Union bank flag pattern failed. Stock price went below the boundaries of flag. The cup and handle pattern breakout level was at around 45. And a double bottom breakout level just below the cup and handle breakout was at 41.50 where the stock price seems to have taken support recently.
If we are getting into trades involving very bullish patterns like a flag (where there has usually been a prior run up) then it makes sense to have tight stop losses, say around 7 to 10% from the buy price so that losses are minimised if patterns fail.
In case of cup and handle patterns, usually there is a rounding bottom below breakout level and hence support is expected on declines to neckline levels or slightly lower. If that support too does not hold, then it makes sense to exit.
In whichever trade one takes based on bullish technical patterns, one has to be very mindful of stop losses and execute stop losses once certain levels are breached. Where to keep these stop losses is something one needs to decide on oneās own expriences. Whenever there is strong short term meltdown as we had currently most bullish patterns fail to play out. So one has to be mindful about market set up as well. In rare instances bullish set ups will not be voilated inspite of weak markets. Stock prices do not go up too much but do not fall also. These are the stocks which need to be kept in watch as these are likely to outperform once markets reverse.
Usually once markets reverse, the most beaten down names will give bounces and dead cat bounces. and the above resilient names will go sideways or show moderate gains. Once markets re attain the momentum, these names will start real momentum. For these types of names, watchout for tight consolidations with volatility contractions. VCP patterns described by Mark Minervini. Coming out of bear markets (short term or long term) these are the patterns to be looked out for.
@sai_sirish I dont track India bulls housing. @aashu24ahuja Anyone bulliish on psu banks space can ride the psu banks etf, if there is enough correlation and liquidity.
Laurus had a bearish head and shoulders pattern breakdown and targets mentioned at the time of putting up charts were 455-460. Stock price went down to those levels and then gave a rally to I think 530-540 levels. Usually when a bearish or bullish pattern reaches target zones, the slide or rally halts and there is a move in the opposite direction though of a smaller magnitude. Or else there is consolidation and then a move in opposite direction.
What I feel about Laurus (personal opinion) is that the big move is now over and there will be smaller up and down moves and stock price will try to establish a trading range and consolidate. In the near term I do not see the stock price taking out previous highs.
If one is following technicals, instead on stocks which have fallen from bearish patterns, it might make sense to look out for stocks breaking out from bullish formations. For guys following pure fundamentals often the reverse is true.
What is your view on consolidation trade strategy while doing day trading ?
Do you like trading in any specific stocks when they are in sideways specially day trade ?
Are you tracking NMDC or SAIL . NMDC looks like a special situation with demerger , good dividend yield but technically showing weakness . Steel cycle may last for 1-2 more years and by Fy23 SAILās debt will get reduced considerably
Most of these metal names particular steel, aluminium and copper etc producers have had a stupendous run in past few months. Prices of a lot of these names went up multifold, some even up by 5 times. After such big rallies, its not uncommon to see periods of pauses in the rally. Sometimes early part of a pause is difficult to differentiate from an outright reversal of a long term nature.
And fundamentally its very difficult to predict the trajectory of demand in an increasingly uncertain world. So I tend to rely on charts to guide me on how to trade these names. As of now I donāt see too much attractiveness in these names. There are better names to look at for more surer and quicker returns. I keep putting up charts of stocks which I find interesting on the 52 week high thread and especially where I find price point is at an actionable point.
@hitusohi1 I do not do intra day trading so not much idea how swing trading will play out. But my guess is if you use a lower time frame chart say a minute or 30 min or hourly chart then patterns are likely to play out in a similar manner.
But my experience is that as you go higher in time frame, the chances of getting better results with technicals improve drastically. Plus combining technicals with fundamentals gives even better results.
Need your insights in understanding below comparisons:
Chemical Company(Privi) vs RajaratanGlobal(Both Indian):
Note: itās not apple to apple comparison. in simple words āMota Mota Comparisonā
I wanted to understand from you on one hand we have a chemical company having OPM margins in the range of 17-21 with promising future and long term contracts on the other hand we have RajratanGlobal with stable OPM margins close to 21 with expansion planned in next 1-2 years. Rajratan has entry barriers in term of gestation period of contracts. Now Market is ready to give P/E upwards of 50 to Chemical Company while Rajratan Struggles at 20-30 P/E.
ABB Vs RHIM(Both MNC):
Both of them work in different sectors so again doing Mota Mota Comparison.
if you see OPM margins of ABB historically it has been in the range of <10 and for RHIM it has been 16-20 both are prone to Infra Spending with ABB being more secular so demands a premium. Both have very good R&D Spending and champions in their respective field. Market gives ABB a P/E upward of 100 while for RHIM it languishes at 35-40.
While i do understand Price is Market and Emotions driven and Different Sectors Command different valuation.
But when we can found similarities among Business traits can we rely on it ?
What is the quality that prevails among Businesses ?
Its not my expertise to compare apples to oranges. (dont know who else is expert at it. )
Coming to your comparision of privi with rajratan ,
I do not know too much details about both companies. But as far as I know, Privi is into making aroma chemicals, raw material for fragrances. While rajratan global is involved in making wire beads, mainly used in automobiles and in construction and engineering.
One of the points in favour of privi is that market perception about aroma chemicals would be that it would be less cyclical as compared to wire beads. (fragrances less cyclical than tyres) The other aspect you would need to find out is what kind of competitive position these companies enjoy. My guess is privi would again score there. And promoter perception. Privi I think is promoted by Prem Watsa group. Privi enjoyed ROE in range of 25-30 barring 2021. That again would be lower for rajratan global. And finally the sector enjoying market fancy. Chemicals especially speciality chemicals is a fancied name in the markets currently as compared to wire beads.
Similarly in case of ABB vs RHIM, ABB is in a lot of sunrise sectors, most important among them being EV charging grids. And other cutting edge technologies in automation, electrical and electronics segments. RHIM is an ancillary play for steel, being in refractory manufacturing. So I guess you get the idea why certain companies are valued differently from others.
This is the last time I am attempting to compare apples and oranges. Practically speaking these comparisions are just academic exercises and often a waste of time. Because then one would go on an endless comparision of as diverse sectors as steel ancillaries (which is as old a business as it comes) and automation and EV etc (which is the sunrise sector).
As investors our approach should always be to focus on individual companies in most cases and try to find out the best investment opportunities based on individual company traits. Or at most look at a sector and try to figure out where market fancy is shifting and where earnings tailwinds are going to be. Trying to complicate our learning curve takes us on paths we do not want to travel, if we want to hasten our investment learning and journey.
Thank you a lot for helping us all and sharing your vast sea of knowledge. I hope you would be able to tell me your views on GPIL (Godawari Power & Ispat Ltd.)
@hitesh2710 , sir please check glaxo chart and give your views.
their are two recent development
The Board of Directors (āBoardā) of the Company at their meeting held on 26th July 2021 approved:
(a) transfer of the trademarks 'pertaining to ālodexā and āOstocalciumā brands in India along with legal, economic, commercial and marketing rights of such brands and
other associated assets to GlaxoSmithKline Asia Private Limited with respective values aggregating to INR 164901 lakhs.
(b) acquisition of assets and liabilities associated with the vaccines business of GlaxoSmithKline Asia Private Limited for a consideration of INR 166 lakhs.
also recent development of antibody cocktail .
chances are that company can give good dividend from this amount.
chart also showing intersting development
Wanted to know your views on the textile cycle and export oriented textiles companies in particular. Lot of export oriented companies like Orbit Exports, Faze three exports, Trident and Wellspun have given good returns and seem to be consolidating in a tight range right now.
What are your views on this theme going forward and the textile cycle as a whole. Do you feel that there is still steam left in this theme or have we plateaued out here.
This is a very cyclical sector and hence wanted your expert knowledge and advice to play out the theme well.
Also if you track any of the above mentioned stocks then it would be an added advantage to know your views on them as a techno funda bet.
I dont track glaxo fundamentally. But chart seems strong stock price seems on verge of breakout above its all time highs. Its a company with a lot of write offs and write backs and thatās what keeps me away from it. I never know what to expect from it next.
@navonline7 I have shared my views on IB real esate multiple times in the past. Nothing new to add. View remains same as before.
@dm88 Textile is a sector that seems to be enjoying strong tailwinds and results of a lot of these companies have been very good. After strong run ups in the past, most of these stocks are taking a pause. I am not currently invested in any textile stock (having booked out of ICIL and trident) but as a theme it seems interesting.
Iām tracking EKI energy service from July 2021 there returns is unbelievable there is interest of FII and DII
Wanted know is it scam? such returns possible?
Hello Hitesh Ji
Reliance and other companies interested in Sintex Textile was the news . Will shareholders gain anything or will it be another DHFL story ?
Its difficult to ascertain whether existing investors will gain out of takeover by other companies which have gone in to defaults. There are a lot of variables to these outcomes.
If you have to think about portfolio returns perspective, the question that needs to be asked is how much percentage of portfolio can you allocate to these kind of situations. Its suitable for someone with a very diversified portfolio. Otherwise in concentrated portfolio, its difficult to allocate enough capital to these situations. And with small allocations in a concentrated portfolio its difficult to make material difference in overall portfolio returns.
The idea in investing is to always look for surer more consistent returns rather than these T20 kind of situations. There is no harm in looking for short term positions, but one has to be sure about the company involved.
Hello Hitesh sir,
One query about your recent technical pick āGujarat Fluorochemicalsā. Due to the unfortunate yesterdayās event the stock went down by ~8%. How to deal with this kind of situation?
Since it is fundamentally a good company add some more or till the picture is clear just exit as it is a technical pick.
@hitesh2710 sir, two questions
1.how do you average up,
2.how do you decide when to take the profit and not give back the gains that you have,
Any parameters?
GFL had an unfortunate accident in terms of blast and fire due to which there was unfortunate loss of human lives. The information regarding the impact of this accident on the overall business and continuity of the business is not yet clear. There has come an element of uncertainty in relation to the business of the company.
In such situations, the main decision I have to make is to decide what kind of allocation I want for the stock in my overall portfolio. So I usually reduce allocation in the face of uncertainty and then raise my stakes once picture becomes clearer. Here the development seems to have affected near term prospects (if at all) and longer term future at this point of time seems okay. So I continue to hold with reduced allocation. The current correction was in a way a blessing where I could find attractive options to deploy this fund raised from reduction of allocation.
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