market for an entire career. And many have.

24. The decline of trading costs is one of the worst things to happen to investors, as it made frequent trading possible. High transaction costs used to cause people to think hard before they acted.

25. Professional investing is one of the hardest careers to succeed at, but it has low barriers to entry and requires no credentials. That creates legions of "experts" who have no idea what they are doing. People forget this because it doesn't apply to many other fields.

26. Most IPOs will burn you. People with more information than you have want to sell. Think about that.

27. When someone mentions charts, moving averages, head-and-shoulders patterns, or resistance levels, walk away.

28. The phrase "double-dip recession" was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of "financial collapse" in 2006 and 2007. It did come.

29. The real interest rate on 20-year Treasuries is negative, and investors are plowing money into them. Fear can be a much stronger force than arithmetic.

30. The book Where Are the Customers' Yachts? was written in 1940, and most still haven't figured out that financial advisors don't have their best interest at heart.

31. The low-cost index fund is one of the most useful financial inventions in history. Boring but beautiful. 

32. The best investors in the world have more of an edge in psychology than in finance.

33. What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.

34. For most, finding ways to save more money is more important than finding great investments.

35. If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest. 

36. A large portion of share buybacks are just offsetting shares issued to management as compensation. Managers still tout the buybacks as "returning money to shareholders."

37. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are high.

38. Twenty years from now the S&P 500 (INDEX: ^GSPC  ) will look nothing like it does today. Companies die and new ones emerge.

39. Twelve years ago General Motors (NYSE: GM  ) was on top of the world and Apple(Nasdaq: AAPL  ) was laughed at. A similar shift will occur over the next decade, but no one knows to what companies.

40. Most would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president and focused on their own financial mismanagement. 

41. For many, a house is a large liability masquerading as a safe asset.

42. The president has much less influence over the economy than people think.

43. However much money you think you'll need for retirement, double it. Now you're closer to reality.

44. The next recession is never like the last one. 

45. Remember what Buffett says about progress: "First come the innovators, then come the imitators, then come the idiots."

46. And what Mark Twain says about truth: "A lie can travel halfway around the world while truth is putting on its shoes."

47. And what Marty Whitman says about information: "Rarely do more than three or four variables really count. Everything else is noise."

48. The bigger a merger is, the higher the odds it will be a flop. CEOs love empire-building by overpaying for companies.

49. Investments that offer little upside and big downside outnumber those with the opposite characteristics at least 10-to-1.

50. The most boring companies -- toothpaste, food, bolts -- can make some of the best long-term investments. 

*** I'm not the original author of this collection. I have received it via email and sharing it here for others use.