nimble-builder domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home1/portfol1/public_html/wp/wp-includes/functions.php on line 6121restrict-user-access domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /home1/portfol1/public_html/wp/wp-includes/functions.php on line 6121Performance of NSE Sector & Thematic Indices for the week. See something interesting?
Pharma and FMCG are clubbed as defensive sectors and generally move in unison. Not this week though 🙂
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CNX Nifty closed flat for the week (loss of 1.55 points over the week)
One of the stocks that I am hearing a bit lot in recent times has been Repco Home Finance. The stock today made a all time high though it did close only slightly higher. The chart of Repco is interesting in the way it has moved from the time of listing till date. Has broken out two times, tested the break-out but not pierced them before moving to the next band.
In the fundamental circles, people have been pretty gaga on the stock owing to its strong financials (Highest NII among its peers, highest 5 year CAGR ratio (profits) among others). Looks like a good stock to own for the medium to long term.
For a long time now, PSU Banks have been the abadoned child in the markets (giving company to PSU / Reality / Infra among other sectors – all of which (save for PSU’s) incidentally are the one’s which have dragged down the performance of PSU banks in the first place.
We do not have a Private Bank Index with which to compare and hence have compared with Bank Nifty which has both PSU’s and Pvt Banks in its indices. Bank Nifty is currently dominated by Private Sector Banks which constitute nearly 80% of its weight and hence a Index against which to compare.
Appended below is the Relative Comparison chart of Bank Nifty vs PSU Bank Index since PSU Bank Index topped out in November 2010.
The under-performance of PSU Banks cannot be over-stated with the Index delivering a negative return of 47.78% vs a negative return of 4.17% for Bank Nifty.
But with PSU Banks not being allowed to be toast, its a question of when value investors shall start finding value in them. For now, among the few value investors I follow, none are bullish. But the charts seem to indicate a real change in the scenery with PSU Bank Index finally breaking above its first major resistance. Whether its start of a new trend or just a short term bump before the larger trend takes over is a matter of debate.
For those interested, here is a Relative Performance chart of the major PSU Banks.
Best Performer has been Bank of Baroda with worst being IDBI Bank
Its normally tough to make money in markets but when you add noise, its very easy to lose focus and forget the signal that is pointing the other way round. As a trader / investor, we are generally biased one way or the other. We read / analyze and tend to form a opinion based on the facts at hand. While we believe we are objective, it really is something we ourselves deep inside will have a tough time believing.Â
What is worse than having a bias, is having a bias but not accepting the same. I follow several commentators who write / tweet on markets and its always amazing how while claiming to be unbiased in terms of where the market can go from here, always have a very strong opinion on what markets shall do.Â
Markets in the last couple of months have made a run up of 14% since we made a low in Feb. While I myself was not sure if this rally had legs in the Initial stage, once we started taking out major resistances and then broke the all time high, there was not much of a question as to where the trend is. Of course, since I trade based on a trend-following system, my view in itself has little relation to what I do, but having a strong opposite view can play havoc with the mind making it tough to take positions as and when dictated by the system.
One of the guys I follow on twitter has been bearish (though doesn’t admit it) for quite some time and just as a time pass activity decided to analyze his tweets since the low of Feb. While I could not find one tweet which said “Buy Nifty” (only once was a Call Option asked to be purchased on Dollar Cost Averaging though it was asked to be quickly discarded once the average price was reached), here is a chart with the main tweets appended on it.
The only way Noise can affect your trading is if you do not have a well tested & fully automated (in terms of Buy / Sell decision signals) system since its always tough to go against the grain (read herd).Â
To close, a quote from @ReformedBroker “Be on financial Twitter to become a better investor, not because you think the guy tweeting stocks at you has a clue”
Getting educated in markets is pretty expensive affair since our mental clocks aren’t drilled in the way its required to for success in markets. Since unlike any other field of expertise, one really doesn’t need to have a formal professional education (not that having it ensures success, it only means you open your innings with higher odds), it attracts all kinds of people with the only common factor among most of them being that they have money to risk.
Unlike other professions, learning about markets isn’t easy in the formal education set-up. You may learn a bit about it by doing a MBA, but the theory one learns and the reality once faces when exposed to the real world is spaces apart. You can on the other hand complete a certification course such as CFA (for Fundamentals) or CMT (for Technicals) to get a better understanding of how to go about doing business (read Investing / trading) in the markets.
Other than the above International Certifications, here in India, we can find many companies / Individuals offering courses for the short to medium term. The course fee for such ranges from Rs.2500.00 (One Day) to a multi month mentorship programme costing Rs.8 Lakhs +
While I can understand the acceptability and popularity of cheaper courses, I really fail to understand who in the right mind would want to pay Lakhs of Rupees as fees for learning from some one who in all probability doesn’t earn much from the markets in any case (why take un-necessary risks when its easier to earn money by preaching to newbies).
If you are willing to invest a few lakhs, my own advise would be to spend the money on accredited courses from leading institutions (in India “National Institute of Financial Management” comes on top of my mind. You find plenty of them in US Universities as well) since the recognition that entails and faculty who you can meet can rally add value to deeper concepts and thoughts.
While I have reached my current stage without attending any such courses (when I entered the markets, there were not many structured courses anyways), I do believe that one can get some benefit out of them. But there is no short cuts to markets and the only way to survive out here is to learn and un-learn (as and when we come across new data that seems to conflict our initial outputs).Â
While learning from the markets without any experience or guidance is a expensive affair, it doens’t have to mean that you need to pay an arm and leg to get that.
Choose Wisely!
Disclaimer: I have taught students when I was working in an organisation before as part of my responsibilities.Â
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A observation of the chart of Godrej Industries tells you one thing – the stock likes to consolidate a lot. Since the rise in 200, the stock moves higher and then falls back to consolidate before attempting and making a fresh peak. Unfortunately that pattern seems to have ended in 2013 and since Jan has been in a pretty long term consolidation pattern.
While even now, the break-out is yet to happen, as you can see on the chart, the stock has finally been able to close above the recent peaks. Lack of volumes mean that there is still a probability of a re-test of the 200 EMA (currently at 280) which would then be a ideal point to enter the stock.
On the other hand, if the stock continues to rise, a break-out above 330 would be the place to enterÂ
The best entry for a stock is when it breaks through a Resistance level which has been tested multiple times in the past. Then again, this is no guarantee to the trade being profitable but do this long enough, and the odds will be in favor of you.Â
BF Utilities is just below one such major resistance and if broken, can result in pretty strong gains owing to its resistances coming at much higher levels. Of course, there is also a risk factor in the sense that this stock is not as Liquid as many other stocks in its sector. In fact, during its recent surge, it has on many days been locked on circuit which while indicating strong demand for the stock is not a sign that one should be comfortable with. After all, if it starts to hit circuit on the way down, it would be tough to even get out at a loss (and even his has happened in the past in this very stock). All in a all, a high risk (and probable high gain) stock.
