Sunday, July 6, 2014

May Picks


On 18th May I had these picks. Above is a screenshot of the actual post. The first two have done very well. Below is how these stocks look now:




Friday, July 4, 2014

Grand Pullback


After I closed my bull spread, the market took support around the previous gap area and started pulling back up. I think there were lot of shorts around the gap area and they got trapped. Now on Monday, I can again think of setting up a long spread.

Bull Spread ... Contd


Nifty was not able to come up above 7735 and I closed my bull spread at almost zero damage as soon as PDC was broken. I'm not at all comfortable to sit and hang on to a losing position. I will have to take a fresh call on Monday. 

Thursday, July 3, 2014

Nifty High Low Range


This plot shows the high low range of Nifty since 2012 to date. Notice the peaks in August 2013 and the recent one in May 2014. Things have cooled down now and the HLR reading is just over the 60 mark as of today. This metric is different than the ATR which takes opening gaps into its calculation. This one is purely the daily range smoothed by a ten day average. I use it as a proxy for volatility. Secondly, it gives an idea for intraday traders - more is better for them. At 60 points a day this range is tradable but things can become difficult if you have a 40 pointer range. 


Bull Spread... Contd


I was able to set up a bull spread for a debit of 50. One advantage of a spread is that it can partly pay for your position. If you were to only buy a naked call then it will cost 185 but since you are shorting the higher strike at 135, the total cost of the spread drops to 50. The flip side is that you profits are limited.

Wednesday, July 2, 2014

Bull Spread


Nifty has broken out of the range and now one can do a moderately bullish strategy like say a  debit Call Bull vertical spread by buying a lower strike July Call and selling a higher strike July Call. The strikes can be decided after the market opens tomorrow but they can be like a combo of say a 7800 / 7700 or a 7700 / 7600 spread. 

Recent SPMM Picks


These were the picks for SPMM on June 1. I've been tracking all the top stocks from my ABC screens and many of the leading stocks were suggested every now and then to SPMM members. Below is an updated screen A showing the top 25 stocks:



Friday, June 27, 2014

Tuesday, June 24, 2014

Breadth


Here's an updated plot of the advance decline ratio. Below we zoom in to the recent action from April:


You can see a classic negative divergence here - prices making higher highs but the a/d is dropping. In spite of this there was no major damage to the price and as we all know it has been trading in a 200 odd point range for quite some time now.