Wednesday, 30 September 2015

A qucik note

Technically speaking, governor's surprise announcement on the rate cut, hasn't changed the charts much. Nifty likely to continue zig zag moves in the session ahead. The rate cut would give us a positive impact on the longer run.
Safe Investing!

Monday, 28 September 2015

Are we still in the correction phase?

Bottom Line: We are in last leg of the first correction of our multi month Bull Run. We will not enter Bear trajectory until Nifty breaches and close below 6580 for three consecutive days.

Good Morning!

Let us look at the Nifty chart first on a larger time frame before we proceed on in understanding what is going to happen in the next 2-3 days. Let us look at the main picture first.



Looking at the main picture, it is very clear that we are still in the final leg of this correction. This could take more time before we break out of this correction. The reason why it is taking more time in getting us out of the correction zone is very simple; this correction is actually an accumulation phase.

Looking very closely at the stocks of the broader market, one can understand one thing that people are accumulating good stocks on a daily basis taking leverage of the ongoing correction that we are witnessing. Though the broader markets may be moving down with each passing day, we find good stocks which could move up once the markets turn up are finding more accumulation rather than distribution, which we usually see in any correction phase. In short we find smart money moving from the not so fundamentally strong stocks to that of fundamentally strong stocks.



Looking at a minor time frame of Nifty chart, one thing is for sure that this zig zag move would continue further and this will take even more time than what we were even thinking of. Technically speaking on the technical parameters of this daily chart one could observer, as we have indicated earlier this month, the RSI really did turn down after hitting the 50 mark and on the MACD indicator it is giving a kind of convergence and it could turn down very soon starting a new sell off.

The immediate targets that I am looking out for on the Nifty, on the downside is 7540 and 7460. These are the two levels that we are keenly watching out on the downside. At the same time we are looking out for 8100 on the upside. This zig zag zone could probably drag Nifty further down in the next two sessions. Especially having Governor’s action round the corner, I strongly feel that nifty has more potential to move downwards.

Considering all these, I suggest rather than betting on the zig zag moves, to start accumulating stocks which are really really strong and wait patiently for the correction to wind up. Once we start moving on the upside, we could gain wealth many times over investment. Once the correction ends, the target that I am looking for on nifty (on the upside) is around 14,000. This means that real good stocks could fetch you 5-6 times of what you have invested over the next couple of years. So be patient, start accumulating very good stocks rather than falling prey to this zig zag move of Nifty. Stay invested, be patient and enjoy the fruits of the markets.

The trends for the day.

Long term Trend: Correction to the ongoing Bull Run. As long as we hold on to 6580 we will not turn negative on the long term view of Bull that we hold.

Intermediate term Trend: Trending on the downside with immediate supports at 7540 and 7460.

Short term Trend: Trending Down. The trend will not change until we close above 8100, which means 8100 would act as SL for those who are short in Nifty.


Thank you!

Regular updates coming up from tonight

Dear All,

It has been a testing month for me and dalal times as a team. We at dalal times face challenges that any other startup would face. This has made me not overlooking the blog. I understand the faith and trust that you have kept on me and my team. I sincerely apologies for the non updation of this blog and not answering the queries. I will resume blogging from tonight and try to answer all pending queries by tomorrow.

Once again a sincere apologies.

Regards,
Praveen Pathiyil 

Tuesday, 8 September 2015

Nifty up 130 points, is correction over?

Bottom Line: We are in last leg of the first correction of our multi month Bull Run. We will not enter Bear trajectory until Nifty breaches and close below 6580 for three consecutive days.

Good Morning!

It has been a great day for the bulls yesterday, with no bears hardly found on the trading floor. The question is, 'is this the start of the next leg up?' This can only be answered by looking into the major time frame chart. Let us pull up the Nifty monthly chart to understand where we stand.



Looking at the chart, it is clear that the up move of 130 points that we saw yesterday hardly had impacted the ongoing correction. The chart shows more downside to come in coming weeks. From my experience my observation on RSI and its correlation with correction: "for a healthy new leg up, the correction has to end up when RSI settles down in between the range of 50 & 45. I have marked this in the above chart, and we can clearly see that there is still room for the downside. Also look at the MACD, there isn't any signs of bullishness yet. Bollinger bands are contracting, and by the time we end this correction phase, we will see a tighter band, making prices to hardly move within a congestion zone. Narrowing it down, Correction isn't over yet.

Now let us also check the daily chart of Nifty to understand how yesterday's ‘move up’ has impacted.



A little impact could be found. There isn't any drastic change that we could find. Look at the downward sloping trend line, Nifty hasn't answered to the resistance created by the gap down that we witnessed last month. RSI hovering around the oversold zone, yes this could be taken up as positive or negative and MACD still negative. Even if we find some follow up swings in todays trading session, unless we see some drastic reflection on the chart, I think this correction is still in place.

The trends for the day.

Long term Trend: Correction to the ongoing Bull Run. As long as we hold on to 6580 we will not turn negative on the long term view of Bull that we hold.

Intermediate term Trend: Trending Down, now the trend is in place.

Short term Trend: Trending Down. The trend will not change until we close above 8210, which means 8210 would act as SL for those who are short in Nifty.


Safe Investing!

Monday, 7 September 2015

Will this correction end at 7400?

Bottom Line: We are in last leg of the first correction of our multi month Bull Run. We will not enter Bear trajectory until Nifty breaches and close below 6580 for three consecutive days.

Good Morning!



I haven't been updating this blog for past few days, the reason was simple, I haven't seen something new in Nifty's chart. I am still holding the view that Nifty has to correct till 7400. 7460 and 7400 are two crucial support levels that I see in Nifty chart. Now the question for the day is: will 7400 hold? 

I am afraid to tell, looking at the chart, I see more correction to take place in Nifty. The ugly part is:

a) the next phase of correction below 7460 would be a dragging one

b) the time taken to move Nifty out this correction zone would be more than what we could anticipate.

Though these are my anticipations based on my experience, I could go wrong, and I have gone wrong many a times. The only person who can answer all our questions is Mr. Market. I am successful because Mr. Market gives us cues and I used to grab it in the right sense. As and when I see any changes in Nifty's chart, will keep you updated.

The good things are:

a) Bear's aren't participating (with same enthusiasm as the start) in the downfall for the past three day's indicating Bear's too do not have conviction that the correction would last longer. But this a cue that I get, Mr. Market always like to test the patience of both Bulls and Bears.

b) many good fundamentally and technically strong stocks are much cheaper than two month back, it's an opportunity to grab and make much faster money.

The trends for the day.

Long term Trend: Correction to the ongoing Bull Run. As long as we hold on to 6580 we will not turn negative on the long term view of Bull that we hold.

Intermediate term Trend: Trending Down, now the trend is in place.

Short term Trend: Trending Down. The trend will not change until we close above 8240, which means 8240 would act as SL for those who are short in Nifty.

Tomorrow will update Bank Nifty, if there isn't any major change in Nifty's Chart.


Safe Investing!

Thursday, 3 September 2015

Ask Pathiyil! My views on Tata Steel


Good Evening!

We have received a stock query from Mr. Hukumat Nathwani. He wants to know what are the prospects of Tata Steel?


Here is my view on Tata Steel.

Fundamentally and technically Tata Steel is looking weak. This is one of the stocks which I used to track very closely till a year back. I would like to highlight one important factor here, to my experience I have seen technical studies turn first followed by the fundamental factors; this is one of the reason why I focus more on technicals and not purely going by fundamentals. There is always a difference of opinion between technical analysts and fundamentalist on which one is supreme school of thought, however I believe to earn money from markets you should have through understanding of both the sciences.

Let’s get back to Tata Steel. During the month of May, 2014 when this stock broke out on the positive side, I considered it to be the best buy. However the beauty of technicals is this, it can only initiate a trend but if it has to be a good bet, it should be backed up by changes in fundamentals of the company. Tata Steel’s fundamentals failed to give a better picture and hence the stock turned bad during the month of December 2014. Now if you look at it, both fundamentals and technicals do not support to buy or hold on to this stock.



Technically, this stock might see a dead cat bounce towards 333, however if this happens this should be taken as an opportunity to exit. The reason is simple, if the technicals and fundamentals has to change for this company, it would take a minimum of 2 years and that is also not a definite thing to happen. Since we are in a multi month bull run, we have much better stocks to make money from the market.

On the pipeline for askpathiyil, we have a query on FT, IDFC and a list of portfolio. I will be answering by this weekend. If you have any stock query please write to me at askpathiyil@gmail.com


Thank you. Happy Learning!

Nifty's fall in place.

Bottom Line: We are in last leg of the first correction of our multi month Bull Run. We will not enter Bear trajectory until Nifty breaches and close below 6580 for three consecutive days.

Good Morning!



Am going to keep this short. Nifty’s price action suggests little more downside is on its way. However I was wrong in anticipating it to be a free fall towards 7400. Rather than a free fall we witness a zig zag fall in place for nifty. This shows how strong our ongoing multi month bull run is. 7400 is going to stay, and it would be interesting to watch out for how Bulls behave once hitting this level.

The trends for the day.

Long term Trend: Correction to the ongoing Bull Run. As long as we hold on to 6580 we will not turn negative on the long term view of Bull that we hold.

Intermediate term Trend: Trending Down. Looking at the trending pattern on the intermediate time scale, am not fully convinced the way it unfolds. Any positive move above yesterday’s high at 8044 will change the pattern back to neutral.

Short term Trend: Trending Down. The trend will not change until we close above 8200, which means 8200 would act as SL for those who are short in Nifty.

Stay tuned for tonight, as I answer some stock related questions that we have received for the section “ask Pathiyil”


Safe Investing!

Tuesday, 1 September 2015

Ask Pathiyil


Ask Pathiyil

We understand when it comes to investing in stock markets, there are always many questions in your mind to be answered.

When should I invest?
Which stock to buy?
When to exit?
What is the future prospects of a company?
and so on....

With these question in your mind, we have created this section exclusive for you. We are here to help you with answers for your questions. Use the contact me form on your left panel to ask question or write to us your question at askpathiyil@gmail.com

We would be happy to help you and share our wisdom.


Informed Investing!

Nifty 7400! Here we come....

Bottom Line: We are in last leg of the first correction of our multi month Bull Run. We will not enter Bear trajectory until Nifty breaches and close below 6580 for three consecutive days.


Good Morning!


What a start to the month of September. As expected Nifty has started to move towards 7400. We are looking for a firm support at the level of 7460. The question remains, is this good enough to hold for the multi month Bull Run on the larger time frame? With yesterday’s price action, the good news for the bears is the intermediate trend has turned negative. This will add more pressure for the last standing bulls (short term investors). Meanwhile, the psychology parameter which was bullish till Monday have also turned and it indicates a neutral view. If bears manage to close Nifty lower today, we could see fear creeping into the markets.

Technically Speaking, the inherent strength (marked by RSI) on all different time scales (daily, weekly and monthly) has more room to push prices on the downside. Looking at the RSI indicator on the monthly chart, I think the correction would end probably when RSI hits in between 45-50. I have seen this many a times that the correction on larger time scale ends exactly between these levels on RSI indicator. With expanding channels on the downside, which indicates more downside on the cards.

In short, hold on to the cash and as soon as our correction is over, we will have opportunities to enter into solid stocks which would fetch better returns than Nifty.

The trends for the day.

Long term Trend: Correction to the ongoing Bull Run. As long as we hold on to 6580 we will not turn negative on the long term view of Bull that we hold.

Intermediate term Trend: The trend which was neutral till day before yesterday has turned down (negative) with yesterday’s fall. However, intermediate trend on Nifty will not hold for the day as it needs one more day of negative close.

Short term Trend: Trending Down. The trend will not change until we close above 8240, which means 8240 would act as SL for those who are short in Nifty.

Safe Investing!