Hi Ashwin,
I read your query, but could not understand the latter portion about “looking through this thread to see If I can spot anything…”
Here is a good link to understand technical indicators. Please go through this. If you are still not able to understand, I will help you till you understand the concept fully.
If readers do not understand what I explain, then I need to improve my delivery. That is the message what I get. Will try to put in more effort.
Here is the link:
Surely will explain CCI with examples of P I Industries, Aurobindo Pharma etc.
Tony
Sridhar,
Please master, these points to remember:
1.CCI has three important line. The Red Line,the middle line, and the Blue Line.
2). The Red line indicates (+100). Anything above this is in overbought territory.
3). The Blue line indicates (-100). Anything below this is in oversold territory.
4). When the CCI indicator line (worm like line moving up and down) touches the -100 (blue line) from **BELOW,**It is time to BUY.
5). When the CCI indicator line touches the +100 (Red Line) fromTOP, it is time to SELL.
Hope this will help you. If still not clear, write in to me.
On 4th October, the CCI of Info Edge once again touched the RED line from below.(In fact it had not fallen much below the RED LINE.) It was a time to BUY. This is only if you are trading.If you are an investor, you should always BUY when CCI touches the -100 (Blue Line) from BELOW. This happened around 2nd September, 2013. BUY when the stock is in OVERSOLD territory.
Tony
As for CCI, when the CCI line cuts the -100 blue line from below it is time to BUY and when the CCI line cuts the +100 red line from top it is time to sell.
Example:
http://chartink.com/stocks/naukri.html Link: http://chartink.com/stocks/naukri.html
Take your cursor to 2nd September 2013. On this day the CCI cut the -100 line from below. At this point, the price of the stock was 297. If you would have continued to hold the stock till 24th January 2014, when the CCI cut the +100 from top, you would have noticed that the closing price was 524. Just in less than 5 months a gain of 227.
Hi Tony,
Thanks for continous guidance to make us understand the technical analysis of stock.
After the previous post, I have done analysis of stock HCL Technology, Following is my understanding.
On P&F charts stock buy signal aroung 800 levels few months back and since then it is in BUYterritoryonly.But if one could not enter stock at those levels, Stockrepeatedlygave multiple buy signals with recent one at 1140 on 10-Dec-1023.
If we consider RSI & CCI indicators, on 28-Nov-2013, There was good on opportunity to read clear buy signal with following details. Stock is up 40% in less than 2 months.
RSI= 34
CCI= -98
Stock crossed 50 day moving average on upper side.
Let me know if my above analysis is correct.
Also I want to understand more on when to sell OR how to derive short/medium technical targets.
Hi Tony,
Thanks for detailed reply. I will study more examples & make my understanding better.
Vishal,
I interpret the RSI as below:
When RSI is below 30 it is in oversold territory, and when it exceeds 70 or more it is in overbought territory. So one should buy when it is oversold and sell when it is in overbought territory.
As for CCI, when the CCI line cuts the -100 blue line from below it is time to BUY and when the CCI line cuts the +100 red line from top it is time to sell.
Example:
http://chartink.com/stocks/naukri.html Link: http://chartink.com/stocks/naukri.html
Take your cursor to 2nd September 2013. On this day the CCI cut the -100 line from below. At this point, the price of the stock was 297. If you would have continued to hold the stock till 24th January 2014, when the CCI cut the +100 from top, you would have noticed that the closing price was 524. Just in less than 5 months a gain of 227.
Now if you are an investor, you can make good entry and exits by closing studying the CCI along with the RSI. You will also notice that the RSI was in oversold and overbought territories on the dates mentioned above.
The CCI is the better indicator, because it gives you an advance warning while the RSI gives similar warning but a little later.
Hope I am able to help you.
Tony
Hi Tony,
tointerpretthe breakpoints.As
Hi Tony,
I have had a good run in Ajanta Pharama, and the valuation comfort of the initial entry point is no longer there. The growth if it keeps up appears to boost the price. technically how is the scrip poised ?
I hold a small quantity of Indag Rubber. At the current price, it appears to be a good bet. Technically how do you place it ?
Regards
Thanks Tony for your selfless service in educating people! I am a fundamental analyst but trying to understand the technical world to sell or buy when a stock is fully priced in or a bargain based on fundamentals respectively. I looked at your previous posts - I understood the explanation about CCI and RSI.
Few questions:
Is it better to see the CCI and RSI on daily charts or weekly charts or monthly charts ?
Should we work with the closing price, median price or other prices ?
I see a lot of technical indicators like CCI, RSI, Williams R, Bollinger Bands etc. What are the most important ones ?
Hi Vishal,
You have really work hard. Your commitment to understanding the Technical Indicators is massive. Great job. You have nailed it with your analysis of HCL Technologies. Keep it up and apply this knowledge to other stocks till you gain more confidence.
When you are trading, and your view is for the short term, remember the following:
1). The 5 day EMA should cut the 25 day EMA from below. This is the time to BUY.
2). When the 5 day EMA cuts the 25 day EMA from top, it is time to SELL.
When you are investing for the long term remember these points:
1). The 50 day EMA should cut the 200 day EMA from below. BUY at this point.
2). When the 50 day EMA cuts the 200 day EMA from top, time to SELL.
These crossovers as they are called, should be used along with CCI and RSI.
Example: INFO EDGE:
http://chartink.com/stocks/naukri.html
On 28th October, 2013, the 50 day EMA of Info Edge cut the 200 day EMA from below. The closing price of the stock was 394. The stock hit a high of 625 on 17th January 2014.
For all strong stocks, the smaller EMA (in our case the 50 day EMA) will always be above the bigger EMA (200 day EMA).
You can check for HCL Technologies, Cera Sanitaryware, Ajanta Pharma. These are just a few examples.
Tony
INDAG RUBBER (243)
Currently, the stock has given a SELL signal and is in the O column indicating more sellers than buyers. It has support at 230. Below this it will become a weak stock and the trend will change. Other support levels are 225-210. Resistance is at 245-270-275-320.
On the candle sticks the stock is just taking support of the 200 day EMA. Any closing below 240 will see massive selling. Watch this level carefully. The RSI is 34 and CCI is -123. The CCI is in oversold territory and the RSI very close to it.
Tony
AJANTA PHARMA (937)
The stock is on a SELL signal but in the X column. It now has resistance at 1000-1020. Support is at 900 and then at 780.
On the candle sticks, the RSI is at 50 and CCI at 21 but sloping down, indicating slight weakness in the stock. It has support at 935-921 and 750.
Await the results today and then decide your point of action.
Tony
Hi Tony,
Could you provide your TA on Yes Bank? What entry points should one be looking at?
Regards,
Rajarshi
http://www.groupon.co.in/deals/chennai/Academy-of-Financial-Trading/472346
As anyone tried this course ?
Rajarshi,
YES BANK (322)
The stock is weak and trading below all the EMA’s. The RSI is at 29 and CCI at -268. Both in oversold territory. Wait for CCI to touch -100 which will give you a excellent opportunity to enter the stock. The ideal way to do it is to keep noting the CCI level everyday. Once it reaches close to -100, that is the time to start accumulating.
On the Point and Figure chart, the good entry points should be at 285-275-265-255.One can do pyramid buying.
Tony
Tony
What’s your take on Shilpa Medicare n Symphony ?
Subbu,
Sorry for the delay. In fact I missed replying to the post.
I see the candle stick chart on a daily basis when the reading is for 1 year. For a chart for more than 3 to 5 years use the weekly chart. I also use the closing price. There are many indicators and so many that I don’t even know them. I use the EMA’s, CCI, RSI which you must have observed from my posts. Recently started using the Bollinger Band in the Upper Layer.
Over a period of time, I have experienced that for me, CCI has been the indicator giving the best entry and exit points. Like you I first pick fundamentally good stocks and then BUY them based on technical indicators. I am sure you too will find this method the best.
Tony
SHILPA MEDICARE (263)
The stock is in O column and on a SELL signal. Earlier it made a triple bottom at 260 and fell further to 240. It has support at 215 which is very strong as it had made tops at this level six times. Resistance is at 260-270-290.
On the candle stick it is oversold as per CCI at -264. RSI at 36 is close to oversold levels. Again it has support at 263 and thereafter at 218 which is the 200 day EMA. Watch for the CCI to touch -100 and that should give you a good entry point if you are a buyer in the stock.
Tony
SYMPHONY (468)
Symphony is busy playing its own symphony. It made a double top at 440 and broke out to touch 470. Here it is meeting some resistance. With good momentum and change in market sentiment, this stock is capable of making a new high. Support is at 440-390-350.
On the candle sticks it is trading above all EMA’s. The RSI is 81 and CCI is 324 both in overbought territories. A slight pull back can be expected. Thereafter it will begin its journey upwards.
Tony
Tony,
This is rgdg your analysis of Shilpa Medicare.
As mentioned CCI is at -264, which means that stock may be at its lowest or more selling pressure.
But, you mentioned “Watch for the CCI to touch -100 and that should give you a good entry point if you are a buyer in the stock.”
What is the reason to wait for CCI to touch -100, is it because you are looking for reversal of selling pressure and sentiments ??
Kindly let us know how to interpret this. Also as you mentioned the CCI always goes up or down and RSI follows later. How do we use CCI in this situation to get better entry points.
Rgds
Vijay
Vijay,
I appreciate your query. Although I have explained CCI many times, I will do it once again for you. When CCI is falling, it need not be the lowest, it can go lower than -264 in the case of Shilpa.Therefore it is better to wait for all the selling pressure to get exhausted. When there are more BUYERS than SELLERS, the CCI will start moving up. You rightly mentioned a change in sentiment taking place. Also it has been observed by me that when the CCI touches -100 from below, at this point the prices are lowest.
For more on CCI read here:
http://www.onlinetradingconcepts.com/TechnicalAnalysis/CommodityChannelIndex.html
If you are using two lower indicators on the candle stick charts, you will notice that the CCI gives the first BUY signals and SELL signals. All other signals follow with a lag. The reason for using RSI is to strengthen your conviction that both the indicators are giving a BUY or SELL signal. This will make your analysis a little more fool proof. These indicators are also to be used with EMA’s. I have with experience started using the Point and Figure charts along with these technical indicators which made my BUYING and SELLING very effective.
I only teach what i practice. Next I will be introducing Bollinger Bands after experiencing the benefits personally.
Tony
Link: http://www.onlinetradingconcepts.com/TechnicalAnalysis/CommodityChannelIndex.html http://www.onlinetradingconcepts.com/TechnicalAnalysis/CommodityChannelIndex.html Link: http://www.onlinetradingconcepts.com/TechnicalAnalysis/CommodityChannelIndex.html
Tony,
Thanks a lot. The analysis which you do have been really helpful in understanding these concepts in a simple and easy manner.
Your patience in answering all the questions put forth to you is second to none.
Rgds
Vijay
Hi Tony,
What is your views on Hawkins ?
Thanks