Attaching an interesting chart showing a DARK CLOUD COVER candlestick in Laurus labs… (which I consider loss of momentum) One can google the pattern and see the details. The most important candle is the following candle post this pattern. 28th is the ex date for stock split and as seen in the past, stock split can cause some volatility in prices either way. I would be watching which way it goes.
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Hiteshbhai do you track kcp now? I suppose u were holding it before in your portfolio…at current price i feel its at a deep discount…cement capacity expanded to 4.3mtpa and once the cycle of cement sector turns can we see huge upside?
Do u feel cement sector can turn in next 2-3 yrs?
Disc-was already invested and also added position in the current fall
Rgds
Saumil
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@hitesh2710 hithesh sir,
one question about auto sector earlier u mentioned in this thread that timing of cyclical stock is very crucial . Do you think that auto sector is in the verge of recovery considering sales were almost to nil in previous months . I can see many auto ancillaries are showing Golden cross
Hitesh Ji - As per technicals, for the time being Laurus may correct. But Q2 results time is near and if Laurus comes out with blockbuster results, again it may run away. Also, markets always ahead of us. My question is - how far one can depend on technical analysis. Can charts catch the fundamentals of a company accurately? Thanks.
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Regarding the turning of cement cycle I wish I had the answer to the all important question. There are only two ways to play this kind of scenario. Buy in such a deep discount that even if the cycle does not turn for a long time, you do not suffer too much loss of capital . Or else buy when the cycle turns even if you have to pay a price 50-60% (or whatever level it is at when cycle turns) higher than the bottom price and try to make quick bucks by reducing the waiting period.
In cyclicals one has to be on top of the game and have access to monthly dispatch figures, demand scenario, supply side information etc and then only its possible to make decent amount of money consistently.
I for one do not have any idea about when the cycle is going to turn. But at some point of time, the charts will indicate by showing strength in these names. As of now, I cannot see any strength.
KCP was one of the rare stocks in which I made some money in cyclicals. Most other times I have failed and hence I am not too keen at playing these things. Unless I have on ground information about stuff and charts also are in harmony with info i have.
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I saw a lot of cup and handle patterns in stocks like tata motors, auto anc like bosch, suprajit, motherson sumi, endurance, sandhar, talbros etc. Some of them gave tradeable bounces too but I was not too convinced about the story and hence refrained from getting in.
Fundamentally I think among the auto sector, the strongest numbers are coming from tractor industry and stocks like escorts, vst tillers etc have run up significantly in last few months. How far the demand for tractors sustains needs to be seen. We have had a good monsoon and govt policies for farmers also continue to remain encouraging. I hear that there is a lot of demand for fertilisers and at places there are shortages. But I have to rely on second and third party newsflow and hence am wary of pulling the trigger. As of now I feel any entry in these kind of names will at best be a short to medium term trade unless govt does something with subsidy scheme like full implementation of direct benefit subsidy scheme. If the latter happens it can be a big boost to the sector.
Among others, within two and four wheeler companies, I am not too sure that we are seeing pent up demand due to near zero sales during lockdown or is the uptick in sales numbers a trend change. My guess is if things were to change for auto sector, first to recover will be two wheeler, then passenger vehicles and last would be CV. But this is at best a guess and not an expert opinion.
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Hiteshbhi thanks for the quick reply…yes to predict cycles is very difficult but since i dont see much downside below 55-52 i am betting on it.
Also added advantage is dollykhanna and govindlal parikh adding this stock on every fall…plus 74 acre of access land parcel in north chennai value anywhere near current market cap…all this convinces me more.
Thanks
Saumil
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What charts show is an objective picture. Then it is up to us how to interpret and act on these. The important thing for me was that the dark cloud cover pattern happened after a very strong run up. Hence it assumes a lot of significance for me.
Plus if you see the psychology surrounding the company, everyone sees only the bullish picture now. No one is worried about the low promoter holding, pledging, rising of KSM prices announced by Chinese manufacturers. etc. Some of the concerns barring the higher KSM prices were never too important for me as I had mentioned many times before too. But the point is that the naysayers have stopped making their negative comments. 
Regarding the results timing, I think Laurus is one of the companies which announces its results midway in results season. Hence expect results some time in late Oct or even Nov. That is still 3-4 or more weeks away.
Whether to believe technicals or not is one’s personal call. If I were not to believe and act on technicals, what would be the use of learning and following technicals? Personally I have seen charts catch the change in trajectory of a company’s fundamentals way ahead of actual numbers being reported. So I am a believer in technicals but not a blind believer. When patterns are crystal clear, I tend to follow what charts are telling. Some times if we own the company in question, ownership bias comes in the way. Contrary to that if we have sold our position, we tend to look more at the bearish connotations of the charts.
At the end of the day its a toss up between how much you lose if you are wrong and how much you make if you are right. You have the word Caution in your ID. Something to ponder.
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@hitesh2710 Bhai, Any views on EID Parry - fundamental or technical.
The co. is trading at substantial discount to its holding in Coromandel International. With the demand for fertilizers and agri products remaining intact, Coromandel is poised to grow, hence the valuation will hold despite the holdco discount.
Apart frm that they have thr operating Sugar and Nutraceuticals business as well with a pre-tax operating earning of 1200 crs. All this avll at mkt cap of approx. 5000 crs.
I may be wrong in my opinion but insiders always have an edge on outsider if the management had already know before hand the performance of the company in last 1 and half month than they come up with stock split so one may not rule out the non financial gains which is Price of the scripe in this case Laurus . It is interesting to see how the things will turned up at the end of the week but I have very limited knowledge yet I believe that one must keep hold unless until your investment thesis is intact and if one on broader market anticipate some better option to invested so one must preserve the profit … as yourself said you had lower entry price and for you that will be sound decision … but I will prefer to stay for long thank you sir for sharing you wisdom and views it always help me a lot regards
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Hitesh Ji, Probably I could not convey what I wanted to ask properly. My question is - can we predict with reasonable accuracy a steep fall or rise in a stock.
For example in case of GMM Pfaudler, stock fell from 6900 levels suddenly. I was wondering if someone with knowledge of charts, price volume action etc could have got alerted and exited before it was too late.
I do wish to learn technical analysis, but it is too overwhelming. But I do use charts to see how the stock has performed for 1 year - 3 -year and 8 year etc. Charts of say TCS, Asian Paint, HDFC Bank etc gives lot of confidence to invest in them for long-term 
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Hiteshji,
From what I have observed so far, your investing style can be summed up as – “ Buy based on both fundamentals and technicals, but sell purely on technicals .”
I have recently read ‘ Trade Like an O’Neil Disciple’
and ‘In the Trading Cockpit with the O’Neil Disciples ’ by Gil Morales and Chris Kacher, who have popularized ‘ pocket pivot buy points’ and ‘seven-week rule’ in these books and identified themselves with the above investing style.
I am curious to know whether you have ever practiced the entry/exit strategies such as pocket pivot buy point and seven-week rule .
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I am herewith attaching gmm pfaudler chart. The weekly candlestick chart shows a candle stick with all time high of 6900 and in same week price closed at 5780 which is significantly lower than the all time high. Next week there was a small white candle followed by a bearish dark candle. This was a dark cloud cover pattern, but it is not a classical dark cloud cover. In classical dark cloud cover we want a big bull candle and following candle stick should be bearish and cover more than 50% of the body of the bull candle. (the more area it covers the more surer the pattern). But here again there were two clues to rely on. One only needed to have an open mind to accept the possibility of loss of momentum. Look at the psychology surrounding the high. The company had I think around the time of hitting all time high bought the global business of the parent and still stock price could not sustain anywhere close to all time high. I have also market the important rising gap region between 3130-3211 to watch out for support if the stock price indeed reaches that level.
One might say that all this is not in real time and comments in hindsight. So be it. But one has to learn from such patterns and be ready to execute signals based on similar patterns in future. That’s what I did. I can prove wrong in case of either the Laurus or the nifty or both. So be it. But if I am wrong I can always change my stance and get back into the market whenever I feel like getting in and in whichever company/sector I want to get in.
Going against the popular perception is a lonely pursuit and often tests our patience and conviction. But the proof of the pudding lies in the eating. No use learning and practicing stuff unless you can act on the knowledge.
For me, it also matters where I have acted. Stock price was 430-500 when I posted my investment thesis regarding Laurus Now it is close to 1350 which is a run up of 170% within a time period of around 4-5 months. If the stock price goes up from hereon, I would be okay to live with the decision. 
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I did not have any knowledge of the books you mentioned. Would have a read and see if it appeals to me. Strictly speaking, William o Neil book is very useful in picking stocks. i.e entry points. Exits for me as mentioned many times before have always been problematic. Maybe someday I would come out with some well defined strategy for exits. As of now, clear cut technical patterns is all that provides objective ways to exit.
Thanks for bringing these books to my notice.
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Hi Hitesh bhai ,
Any sector you feel is showing strength as per technicals despite market looking weak overall ?Many thanks
@hitesh2710 - What changes in technicals will help u change ur view and turn positive. ? Is there a movement beyond a particular level of Nifty that will turn u bullish again ? At the same time- what will confirm ur downward bias? I understand u flagged off dark cloud- but a little more insight would be most helpful
@Hitesh - As of now PE firms are in talks with Granules India for a controlling stake.
- What do you think is the business interest of these PE firms post acquisition of the controlling stake.
- How much can the earnings multiply from current levels in the next 4-7 years(assuming this is period for which PE wants to hold the stake).
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Change in promoters if and when there is a takeover in case of granules will definitely be a trigger for some sort of re rating. It has happened in the past with jb chem, sequent, etc. So it needs to be watched for such developments.
@varun_kejriwal The question is already answered in a previous post on nifty charts. No need to repeat again.
@A_shah Post the market dip in last few days, the most encouraging sign is the market breadth we are seeing. A lot of companies are showing strong upmoves. Need to see whether follow up buying comes through.
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Dear Hitesh ji,
Is there a site where one can see/hear this years’s agm proceedings of companies. If anyone is aware of such a site kindly share.
Thanks
@hitesh2710
Hitesh bhai , can u give any inputs on logistic sector. what i here from others that transporting covid vaccine is logistic nightmares . it has to be transfered in referigerated van till the point of last use…it openes up great business opportunity for cargo and logistic company worldwide. i also heard unconfirmed news that some drug company already made tie up with GATI. please give your valuable guidence.
also attaching GATI s chart it also has started some activities.gati.pdf (138.0 KB)
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