Point & Figure Charting

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341

Thanks a lot Tony. Although, I also believe in long term investment the problem is when you buy stocks currently thinking that this is the lowest it can get, the stocks keep on making new lows and then you run out of cash. Should one start buying in a staggerred manner or wait for markets to consolidate?

Regards,

Ankit

342

Ankit

I think FII’s are yet to panic and completely exit… If they do sell completely, we can see more lows in the some of the sector leaders in which they are invested…

If we are investing once in a month, we can prolong it by investing once in 2 months…

( Hopefully general elections will be the next domestic trigger for markets. If markets perceive it to be positive it will rise )

343

http://chartink.com/pointfigure/PAGEIND.html Link: http://chartink.com/pointfigure/PAGEIND.html

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

344

http://chartink.com/pointfigure/PAGEIND.html Link: http://chartink.com/pointfigure/PAGEIND.html

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

345

Dear Tony

Recently you commented about Page to Nani. I appreciate your analysis

Today the stock RSI is 17 , CCI is -159 and Momentum is -395 , is that the right bottom? Can we buy in small lots?

It is trading above EMA 200 and just touching bottom support line.

Regards

Jashavant

346

Hello Dr. Jashavant,

I am happy that at long last you posted your query on the blog. You are the only one who has been taking so much interest in Point and Figures, throwing up queries in private. Good to see you here.

One should remember that Momentum Oscillators like RSI, CCI and Momentum indicate the direction of the momentum. They do not indicate the lowest levels. However, they help in getting into a stock at the best prices. It does not mean that the stock cannot fall lower, but gives you a margin of safety unlike getting into a stock at a higher price.

http://chartink.com/pointfigure/PAGEIND.html

On the PnF charts the stock is at the double bottom which is giving it support. However, there is every likely hood of it falling down if markets remain weak. Let it give a clear signal whether it wants to move up or down. Be patient and you will get a good entry level.

Personally i would like to BUY it close to 200 day EMA. A strong stock always bounces at this point. But you never know. In a carnage, good stocks like HDFC and HDFC Bank cannot resist the market onslaught.

It is a good strategy to buy strong stocks on dips by staggering your purchases. An example will clear it.

Suppose you intend buying 100 Page Industries. You can buy 10 at current prices. If it falls 20% then buy another 20. If it falls further by 30% increase your purchases, so that you buy more at lower levels . This way you will benefit by averaging the prices at which you buy.

Tony

347

Hi Tony,

The last point you mentioned about accumulating at every dip is very well explained. It will help investors like us during the current carnage.

Regards,

Ankit

348
[quote="onlycastel, post:276, topic:996262942"] > Another update on the Bullish Percent for 30th July, 2013: > > From the chart one can see that the BSE Index has once again become weak. The only support has been coming from FMCG and HEALTH CARE. The other sectors have not been participating. Now these 2 sectors too are nearly overbought and hence correction has started in them too. Health Care corrected a little and now it is the turn of FMCG. This is the reason why the markets are weak. The best opportunities will arise in the Banking Sector when things stabilize. > >> The Bullish per cent readings for July 5 AND 16 are as under: >> >> BSE SENSEX 100 >> >> The 2 best performing sectors continue to remain FMCG and Health Care. >> >>> Just an update on the bullish per cent chart readings as on 5th July, 2013: >>> >>> | BSE SENSEX 100 | 27 >>> ---|--- >>> >>> The table above shows that the FMCG Sector is the strongest performer along with Health Care. But if you are a long term investor one can find value in sectors which are showing the lowest reading: >>> >>> Remember that the numbers represent the per cent of stocks which are exhibiting a BUY SIGNAL. [/quote]

The purpose of this update is for all readers to look at each sector closely and, watch the changes that are taking place in each sector. Look at the SECTOR ROTATION OR CHURNING taking place. Beaten down sectors like METALS are back in the reckoning. FMCG AND PHARMAwhich were the darlings of the markets are seeing a SELL. These sectors are suddenly out of fashion.

The pundits on TV and the MEDIA play a big role in this. However for a VALUE INVESTOR, beaten down sectors will throw up the biggest gainers. For example, Metals was a totally beaten down sector showing reading of 0 on 6th August, and on 30 August it is showing a reading of 73. Do your own analysis and draw your own conclusions. Markets have a mind of their own. Do not follow the herd but have a mind of your own to be successful in the stock markets.

In my previous post below, I had written that FMCG reading was showing 100, only 2 stocks were in BUY signal. See what has happened to this sector. Down to 30 from 100. Buying opportunities will emerge in this sector. Watch what has happened to ITC. Lot of froth was built up and now profit booking emerged. These examples are just to help you in your journey.

What lesson do I learn from this exercise? Be a CONTRARIAN AND YOU WILL BEAT THE MARKET

PATIENCE IS THE NAME OF THE GAME.

DATE BSE
SENSEX		 BSE
AUTO		 BANKEX CON
DURA		 CAP
GOOD		 FMCG METALS PHARMA REALTY
30/8 35 30 0 40 32 30 73 53 9
30/7 38 30 14 30 9 100 9 53 18

Looking forward to hear from you all soon.

Tony

UPDATE AS ON 2ND AUGUST 2013

BULLISH PERCENT

DATE BSE
SENSEX		 BSE
AUTO		 BANKEX CON.
DURA		 CAP
GOOD		 FMCG METALS PHARMA REALTY
06/08 31 20 7 30 5 100 0 47 18
30/07 38 30 14 30 9 100 9 53 18

NOTE:

Although the Bullish Percent of FMCG shows a reading of 100 all stocks except 2 are showing BUY Signals and are in the X column. All others are in the O column, indicating more sellers than buyers.

DATE BSE
SENSEX		 BSE
AUTO
BANKEX		 CON.
DURABLE		 CAP
GOODS		 FMCG METALS HEALTH
CARE		 REALTY
30/7 38 30 14 30 9 100 9 53 18
16/7 48 20 29 20 36 80 27 71 36
5/7 39 20 29 10 36 70 9 59 27

BSE
AUTO BANKEX CON.
DURABLES CAPITAL
GOODS FMCG METALS HEALTH
CARE REALTY 39 20 29 10 36 70 9 59 27 48 20 29 20 36 80 27 71 36

Col 1 Col 2 Col 3 Col 4 Col 5 Col 6 Col 7 Col 8 Col 9
BSE AUTO BANKEX CON.
DURABLES		 CAPITAL
GOODS		 FMCG METALS HEALTH
CARE		 REALTY 39 20 29 10 36 70 9 59
349

I understand how many of us must be feeling right now. The past two weeks have seen relentless selling in the stock markets. Those who are new to investments, must be wondering what tsunami has hit them. There are others who entered the markets when it was trading in the higher zones and shaking their heads in disbelief at the losses they are facing currently.

Here i can say that I too have been a victim of this in the past. Have learned my lessons well and decided to educate myself so that it does not repeat again. This has made a world of a difference to me. Today I can say with conviction that I was right to have been a seller when the markets were high and a buyer when the markets were trading at their recent lows. Ajanta Pharma has made a world of a difference to my portfolio. But the conviction to buy it came from the fundamental analysis done by Donald and his team here at Valuepickr. So has been the case with Astral Poly, Atul Auto and the likes.

I wish to share a good article which appeared in Forbes India, July, 12. 2013 written by the famous Sanjoy Bhattacharya. It is titled Gains from Fear. He has given a table of stocks which gave BUY opportunities in a crash. I reproduce it below:

BUYDATE BUY PRICE COMPANY SELL DATE SELL PRICE GAIN %
12/3/2009 710 ASIAN PAINTS 23/12/2010 2950 315
12/3/2009 256 BAJAJ AUTO 25/11/2010 1628 536
17/3/2009 254 CRISIL 15/4/2011 684 205
12/3/2009 165 M & M 30/12/2010 775 370
12/3/2009 1470 NESTLE 9/3/2011 3960 169
9/3/2009 574 SHREE CEMENTS 8/11/2010 2245 291

Such opportunities come only when there is FEAR and GLOOM & DOOM all around. So make the best of the opportunities which are likely to come your way especially in the wake of the Syrian crisis, QE withdrawal and depreciation of the Indian rupee. You can add elections to this and wait for the moment.

Charles Mackay a thinker rightly said " Men go mad in herds, while they only recover their senses slowly and one by one.

Don't follow the herd and you will be successful.

Tony

350

Overcoming the Fear of the Unknown is a great article by Prof. Sanjay Bakshi. Please do read it.

https://www.dropbox.com/s/ojlr9lnpf4a5mzj/Overcoming%20The%20Fear%20of%20the%20Unknown.pdf

351

Hi Tony,

Thank you for ur view on HDFC Bank. Ur views on Shilpa Medicare technically?

Regards

352

Hello RK,

The chart has not been updated subsequent to bonus issue. I will get in touch with Chartinks and see if they can update it at the earliest. Then will I be able to answer your query. Till then, bear with me patiently.

Tony

353

Hello RK,

You must thank Akash at Chartinks who is very cooperative. I requested him to update the charts and he did it so quickly.

SHILPA MEDICARE:

http://chartink.com/pointfigure/SHILPAMED.html

The stock is currently in the X column on a Sell signal. The next resistance is at 185 which has been holding on for long. If it breaks this, then the stock can touch 215 once again. On the lower side the stock has support at 160 and then 140.

http://chartink.com/stocks/shilpamed.html

On the candle sticks charts, the RSI is close to over bought territory. The CCI is at 45 and Momentum at -3. The stock is above 5 and 25 day EMA which is a good sign. If it crosses the 50 EMA at 174, then one can expect a bounce back. Hope the markets support it.

Tony

354

ATUL AUTO:

Despite coming out with good set of numbers, this stock has got stuck for a long time. However, things seem to be looking good now.

Although the stock is trading in X column it is on a SELL signal. It now has resistance at 195, 200 and 215. Will it break this resistance??

http://chartink.com/pointfigure/531795.html

Let us look at the candle stick chart:

http://chartink.com/stocks/531795.html

The stock has to cross 179 where it will take out the 50 day EMA and 200 day EMA at 178-179 respectively. If this happens then the above levels of 215 are achievable.

On the short term momentum indicators, the RSI is at 46, CCI at 35 and Momentum at .60. All are positive. Hence we can have a break out if the markets are positive. Lets hope this happens.

Tony

355

AJANTA PHARMA:

While the broader markets were falling, Ajanta too started joining the other big boys. It came all the way to 720. At that point I was hesitant to buy, but quickly checked the charts and found that it had support around 708, its 200 day EMA. I decided to BUY. Then i hoped it would touch 780 for the stock to once again trade in the X column (remember 3 box change rule). It did exactly that. Then i wished it cross 820 for a break out. That morning i wrote to my friends to watch this level. It broke out, although the markets were weak. Thereafter it zoomed all the way to 890 levels. This stock has been playing copy book style. Now lets hope it crosses 925 where it will once again trade above the 50 day EMA as well as make a triple top at 920 and give a BUY signal once again. It can then make history again at 1160. All short term momentum indicators are showing positive signs too.

Will this happen? Yes it can, depending on Mr Markets moods.

Tony

356

Tony,

What’s the exact price that you bought Ajanta at? What is your approach on Kaveri and Astral as they too have come down from 1700 and 600 levels respectively?

Regards,

Rajarshi

357

Hey Tony,

could you TA -Thangamayil , Piramal Enterprises & IDFC

thanks & rgds

358

Rajarshi,

I have been buying it from 440 onwards, and sold it around 780, then bought around 580 to sell around 1000 and even at 1160 levels. Now covered all sales and added more at 720 levels. So my average price has come down.

As Kaveri and Astral are on my radar. But will buy only when there is fear in the market. It is at such times that you get the best prices and choices. Kaveri should be a good buy around 1300 levels. Astral is just gone ex split.The chart needs to get updated. So will watch and await fundamental analysis by our excellent team led by Donald. GRP seems to be turning around. It is on my radar too.

Tony

359

Hello EASYTOGET:

As far as IDFC is concerned, I had given my views on the same earlier.It has moved to the X column and has resistance at 98. The stock continues to be weak.

Now coming to Thangamayil, this stock too looks like IDFC.

Since June 2013 the stock has been making lower tops and lower bottoms. These are signs of weak stocks and should not be ventured into.

http://chartink.com/pointfigure/thangamayl.html

The stock has made a double bottom now at 163 and can fall further too. For this stock to change its trend, it has to cross 195 where it had made a triple top earlier. This will be a strong resistance to break. Once this level is broken then one can look for further highs. Till then it will trade below 195 for some time. Please see the line marked in red. This is the Bearish Resistance Line at 195.

http://chartink.com/stocks/thangamayl.html

On the short term oscillators, the stock is showing some signs of pick up. Two out of three short term momentum indicators are still negative. Watch out for CCI to turn positive. If this happens, then the stock will move up.

It has also to cross the 25 day EMA at 176 and then the 50 day EMA at 186.Till such time the stock will be trading below these levels.

Tony

360

PIRAMAL ENTERPRISES:

This stock has been trading above the Bullish Support Line ( Blue Line) since June, 2013 which is good. It has been bouncing back close to the Bullish Support Line.

http://chartink.com/pointfigure/pel.html

Currently the stock is in X column and on a BUY signal. The next resistance is at 640 and if it crosses this it will make a new high.

On the lower side it has support at 560-550 and then at 530.It has strong support at 550 which is the Bullish Support Line.

http://chartink.com/stocks/pel.html

Readers are requested to closely watch the CCI which is currently at 92. Previously when the CCI crossed 100 on 29th August, the stock was trading at 565.At 565 the 5 day EMA cut the 25 day and 50 day EMA from below. This was a sign for a huge break out which happened and the stock hit a new high of 650.

Its very important to watch the 5 day EMA cutting from below the 25 day EMA as well as the 50 day EMA cutting the 200 day EMA from below. These are levels of huge break outs. Inversely when the 5 day EMA cuts the 25 day EMA from top, and 50 day EMA cuts the 200 day EMA from top, there is a big fall. The 5 and 25 day EMA intersections are short term, while the 50 and 200 day EMA intersections are long term.

Lets wait and watch what happens this time.

Tony