Niftymagician:Bhavin's Trade Funda...

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Niftymagician:Bhavin's Trade Funda...

Unread postby bhavin » Sun Dec 13, 2015 11:38 pm

ACC D - RSI 40.83
ADANIPORTS D - RSI 22.11
AMBUJACEM D - RSI 31.49
ASIANPAINT D - RSI 55.7
AXISBANK D - RSI 29.32
BAJAJ-AUTO D - RSI 46.47
BANKBARODA D - RSI 31.61
BHEL D - RSI 29.53
BPCL D - RSI 47.36
BHARTIARTL D - RSI 27.18
BOSCHLTD D - RSI 33.41
CAIRN D - RSI 29.72
CIPLA D - RSI 46.08
COALINDIA D - RSI 33.41
DRREDDY D - RSI 26.66
GAIL D - RSI 51.58
GRASIM D - RSI 41
HCLTECH D - RSI 42.51
HDFCBANK D - RSI 39.95
HEROMOTOCO D - RSI 36.73
HINDALCO D - RSI 45.04
HINDUNILVR D - RSI 54.47
HDFC D - RSI 43.25
ITC D - RSI 39.32
ICICIBANK D - RSI 30.84
IDEA D - RSI 37.02
INDUSINDBK D - RSI 44.11
INFY D - RSI 44.27
KOTAKBANK D - RSI 46.95
LT D - RSI 30.02
LUPIN D - RSI 37.54
M&M D - RSI 39.55
MARUTI D - RSI 43.03
NTPC D - RSI 53.73
ONGC D - RSI 29.46
POWERGRID D - RSI 38.09
PNB D - RSI 28.22
RELIANCE D - RSI 51.52
SBIN D - RSI 31.78
SUNPHARMA D - RSI 45.96
TCS D - RSI 47.28
TATAMOTORS D - RSI 38.03
TATAPOWER D - RSI 25.88
TATASTEEL D - RSI 55.39
TECHM D - RSI 50.25
ULTRACEMCO D - RSI 44.96
VEDL D - RSI 35.75
WIPRO D - RSI 46.89
YESBANK D - RSI 29.34
ZEEL D - RSI 47.14


NIFTY - 50 components
Daily R.S.I. D RSI

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Open Interest (OI) in futures and options

Unread postby bhavin » Sun Dec 13, 2015 11:42 pm

Using Open Interest To Find Bull/Bear Signals



Many traders have been asking me question on my write up of FII Data analysis, Keeping all the question in mind i have prepared a cheat sheet which will help you in understanding my data analysis with more clarity.



1. What do you mean by Open Interest (OI) in futures and options?

When there is trade between a buyer and seller, a contract opens and all such open contracts are together called as open interest. So if Trader A have bought 1 lot of Nifty Futures expecting it to go up and Trader B have sold 1 lot expecting it to go down, that makes it 1 open contract and hence the open interest of 1.

2. How would you read when I write “Nifty futures went down with a huge addition of OI?”



OI will go up when more people start participating or existing people start adding positions. According to the OI theory, typically when a market is going in a particular direction and there is a huge addition in OI, this means there is more conviction in the move.
So if the market is falling and there is a huge addition in OI, this would mean that the existing short positions which are making profits are adding more and hence the fall could be bigger. But understand that this is only theory and may or may not work like this in reality.

3. What would you infer when I write said “ Nifty 6200 CE OI went up ”

While trading options, the money required to buy options is much lesser than what is required to write (sell first). So typically the people who write options are people having access to higher capital and hence the logic is that they are more proficient traders.

I guess it is important to also understand why retail traders typically buy options and institutions sell them?

Coming back to the query, when OI for 8000 calls is going up, there are new buyers and sellers (writers) coming in and since the writer is a more proficient trader as explained above, the belief is that he is probably right and better be on his side of the trade which is basically expecting Nifty to not cross 8000.
So if someone says OI on Nifty 8000 calls has gone up significantly, according to the OI logic it means that if Nifty is above 8000 it might come below 8000 and if it is already below 8000, it might find it tough to go above 8000.

4. What would you infer if someone said “OI on Nifty 6000 puts went up significantly?”



Similar to the explanation given above, since OI is going up on 7500 puts and because the option writer is more proficient generally, the belief would be that the market won’t probably go below 7500 and if it is already below 7500 it might bounce back above 7500.



5. If I sell 2 lots and there are 2 people X and Y who have bought 1 lot each, assuming we are the only people trading the contract, the OI is 2. What happens if X who has bought 1 lot sells it to another person Z, what is the OI now?

When X sold the lot he had bought from you to Z, a new contract was not created; the existing contract just changed hands so the OI will remain two. But if Z bought say 1 lot from anyone other than X and Y, then that would be a new lot and hence the OI will now go to 3.
Since in the query above a new lot was not created, the OI remains at 2.

6. If the market is going down and OI is increasing market could go even lower because of the OI logic. But aren’t both the buyers and sellers increasing, why can’t we look at it like new buyers are coming in so the market might reverse?

Assume the OI is presently 10 on Nifty futures and Nifty is at 7600. This means there are 10 lots long and 10 lots short. The market came down to 7500, so the buyers together have a loss of 50,000 (10 x 75 lots = 750 Nifty x 100 points = 70,000) and the people who are short have a profit of the same.

At 7500, OI went up to 20, basically doubled. When OI went up, either the people who were holding positions from before added or new people came in and bought and sold lots. If you were looking at all of this, which side would you want to be on, long or short?

Understand that at 7600, longs are sitting at 75,000 loss and are weak and shorts are sitting on 75,000 profits and are stronger. The most important logic to make money in the market is to be with the trend, be with the person/stock who is stronger. That is why we infer that if OI went up significantly when market goes in a particular direction, the direction might continue for much longer.

7. Logic behind assuming that if the OI for 8000 calls went up significantly, markets might not cross 8000?

The whole theory of Open Interest conspiracy on options is based on the fact that the buyers of options are mostly retail who are probably not experienced and the sellers/writers are institutions who are more proficient and have been doing it for a while. So if you had to bet, be on the same side as the proficient one because the odds of winning go up.

So when the OI for 6200 calls is going up, there are new buyers and sellers coming in and since sellers are more proficient traders we assume that they are right and hence the market may not go above 6200

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oi ( bear / bull )

Unread postby bhavin » Sun Dec 13, 2015 11:57 pm

P - PRICE
V - VOLUME
OI - OPEN INTEREST

IF P⬆ V⬆ OI⬆ then BULL

IF P⬆ V⬇ OI⬇ then BEAR

IF P⬇ V⬇ OI⬆ then BEAR

IF P⬇ V⬇ OI⬇ then BULL

BULL - STRONG
BEAR - WEAK


that's the funda of open interest

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Wonderla Holidays and Adlabs Entertainment

Unread postby bhavin » Sun Dec 13, 2015 11:58 pm

India Amusement Parks – Opportunities galore!!

 

The Indian amusement park segment is valued at $400m, compared to the $25bn global amusement park segment, offering immense growth opportunities. With rising income levels, increased domestic tourism and rise in discretionary spending, we expect the amusement park culture to pick up significantly as an alternative source of entertainment.

India amusement parks in a nascent stage of development. The Indian amusement park segment is valued at $400m (`25bn), expected to register a 20% CAGR over the next five years to `60bn, driven by new park development and favourable demographics. India has 150 amusement parks for a population of 1.21bn, offering vast potential for growth in the amusement-park segment.

Amusement parks to attract `170bn investment in the next 3-4 years. Investment of ~`170bn has been planned for 12 major projects over the next 3-4 years. These new parks, along with those in operation, will be major drivers of footfalls, expected to grow 10-15% to 75m-80m in the next couple of years.

Revenue composition skewed toward entry fees. In India, the greater share of revenue comes from ticket sales (75-80%); the proportions of revenue from the sale of food and beverages (F&B), merchandise and accommodation are small. On the contrary, our study of global parks suggests that ~60% of revenue comes from entry fees, the balance from F&B, merchandise, accommodation and others. We expect the percentage of non-ticket revenue to inch toward global levels due to the mounting consumer tendency to spend on F&B and merchandise.

Valuations. We see immense opportunities in the next 10 years in the development of amusement parks as an alternative avenue for entertainment.

We initiate coverage on Wonderla Holidays (Buy) and Adlabs Entertainment (Buy). 
Risks. Incidents at parks, extreme weather and a slowdown in the economy.

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porwal auto components

Unread postby bhavin » Sun Dec 13, 2015 11:59 pm

Porwal Auto Components

THE COMPANY-----Porwal Auto Components Limited ,A Joint Venture of VOLVO Group & EICHER Motors Limited,iz engaged in automobile components manufacturing. The Company operates in casted components, assemblies and sub-assemblies segment of the auto components industry. The Company manufactures a range of ductile iron, grey cast iron steel and steel alloy casting components, and subassemblies. It caters to the various sectors, including automobile, engineering, pumps and valves, agriculture and tractor equipment, construction equipment, machine tools and railways, among others. Its products are categorized under automotive part, earth moving, locomotive and heavy engineering machine parts. Its automotive products include axle parts, engine parts, chassis parts, differential parts and transmission parts.Looking to bright prospects in the solar industries and high consumption of power, The Company has set-up solar power generation unit in the financial year 2013-14 at village Kadodiya, Tarana Dist. Ujjain M.P. for captive consumption. By putting solar power generation unit, the company provides electricity units to Madhya Pradesh Paschim Kshetra Vidyut Vitaran Co. Ltd. (MPPVVCL) and receives the credit of the same by the settlement of electricity bill. During the year 2014-15 the Company has earned total receipts of Rs.402.94 Lacs form solar power generation unit.
VALUATION----The company has just started to post good performance as demands improve gradually.Within last two years Company Growth has been visible as quarterly numbers show.If you see Bottom Line,The company has posted 1.2 Cr Profit against loss of 60 Lac in last Financial Year.Investors who have will to invest for 3-5 years time horizon,should initiate at current market price.

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Dredging Corporation ......

Unread postby bhavin » Tue Jan 05, 2016 8:53 pm

Dredging Corporation (397):- Govt. is focusing a lot towards port development, inland waterways and river linking, so they are in a process of inviting tender for dredging. There are very few good companies in this space. Chinese and Korean companies are major competitors in this space but there is credentials issue. I think dredging corporation should be beneficiary of the same. Company has already done decent capex in last 2-3 years so as such there is no need for major capex hence good cash flow will accrue over a period of time. Soft crude prices will play a major role in ebidta margins. So as results of lower capex, better asset turnover and improving margins, its return ratios should improve considerably thus stock should be re- rated. BUY @ 370 - 420 for 600 - 700+.

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diwali picks posted on dhanteras day .... diwali to diwali

Unread postby bhavin » Tue Jan 05, 2016 8:58 pm

DIWALI MUHURAT PICKS 2015-16 :

1 BUY INDIGO T 1400 SL 700
2 GODFREY PHLIPS T 1500 SL 686
3 TORRENT POWER T 400 SL 150
4 HARITA SEATING T 1000 SL 299
5 MAZDA LTD T 650 SL 220
6 KSL T 225 SL 120
7 SANDESH T 1300 SL 600
8 ALL CARGO T 650 SL 255
9 FCEL T 40 SL 14
10 TRIDENT T 90 SL 31
11 DREDGECORP T 700 SL 293
12 TNPL T 350 SL 179
13 GEOMETRIC T 235 SL 122.

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diwali picks dhanteras day .... diwali to diwali FO SCRIPTS

Unread postby bhavin » Tue Jan 05, 2016 8:59 pm

DIWALI MUHURAT PICKS 2015-16 (FO) :

1 BUY M&M FUT T 1800 SL 1050
2 BUY ARVIND FUT T 400 SL 254.

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Nine words of Wisdom told by gurus of Investments

Unread postby bhavin » Sun Jan 17, 2016 7:13 pm

Nine words of Wisdom told by gurus of Investments

1.The investments made in bad times result in generating great results in future and Vice versa. 
Prashant Jain- HDFC Mutual Fund

2.I will tell you how to become rich. Close the doors. Be fearful when others are greedy and be greedy when others are fearful - Warren Buffet

3.In Investing what is comfortable is rarely profitable -Robert Arnott

4.If you have more than 120 or 130 I. Q. Points, you can afford to give the rest away. You don't need extraordinary intelligence to succeed as an investor - Warren Buffet

5.More money has been lost trying to anticipate and protect from corrections than actually in them-Peter Lynch

6.In the short run, the market is a voting machine, but in the long run it is a weighing machine. - Benjamin Graham

7. Risk comes from not knowing what you are doing - Warren Buffet

8.Unless you can watch your stock holding decline by 50% without becoming panic - stricken you should not be in the Stock Market-Warren Buffet

9.The best investors in the world have more of an edge in psychology than in Finance -Anonymous.

Can 't end without this

10. Compound interest is the eighth wonder of the World. He/She who understands it earns it.... he/she who does not.... pays it - Albert Einstein

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SAIL REPORT ..WEAK.......

Unread postby bhavin » Tue Feb 09, 2016 11:12 pm

Goldman Sachs : Steel Authority of India (SAIL.BO) Rs38.95: First Take: 3QFY16 results below expectations; debt increases

News 
3QFY16 EBITDA loss of Rs13.8bn was greater than GSe/Bloomberg consensus loss of Rs10.3/8.6bn on lower volumes, ASPs and higher costs. Net loss was Rs15.3bn. Net sales fell 20% yoy to Rs89bn (-3% qoq), mainly due to lower ASPs. Total EBITDA loss/PAT loss in 9MFY16 is Rs24.2/29bn.

Analysis 
1. Sales volume rose only 1% yoy to 2.9mt (+6% qoq) vs. GSe 3.15mt. Saleable steel production declined 5% yoy to 3mt (+13% qoq). It has guided for saleable steel sales volume of 12MT in FY16 (8.3mt 9MFY16) and 15.5-16MT in FY17E.

2. ASP and costs: Blended ASP fell 9% qoq to Rs30,825 (-21% yoy), a greater decline than GSe. Net sales realization (NSR) declined 7% qoq to Rs26,800/T (-24% yoy). Cash cost/T was 2% higher than GSe at Rs35,588 (-4% qoq, +3% yoy) due to higher power and other expenses. EBITDA/T loss was Rs4,764/2,903 in 3Q/9MFY16 (Rs3,146/T loss in 2QFY16).

3. Capex and net debt: Capex for 9MFY16 was Rs45bn. SAIL expects capex of Rs65/40bn in FY16/FY17. Net/gross debt at quarter-end was Rs36.4/34.4bn. Net worth at the end of 3Q was Rs406bn (Rs98/share).

4. Impact of MIP: According to SAIL, MIP is likely to subsume safeguard duty but basic customs duty would remain in place. SAIL has already taken a Rs500-1,000/T price hike on the back of MIP. They will gauge market conditions for any further hikes.

5. Tax: SAIL has been claiming tax credit on investment allowance for the past four quarters (Rs7.3bn in 3QFY16).

Implications 
We maintain our Sell rating on SAIL as we expect it to have structurally low ROE for the medium term. Given its 100% integration of iron ore, we believe SAIL is worse off than competitors in a falling iron ore/steel price scenario. We place our estimates and target price under review.

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