Nifty Market Analysis – 10.01.2019

Nifty Market Analysis – 10.01.2019

“The market is a pendulum that swings between unsustainable optimism and unjustified pessimism.” – Jason Zweig

This quote makes complete sense to traders who participated in the last four trading sessions.

With the NIFTY 50 swinging wildly within a range of about 300 points it has settled at 12,215.40 on options expiry day, today. Many gaps (or windows) have been formed which are sure to look out for and calibrate zones of support and resistance accordingly, as gaps act as support and resistance zones. 

In light of this given below is an analysis of Hindustan Unilever Limited. The current market price is 1935.05 and a bullish divergence can be observed on RSI.

The 14 periods RSI has made higher highs and higher lows while the stock had made lower lows and lower highs. Interestingly, the stock is also hovering around its support zone.

One can accumulate this quality stock and add a gem to his portfolio. Stop-loss – 1900. Target – 2090

Happy Trading

Satyarth Grover

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No Intraday Trading? Higher Margins?

No Intraday Trading? Higher Margins?

In the course of the most recent a year, SEBI has been getting numerous extra rules and regulations that defend retail customers from any potential financial fraud at a brokerage firm. In this procedure, numerous ambiguities in prior handouts are additionally being gotten out. While the sum total of what these have been very hard on the brokerage business in the short term, I think it is useful for the biological system over the long haul.

The latest round from SEBI was on margin necessity when purchasing or selling stocks.

NSE and BSE have both quite recently put out rules and explanations on margin assortment and revealing with regards to this SEBI circular.

Fundamentally, the explanation says that the whole starting margin — which is SPAN+Exposure for F&O, and VAR+ELM for value, must be gathered forthright before taking a trade, regardless of whether it is an intraday trade (MIS, BO, and CO). These kinds of intraday items were being offered with extra margin by the whole broking industry up to this point. This should quit going ahead.

What changes?

This implies, for a stock like Reliance, you would require VAR+ELM margin (12.5%) to take a trade. Henceforth the greatest intraday margin that can be given by any representative is this prerequisite of 12.5% or multiple times.

Going ahead, for all intraday item types — MIS, BO, CO Trades, the margin will be similar which is the VAR+ELM margin. Nothing changes for CNC or equity delivery trades that will require full funds in the trading account before putting in a purchase request or having protections in your Demat account before submitting a sell request.

Likewise, to trade 1 parcel of NIFTY prospects, you would require the whole SPAN+Exposure margin = 11.5% = Rs 1.04 Lakhs to take a trade. Furthermore, similar to I referenced before, the margin necessity will continue as before regardless of whether you utilized intraday item types like MIS/BO/CO. Check our margin number cruncher to see the SPAN +Exposure margin which we additionally call as NRML margin or Initial Margin.

While the minimum VAR+ELM requirement for stocks is new, the additional intraday leverage that all brokerage firms offered for F&O was due to the ambiguity on margin reporting which existed. Trades charge a penalty if there is no minimum SPAN+Exposure present in a client account at the end of the trading day when margins are reported. Since all reporting was done on an end-of-day basis, if brokers did offer higher intraday leverages, it wasn’t reported as long as positions were closed. Thus, there was no penalty and the client who would switch the brokerage firm just based on leverage was happy too. With this clarification, it is now black and white. No broker will be able to offer any additional intraday leverage on F&O. 

Who and how does it affect?\

Dealers who needed that extra margin for intraday are the ones who will be influenced the most however decidedly or adversely is far from being obviously true.

While indeed, every intraday trader is interested in higher-margin to acquire more. Higher the margin, higher the possibility of frenzy when Trades conflict with you, and higher the chances of losing.

What next?

In view of this explanation from the exchanges, we will alter the leverages on all our intraday items. MIS/BO/CO for value will require the VAR+ELM edge and MIS/BO/CO for F&O will require the SPAN+Exposure (NRML) edge.

A safe, secure and sound opportunity.

A safe, secure and sound opportunity.

With the NIFTY 50 closing at 12,226.65 on Friday, 3rd January one can conveniently say that a structural bull run in underway. However, the P/E ratio (Price to Earnings ratio) stands at 28.44 which is certainly no good news and an investor would have a reason to worry.    In this article of Sunday analysis we have presented below a stock – LIC Housing Finance which seems a good pick not only from technical outlook but is also a value buy.   

The P/E ratio stands at a lucrative figure of 8.27 and the company has recorded a growth in EPS of 15.75% p.a. from 2012-2019. The stock has come down to a multi-year support level and in September – October 2019 formed an inverse head and shoulders pattern to reverse its a downtrend.

A rising trend line has emerged which can be seen on the chart presented alongside. Longs can be initiated with a definitive stop loss of 430 and a target of 469. The current market price stands at 439.4. The risk-reward ratio is approximately 1:3.

Disclaimer: We have provided this information to traders and investors for educational purposes only. It is neither a legal interpretation nor a statement of SEBI policy. Before making any investment or trading decision it is advised to consult with your financial advisor.

To learn about the market; How to invest or trade in the stock market? click here.


Happy trading!  
Satyarth Grover.

Add this stock to be part of the current bull run

Add this stock to be part of the current bull run

With NIFTY 50 settling down at 12,282.2 and the Sensex at 41,626.64 it seems like January 2020 will belong to the bulls. Many people might think that they are late for the party and would like to extract some nectar out of this market at this stage.   In light of this, presented below is the analysis of Tech Mahindra. With a closing price of 766.05 on 2nd January, an upward sloping channel can be seen on daily charts. Longs can be initiated with a stop loss of 760 and an upside target of 784. The risk-reward ratio would be 1:3.  
Disclaimer: We have provided this information to traders and investors for educational purposes only. It is neither a legal interpretation nor a statement of SEBI policy. Before making any investment or trading decision it is advised to consult with your financial advisor.
Happy trading!
Satyarth Grover

Nifty Daily Analysis 1.1.2020

Nifty Daily Analysis 1.1.2020

With the Nifty settling down at 12,182.5, the structural bull run is likely to occur in the first quarter of this year 2020. The index seems overvalued by many market participants and quick pick seems a slightly tough task.   In light of this, we can check up this stock of the pharmaceutical sector – Aurobindo Pharma. On 1st January it closed at 458.1 and seems to be testing its trend line. It has reversed its long term downtrend with conviction in November 2019 and a strong support zone is established at 425-430. Longs can be initiated with a target price of 470 and a definitive stop loss of 454. The risk-reward ratio of this trade is approximately 1:3  

Disclaimer: We have provided this information to Traders and investors for education purposes only. It is neither a legal interpretation nor a statement of SEBI policy. Before making any investment or trading decision is it advised to consult your financial advisor.

Happy Trading!

Satyarth Grover.

Is State Bank of India ( NSE: SBIN) a good buy? Daily nifty Analysis 30.12.2019

Is State Bank of India ( NSE: SBIN) a good buy? Daily nifty Analysis 30.12.2019

The share market seems to be at zones that people consider too risky or too expensive to enter and with NIFTY 50 hovering near it’s all time high of 12,287.15 avid investors are looking for opportunities to gain from. Given below is the technical analysis of State Bank of India (abbreviated as SBI) -The SBI share price settled at 334.40 after the market session that ended on Monday.

After a reversal in trend and experiencing the beginning phase of the bullish rally, there occurred a runaway gap on 13th December, 2019. The runaway gap is acting as a crucial support and probably would not get filled. In light of a rising trend line and a decisive gap one can take initiate long positions in SBI, the entry price being 329-331.

Furthermore, Investors can target levels of 350 with a definitive stop loss of 324.

Disclaimer: We have provided this information to Traders and investors for education purposes only. It is neither a legal interpretation nor a statement of SEBI policy. Before making any investment or trading decision is it advised to consult your financial advisor.

For any questions related to investment or Stock Market course, Click here.

Also, The first batch date is 4th January 2020. Admissions open.

For all the newbies in the stock market, ISM is offering 20% on the star trader course. We wish you a very happy new year.

Happy Trading!

Satyarth Grover  

Sit tight to witness new highs in this NIFTY bull run! Weekly analysis 28.12.2019

Sit tight to witness new highs in this NIFTY bull run! Weekly analysis 28.12.2019

After a truncated week Nifty was able to close on a positive note this Friday and proved the significance of resistance and support zones. In this classic live example, we have role reversal at play. Resistance has become support. A zone as narrow as only two points viz. 12157-12159 has acted in a crucial manner and we can see an accelerated trend line emerge on the NIFTY chart.

It must, however, be noted that this trend line has not been tested and shall be validated only in the near future.    For traders, who are trying to short the market based on oscillatory analysis will not prove fruitful in upcoming trading sessions. Zones to look out for would be 12290-12300. NIFTY is likely to make a new high this time and a hedged position with a bullish point of view will help in netting profits. Stop loss would be 12155. 

Disclaimer: We have provided this information to Traders and investors for education purposes only. It is neither a legal interpretation nor a statement of SEBI policy. Before making any investment or trading decision is it advised to consult your financial advisor.

Happy Trading!

Satyarth Grover

‘What is the horsepower of this auto sector share’? Nifty Daily Analysis -26.12.2019

‘What is the horsepower of this auto sector share’ ? Nifty Daily Analysis -26.12.2019

After reaching an all-time high of 12,287.15, Nifty may be witnessing a slight correction and would possibly then continue its bull run. It would not be a good idea to short the market as an uptrend is still in function. According to Dow theory, “A trend is assumed to be in effect until it gives definite signals that it has reversed.”

In light of this, given below is a technical analysis of the script Mahindra and Mahindra (abbreviated as M&M). After being in a downtrend since September 2018 it reversed it’s a trend and ended the jinx in September 2019 by forming a reverse head and shoulder pattern and broke the trend line with heavy thrust.

However, after establishing a strong support zone at 500-505 (500 being a psychological level also) the stock revisited it in the first half of December 2019. The support zone was confirmed and after heavy pressure, the price has consolidated and has formed what can be called a bullish ‘pennant’.

The script closed today (i.e. Thursday) at 528.35. Longs can be initiated with a definitive stop loss of 520-521 and we may see the buyer’s pushing this stock up to levels of 555-560. The risk-reward ratio would be approximately 1:4.


Disclaimer: This post is only for educational and tutorial purposes. Please do not consider it a trading recommendation.


Happy trading,

Satyarth Grover

What happened here in this chart? Is it a Stock Crash? Payout? Read More

What happened here in this chart? Is it a Stock Crash? Payout? Read More

By looking at the chart, what seems in the first look that there has been a major crash. The portfolio is down by almost 70%.

Now, what could possibly cause this in just one day?

This usually happens when there is a crash, payout or the holdings have been converted into cash. However, this is altogether different.

As an Individual investor or a trader, this could be shocking or if not at least a little complicated at first. Let us explain, what just happened here.

Let’s simplify now, A great proportion of the fund was allocated to nifty bees. Let’s have a look at the notes.

Note:-

i.                     The Below Mutual Funds Units will be Traded with new Face Value of Re.1/- w.e.f. December 19, 2019 (DR -178/2019-2020)

ii.                    The new ISIN number as given above shall be effective for all trades done on and from the Ex-Date i.e. December 19, 2019

Let’s understand first

What are Nifty Bees?

Nifty BeES (Benchmark Exchange Traded Scheme)—the first exchange-traded fund (ETF) in India—seeks to provide investment returns that closely correspond to the total returns of securities as represented by the S&P CNX Nifty Index. … Nifty BeES is a no-load scheme.

SCHEME NAME CODE/ Old ISINRECORD DATEPURPOSENew ISIN
NIPPON INDIA ETF GOLD BEES(Scrip Code 590095)INF732E0110220/12/2019Split of each unit of Rs.100/- to Re.1/-INF204KB17I5 
NIPPON INDIA ETF NIFTY BEES(Scrip Code 590103)INF732E0101120/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB14I2 
NIPPON INDIA ETF BANK BEES (Scrip Code 590106)INF732E0107820/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB15I9
NIPPON INDIA ETF PSU BANK BEES(Scrip Code 590108)INF732E0111020/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB16I7
NIPPON INDIA ETF HANG SENG BEES(Scrip Code 590113)INF732E0122720/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB19I1

What is a stock split?

All publicly-traded corporations have a fixed number of stocks that are extremely good. A stock split is a decision with the aid of a company’s board of administrators to growth the variety of shares that are first rate through issuing more stocks to cutting-edge shareholders.

Why Do Stocks Split?

stock break up is typically finished by agencies that have seen their share price boom to tiers which might be both too excessive or are past the charge tiers of similar agencies of their sector. The number one purpose is to make shares seem more affordable to small investors despite the fact that the underlying value of the enterprise has now not changed.

This has the practical effect of growing liquidity within the stock. When a stock splits, it could also bring about a share fee growth following a decrease immediately after the breakup. Since many small investors think the stock is now less costly and buy the stock, they come to be boosting demand and force up prices. Another cause for the price boom is that a stock break up gives a sign to the marketplace that the agency‘s share charge has been growing and people count on this increase will continue within the future, and again, lift call for and prices.

Are you smarter than a Monkey?

Are you smarter than a Monkey?

The normal hedge fund has delivered a more awful investment execution in the principal half of this current year than a portfolio comprising of a bank account at your nearby bank and an irregular assortment of stocks picked by a blindfolded monkey.

This asks the conspicuous question— for what reason would we say we are paying fund managers so much when that money ought to clearly be going monkeys?

All things considered, we should check whether some other creatures can beat the market!

The top 10% of stocks in the S&P500 contribute practically half of the general index. These enormous stocks will, in general, have returns which are far less factor or volatile than little stocks, which makes the littler stocks more dangerous. Most speculators don’t particularly prefer to have hazardous stocks, so to remunerate the financial specialists who do get them, these stocks need to offer more significant yields. This is seen experimentally, as somewhere in the range of 1980 and 2015, littler stocks returned 11.25% yearly development by and large, while enormous stocks returned 8.1.0%.

So when our creature companions pick a random portfolio, they are choosing a disproportionally high number of little stocks which helps the portfolio’s return contrasted with the S&P500, while likewise including a great deal of risk, something creatures forgot to specify. So while a random portfolio picked by a Monkey/goldfish/feline/rodent offers significant yields, its return for the degree of risk taken is probably not going to be ideal.

You can play around with simple portfolios but this will do as well as any. It’s about as simple as you can get.