Contrarian investing using technical analysis


(krrish seth) #23

Sir,

i think 99% of the persons starting their journey in the stock market with speculation or trading and as per the stastics available the rate of success in trading is less than 5%. It’ll be greatest learning under your and some seniors guidance.

Hope we’ll become a better value investor.

Regards,


(abhishek dey) #24

@Mehnazfatima I feel this long term side of TA (Trendfollowing) is heavily ignored in India. A fundamentally good company doing well year on year will end up making higher highs on the chart. Whether one believes that News follows Price or that Fundamentals create Price action, the hard fact is that in favourable market conditions, prices of great companies do rise. How else does any investor ever hope to make money!
Thanks for starting this thread.
Btw how do you screen for stocks? Manually or using an Algo?


(abhishek dey) #25

My starting point for any trend is whether is follows the 10MMA rule or not. If I get confirmation with an Oscillator ( I use a 30 week ROC), I usually get in with small amounts and ladder up.


(Mehnazfatima) #26

Thats the reason I am reluctant to enter into a discussion on technicals…every technical analyst has his / her favourite technical set up / system with which he is comfortable
Additionally, every tech analyst has his favourite time frame…some prefer daily…some weekly charts and some prefer longer term charts…

and thirdly there is choice of indicators and the parameters of those indicators…again some tech anlysts prefer fast momentum indicators while some others prefer slower momentum indicators.

…its an unending debate as to which is better…the simple answer would be that which works particularly well for you is the best technical setup for you.


(Mehnazfatima) #27

Guys…the technical in respect of financials appear to be working well…banks such as Vijaya bank, PNB, Bank of baroda, Corporation bank, IFCI,etc are in uptrend. Quickly do research on the fundamentals of whichever banking stock you like and then invest in it…


(Rits) #28

Mehnaz Jee, Karnataka Bank appears better among the small banks…


(Mehnazfatima) #29

CYCLICAL TURNAROUND IN TEA SECTOR?

There is a lot of talk in investors circles about a possible cyclical turnaround in Tea sector. Even the mngt of Mcleod russel and Jayshree tea have said in a TV interview that the next 3-4 years are going to be good for the tea sector.

I am posting the chart of the stock - Mcleod russel which clearly shows signs of turnaround…those interested in cyclical turnarounds may consider having a deeper look at the tea sector and enlighten us with their findings…

DISCLOSURE: Not invested…don’t have any more funds to invest…fully invested elsewhere…


(eyesice) #30

@Mehnazfatima ji and others

I am very new to technical analysis but very much believe that its essential along with fundamentals for picking the right stocks. ICICI Bank seems to be forming a bullish divergence. Is this correct?


(eyesice) #31

Sunil Healthcare is forming a nice rounding bottom on weekly charts. With the current state of Pharma sector, can this stock prove to be a contrarian bet?


(Bheeshma Sanghani) #32

I saw a couple of hammers in there. You may want to look the daily and see whether any triangles and trendlines have been broken.


(Divyanshu Taneja) #33

Sir could u and @mehnazfatima share with us ur some of ur trading setups , rules ,hou to identify stocks for trading


(Divyanshu Taneja) #34

Sir means @bheeshma
Also request others to share and participate


(Bheeshma Sanghani) #35

request you to not call me sir :slight_smile:

I have read the following thread from top to bottom many times and you can find some good setups here.

Also you can read the old posts on TED. Many of our seniors post/posted there and you will find a wealth of info on technical setups.

I found the found Technical Analysis: The Complete Resource for Financial Market Technicians by Charles D. Kirkpatrick and Julie R. Dahlquist also very informative.

Also request you to go through the following post of mine :slight_smile:

Also ta can to some extent predict turning points but struggles with how far prices can go up or down. Considering thats where most of the money is made its difficult to classify ta as an investment tool.

I saw a movie called scully some weeks back and its a great analogy. Tom hanks is the pilot of a plane whose engine catches fire and he lands the plane sucessfully in the river saving everyone but the computer simulations say that he could have landed the plane safely on the airport. After a long drawn out case he proves all the computer simulations wrong. Human judgement about a company cannot be replaced with lines on a chart. They are there in case u want inputs.

Best of luck @Divyanshu_Taneja!


(Divyanshu Taneja) #36

@bheeshma sir what are the ways, or idea through which we can identify on daily charts that today candle will going to be green or red, how to identify the colour of candle for upcoming day, ways other than candle stick pattern ,for day trading


(Bheeshma Sanghani) #37

If i knew that i would have retired already


(Hitesh Patel) #38

One of the lesser talked about stocks which previously was an investor darling has formed an interesting pattern. Hawkins cup and handle pattern on daily charts. Only problem with hawkins is that its a very illiquid stock and hence any whipsaw can take a weak hearted investor out of the position if he has one. disc: invested some time back around 2850 levels with 8% allocation. Thesis was that inspite of demonetisation company managed to avoid degrowth which is something which really attracted my attention. Valuationwise although its never cheap, its not very expensive if compared to its own historical valuations. Decent cash flows and dividend yield.


#39

Isn’t Cup and Handle valid only on an uptrend? Here the beginning of the cup around November was on a downtrend. Is this still valid?


(Hitesh Patel) #40

It has been described by different authors as reversal as well as continuation pattern. So applies to both trend reversal and continuation.


(Bheeshma Sanghani) #41

Hiteshbhai

I wanted to ask you why you invested at 2850 levels ? Was it because of the break of the minor downtrend on 14 march?

Sincerely
Bheeshma


(zulfiqar) #42

Hitesh sir what could be the possible upside in hawkins