Hello Ashwini,
Your thank you is accepted, however it will be nice if investors like you give me a feed back on the analysis i put up over here. Let me know if it has helped you or not. Many keep asking for my analysis but fail to give me their feed back which is very important.
Kind of you to have replied.
Tony
BANKING STOCKS:
In the recent carnage, banking stocks have been beaten and badly bruised. Every day you watch television and you here more gloom and doom for this sector.
On the Bullish Percent Chart the Bankex shows a reading of “0” ( zero) indicating all stocks in this sector are on a SELL SIGNAL, and more pain is likely to continue in this sector. Suddenly this sector has become a leper, no one wants to touch or speak about.
There was a time when all were chasing YES BANK even at 400 levels and today no one wants to look at it. This is not a recommendation to BUY YES BANK. It is here and in such times value investors start making purchases for the long term and end up getting Multi Baggers.
This is what Warren Buffet did when a similar situation occurred in USA.
Warren Buffett and Wells Fargo
During 1989, Warren Buffett started accumulating a large number of shares in Wells Fargo & Company, abig Californian bank. Because of a huge bad debt crisis faced by the American banking industry at thattime, bank shares were down in the dumps. Moreover, Californian banks such as Wells Fargo werethought to be even more risky due to the specific risk of a major earthquake in the state. For this reason,Wells Fargo stock was even more in the dumps that those of other banks outside California and wasselling for less than five times after-tax earnings. Buffett did not agree with this valuation placed by themarket on the bank. According to him, even after considering the risks specific to Californian banks, the****price of less than five times earnings for one of America’s best managed banks was ridiculously low.
Then, in early 1990, due to another banking crisis - this time related to real-estate loans, shares of banksexposed to real-estate backed loans were hammered down even further. Because Wells Fargo had a largeexposure to Californian real estate, its shares fell in early 1990 to prices which were 50 percent belowthose paid by Buffett in 1989. Undeterred, Buffett continued buying more shares. His total investment inthe bank which cost him less than 500 million dollars is worth more than 2 billion dollars today. His****explanation to his shareholders made soon after the investment is worth noting. Here’s what he told them:
"Even though we had bought some shares at the prices prevailing before the fall, we welcomed the****decline because it allowed us to pick up many more shares at the new, panic prices.
Investors who expect to be ongoing buyers of investments throughout their lifetimes should adopt asimilar attitude toward market fluctuations; instead many illogically become euphoric when stock pricesrise and unhappy when they fall. They show no such confusion in their reaction to food prices: Knowingthey are forever going to be buyers of food, they welcome falling prices and deplore price increases. It’sthe seller of food who dislikes declining prices . . .
Identical reasoning guides our thinking about Berkshire’s investments. We will be buying businesses - orsmall parts of businesses, called stocks - year in, year out . . . Given these intentions, declining prices forbusinesses benefit us, and rising prices hurt us."
In my opinion, this is the best time to do your analysis and keep your shopping list ready. Buy great businesses at Bargain Prices.
Tony
Tony,
Thanks for your answer.
I have one question on my analysis of page. When stock was at 4400 , we were supposed to buy it and when stock will be at 3800 , we are supposed to sell it. Is it not contradictory? I am confused because of it. Please guide
Hi Tony,
Indian stock markets are not efficient, and there is insider information available. The impact of this info is more often than not visible through charts. That’s the reason I have started to believe in Technical Analysis.
I have quite often benefited from your and Hemant’s analysis. Would love to learn this art too.
Till such time, I really thank your patience and largess in answering to every query. May God Bless you.
Thanks
This is preciously the reason why Warren Buffet & many others are not into technicals.
The basic assumption of technical analysis is **market know more than any one individual **& hence market knows there is some problem in page’s business at 3800, so its a sell then.
But at 4400, Page is a great business & hence it will go higher.
Strange it may sound, but that’s the assumption!!!
Hi Tony,
Thanks for sharing the info about Buffet. Could you share what is on your watch list? Would be nice to know 
)- HG
In my opinion, this is the best time to do your analysis and keep your shopping list ready. Buy great businesses at Bargain Prices.
Tony, Hi
Could you pl share your views on IDFC, has a free fall in last 2 days.
Thanks!
.Nani,
You keep asking intelligent questions which brings the best out of me.
Earlier I had written that whenever you wish to buy a stock, one has to see the Markets. So lets look at the Nifty.
Subsequent to May 2013 where the Nifty made a high of 6200, it has been making lower highs and lower lows. This is not a good sign which showed a negative bias. The Nifty has consistently started falling to lower levels. From 6200 to 5300. So ask yourself, if you should buy a stock just because it has given a BUY signal. If you would have done that then you would have bought Page at 4400. If you would have read the markets, you would have held on and got a chance to buy the same stock at lower levels.
Also worth noting is that the stock is already at a new high. Do the fundamentals support your buying. Page has been trading at very high P/E so there is less margin of safety.
It is rightly said " PATIENCE IS A VIRTUE".
Buying a stock on a pull back is always better than buying it closer to the Buy signal or as you call it on DIPS. This applies to strong stocks.
http://chartink.com/pointfigure/PAGEIND.html Link: http://chartink.com/pointfigure/PAGEIND.html
In the month of July 2013, the stock gave a BUY signal at 4500 after making a double top at 4400. If you would have bought it at 4500, then you would have gained just 100. However, if you were patient, and knowing markets are weak you can still buy it at 3900 levels. This is not a BUY recommendation from me. So if the stock reverses from 3900 your gains will be bigger than at 4500.
Other things to watch are the 200 day and 50 day EMA. Any stock which falls below 200 day EMA will face huge selling pressures.
There are many other factors to watch too. Like the Relative Strength Index, Bullish Percent of Sensex, Bullish Percent of the Sector, Bullish Support Line and so on.
Similar analysis applies on the SELL signal too.
Hope my explanation is clear.
Tony
Ashwini,
I appreciate your feed back. Thank you for taking out time and writing back. As for any help on the subject, feel free. I am always there for any explanation or clarifications.
Do spend at least an hour reading and re reading the book on Point and Figure. I still do it day in and day out since i started about more than a year ago. It brings more clarity in thinking and application.
Tony
HG,
My list includes Asian Paints, Pidilite, Nestle, VST Industries, ICRA, Yes Bank, Karur Vysya Bank, Gruh Housing, Shriram Transport, Hawkins.
Tony
)-
Thanks, Tony. I got serious about investing only in the last 2-3 years so being in this type of market is new for me. One part of me is like a kid in a candy shop…thinking about what to buy!
Hi Tony,
Can you provide TA on HDFC Bank?
Thanks and regards
Ilyas,
First time I have seen you here. WELCOME!
IDFC:
http://chartink.com/pointfigure/IDFC.html Link: http://chartink.com/pointfigure/IDFC.html
The stock has had a free fall. I do not know where it will stop. One cannot go bottom fishing at this point of time. Unless the stock moves once again to X column, one really does not know where the bottom will be.
http://chartink.com/stocks/idfc.html Link: http://chartink.com/stocks/idfc.html
All the short term indicators are in negative territory. The stock is oversold. On RSI it is at 26, CCI at -458 and Momentum at -28. It is trading below all the Moving Averages. One will have to be patient and look at the charts once again. Presently there is little hope here. Do write to me again and I will try to review the charts once again.
Tony
Welcome RK. I am seeing a lot of new people out here. I am happy to be of help to one and all.
HDFC BANK
http://chartink.com/pointfigure/HDFCBANK.html Link: http://chartink.com/pointfigure/HDFCBANK.html
The stock made a triple bottom at 570 and gave a SELL signal at 560. Now the next support is at 550 and then at 490. It will also trade below the Bullish Support Line which will indicate that the stock has become weak.
http://chartink.com/stocks/hdfcbank.html Link: http://chartink.com/stocks/hdfcbank.html
I have repeatedly written how important the 200 day EMA is to a stock. Look at the chart, subsequent to the stock falling below the 200 day EMA, the fall was fast. Also one should look at the 50 day EMA cutting the 200 day EMA from top. This is the end of the momentum and the stock will correct. These two things have happened and the stock corrected very fast.
The RSI at 31 is near the oversold level, CCI at -192 and Momentum at -39. One can expect some more fall from here. Keep a watch on the CCI for it to touch positive territory. This will give a sign of the stock moving up once again. For long term investors, this is a good opportunity to buy the stock at BARGAIN PRICE close to 490.
Tony
Thanks a ton Tony,
Highly appreciate your efforts to painstakingly answer each and every query fired at you.
Keep up the great work. Would eagerly await your detailed analysis on IDFC.
Best wishes!!
Ilyas,
I had answered your query at 18.22 hours. See above. Anyway repeating it once again for you.
IDFC:
http://chartink.com/pointfigure/IDFC.html
The stock has had a free fall. I do not know where it will stop. One cannot go bottom fishing at this point of time. Unless the stock moves once again to X column, one really does not know where the bottom will be.
http://chartink.com/stocks/idfc.html
All the short term indicators are in negative territory. The stock is oversold. On RSI it is at 26, CCI at -458 and Momentum at -28. It is trading below all the Moving Averages. One will have to be patient and look at the charts once again. Presently there is little hope here. Do write to me again and I will try to review the charts once again.
Tony
Thanks Tony. Aprreciate your quick response.
Regards
http://chartink.com/pointfigure/HDFCBANK.html Link: http://chartink.com/pointfigure/HDFCBANK.html
http://chartink.com/stocks/hdfcbank.html Link: http://chartink.com/stocks/hdfcbank.html
Hi Tony,
Can you provide TA on HDFC Bank?
Thanks and regards
Hi Tony,
How long is this carnage going to prevail in the markets? How much fall do you see in the markets from this point? Macros are not looking good.
Regards,
Ankit
Ankit,
On television there are many guys who think they can predict the future. I am not one of them. As for me, I will do an analysis of the chart and give you certain levels which i had done earlier too.
NIFTY:
http://chartink.com/pandf.php?name=nifty Link: http://chartink.com/pandf.php?name=nifty
The Nifty is trading in the O column and on a SELL signal. It had support at 5300 and then at 5250. Today at the time of writing, it had made a low of 5130. The next support lies at 5050, 5000 and then 4800.
All these levels look possible if the global scenario does not change, especially with Syria coming up on the radar of US. However, for investors who are looking at the long term, it is a good time to accumulate Good Businesses at Bargain Prices.
Tony
An inspiring story of a Grandmother who has faith in stocks.
http://blogs.wsj.com/indiarealtime/2013/08/01/the-grandmother-with-faith-in-indian-stocks/
Just to perk you up in times of gloom. Have faith in the long term not the short term. One should see opportunities when dark clouds hang low.
Tony
