Everything is in price

Indigo: Dare to fly?

They say everything is priced in and many a time, how true it is. Let's see what's in store this time.

So the stock in question is falling past six months or so and now results are out for quarter ending June 2018.

Sure they didn't look good and market gave another slap to this already beaten down guy. As expected, it opened GAP down on 31st July 2018.

An interesting thing happened during the day, a tussle between the sellers and buyers (hopeful/value seekers/informed)? As a result at EOD (end of the day), we had a DOJI candlestick.

Now before we go any further, there must be a question in your ever curious mind.

Why RB has written a post on this stock?

Kindly read on:

Something prodigious caught my eye and I thought of sharing the same.

In the world of candlestick patterns, there is one known as 'Abandoned Baby'. It can be both bullish/bearish. Prior trend before the occurrence of this is of utmost relevance.

In simple terms, if the prior trend was bullish i.e. stock was going up and Abandoned Baby happens its considered bearish for the stock and vice versa. It a trend reversal scenario.

In the above picture, you can see four things:

1. The prior trend is down
2. GAP DOWN candlestick on the second day
3. GAP UP candlestick on the third day
4. NO overlap between candles in the box, clear gap present

Now here is the Daily TF chart of INDIGO

You can see in the above chart few similarities which point towards a probable setup of:

Abandoned Baby Bullish

Notes are mentioned on the chart, compare with the textbook example posted above.

Nowhere I am having any bias (positive/negative) towards this stock, all the more am curious to see how things shall unfold.

There is a small caveat here between the textbook example and real scenario. What's that? That's for you to tell me ;)

So, tell me Indigo, do you surrender with clipped wings or would you dare to fly again?

Cheers!!

Who is the ruler of my life? YOU

We live for others (not in a positive way). It's sad yet true. 

As a person, I see people are losing out on one of the basic ingredients of life: TRUE happiness to self.

Let me try and explain my view through two instances, recently happened in my life.

First instance

A few days back, I went to a QSR and a lady ahead of me ordered a 'Soft Serve Cone'. Sure, a great choice, considering being in an oven during summers of Delhi.

As she left for her seat, I being next in line placed my order. A few minutes later, my stuff came in and I headed to my table.

Sheer chance, me and that lady had opposite tables. I couldn't help but notice, she had her cone in one hand and mobile in other. All she was interested in clicking selfies with all sorts of face gesture wth ice cream cone in the frame.

I was amused, boy I was. She used to click a few in a burst, check those pics and seemingly not satisfied, start all over again, while yet to have a taste of that humble ice cream.

This continued for a while, till I think she managed to click what she was looking for. 

Then started the next innings of the experience. I am sure, she must have posted the 'desired' pic on some social media as replies started poping in. The look and happiness on her face was telling me, she is being 'liked' on the social platform.

Again to remind you all, the ice cream more or less had given away. It was half melted and clearly she had lost her interest in it, or rather, she never had any interest in it to begin with.

A few points:

• She got herself a product to enjoy OR she only wanted it to 'show' people that she is enjoying it.

• Which is more relevant here, to give oneself pleasure of having an ice cream in scorching heat OR to pretend having one to score some 'likes' and 'wows'. Where is TRUE happiness?

Second instance

A close relative with his family went for a forgien holiday. Nice choice again, a getaway to cool Europe during Indian summers is always pleasant.

As I know this guy quite well, I wasn't sure if he can afford this 20 day overseas holiday. Here I want to stress, having money and affording to spend on something are two very different things.

Anyway, I am sure everyone knows best about their life. However, when people tend to overlook the responsibilities and give in to peer pressure, that's where derailing starts.

In the society of 'pretendence' where most of us live in, peer pressure makes you live stupid and makes you an idiot.

As their holiday progressed, I saw numerous pics of them having expensive whiskeys, shopping bags of various malls. Meals at finest of places.

Again, I couldn't help but ask myself ( I know I am a moron) Are they doing this to make themselves happy OR they want to show how happy they are? There's a world of a difference between these two.

Once I asked, whats the rationale behind sharing pics of expensive labels on WA and other social media? I was told, as their friends put such pics everytime they have kitty parties or get together, this is their way to tell the crowd that 'we have raised the bar'. In a way, you are not sharing your happiness but promoting the element of 'ENVY ME'.

As he got back after a 'satisfying holiday' and we met over drinks, just after 2nd one, he started brooding 'bahot kharcha ho gya bhai, itna to socha hi nahi tha' (Too much money spent brother, never thought of).

This is what I was refering to: Having money vs affordibility.

In a nutshell, most of us live a fake life and in process have abandoned the inner self. Two ends of the spectrum, a ₹25 desert to ₹5 Lac holiday make a part of it.

Amazing, just amazing. I simply bow to this life of pretendence where every step taken crushes beneath your own desires and kills the very basic element of happiness.

Thank you uparwale, for making me what I am, A MORON.

Thank you for your time.

Cheers!!

Nifty's tryst with Fibonacci

As I started my journey on TA, came across many chartists, who seem to be ever consumed by 'catching the tops/bottoms'. Soon I realized, they are idiots, yes idiots. I don't need to name anyone, markets have proved them as one, they themselves know, who they are.

I too have made many mistakes, I still make but I do try and make an effort to rectify and get over it ASAP. Yup, its easier said than done, but please never stop putting the effort rather trying to be 'mainebolatha.com'

Before going forward, let me tell you, I am a big fan of Fibonacci, helps me to evaluate things as intended by nature, through is mystic laws.

As you might be aware, Fibonacci has various ratios, which can be plotted on charts. We use these ratio's to get an idea about the depth of fall/rise of an instrument.

As the instrument retraces, being a bull, it's hoped that the fall would halt at a shorter ratio rather going at a deep one. In Fibonacci, 50% is not a ratio as per series but represents DOW theory. If an instrument halts the fall at 50% and resumes the up move, its considered quite bullish.

Here are few charts, where I try to understand things as they happened in past and what we can draw for the future. They all are NIFTY weekly charts.

Chart 1: A big up move from 2004-2008 and then the fall which went all the way to 78.6% (Global Meltdown)

Chart 2: Big move from 2009-2010 and then the fall, but this time it stopped close to 50% and resumed the up move.

Chart 3: Big up move from 2011-2015 and the fall which again got arrested at 50% and resumed its up move.

Chart 4: Up move from Mar, 2016-Sep, 2016 and comes the fall, again stopping at 50% and resuming up move.

Chart 5: A BIG up move from Dec-2016-Feb2018 (from demonetization till present times) and a fall, interestingly, I see many guys calling this fall bottoming out, but is it if we get any clue from the past?

Combined chart of all the above ones

For myself, I am not interested in:

~Hearing those 'top/bottom catchers' it's just an ego massage.
~'Buy the dips' screamers, only to see another dip if it's in cards.
~'Bhakts' who are blind and have a loud mouth.
Markets shut everyone.
~People who give 'n' examples as to how a marquee investor made 10x/100x/1000x from his holdings. Please don't preach how to be an ape, rather cultivate what's best for you.
~People who carry an opinion, on every/any damn topic related to markets especially.

I never understood, what's the shame in saying/accepting 'I don't know'. It opens the door to understand/learn something new, rather being 'I know all, fool'I don't know, where this fall shall stop and I don't want to speculate either. I care a damn if people say, corporate earnings are improving, various data is pointing towards rosy things and so on.

They have their arguments, I have a simple question for them, 'Are you more informed/intelligent than markets?' If the answer is yes, I have nothing to say, other than wishing them good luck.

All I have learned so far, markets know all, markets know best.

Kill The Bias.....For Good

Like most of the people, I've come across, I too carry a set of bias in my mind. Over the years, after going through numerous charts, all I can do is kick myself a hundred times....why the hell, do I clog myself with them.

Answer, I could come up with after lots of soul searching: Raja...my friend, you tried to be extra smart and heard a lot of noise on social media, paid attention to lots of 'I know all...gyani babas'. They know BELL ;)

Solution: Kick those 'gyani babas' out, especially ones who carry an opinion on everything, listen to a selected few, chances are you won't be kicking yourself anymore. Secondly, just play smart, get rid of 'extra'

Plan of action: I'll be buying those stocks which clear MY checklist based on the charts, both from NSE and BSE. I shall put X amount in those, once a decent gain is done, shall look to sell half the quantity, taking my principle out to be further deployed as next opportunity arises. Would also maintain a trailing SL, if hits EXIT, even if I have to close the position in a loss.

To keep things simple, would document my purchases in a Google Sheet, which would be updated regularly.

I'll update this post with the link to Google Sheet soon. Link: Click Me

Hope my novice ways deliver something good.

Disclaimer: This is ONLY intended, to keep and maintain a journal of my Kill The Bias portfolio. I am nowhere asking anyone to replicate/initiate a BUY based on my workings. Consult your financial advisor before taking any decision.

Cheers!!

Raja's Ribbon

The following work of mine is inspired by Guppy Multiple Moving Average (GMMA). However, I've tweaked it, over time to suit my trading style. Still, I think a lot needs to be done to make it even better than its present form.

Before going further, let me give you a brief outline about GMMA. The following is taken from Investopedia: 

DEFINITION of 'Guppy Multiple Moving Average - GMMA'

An indicator used in technical analysis to identify changing trends. The technique consists of combining two groups of moving averages with different time periods.

One set of moving averages in the Guppy multiple moving average (GMMA) has a relatively brief time frame and is used to determine the activity of short-term traders. The number of days used in the set of short-term averages is usually 3, 5, 8, 10, 12 or 15.

The other group of averages is created with extended time periods and is used to gauge the activity of long-term investors. The long-term averages usually use periods of 30, 35, 40, 45, 50 or 60 days.

Read more here: Guppy Multiple Moving Average (GMMA)

While being sure, there is NO HOLY GRAIL out there, I try an make an attempt to close the gap.

In my setup, I use in all 6 moving averages, 3 belong to the short duration, coloured BLUE (they change red as trend changes for downside) and other 3 belong to the longer time frame (TF) coloured Green. 

Together as constructed, I call them Raja Ribbon.

Short TF ribbon: These are players having a trading outlook.
Long TF Ribbon: These are players who are on the investing side of the game.

Nope, I don't use the BUNCH of short and long TF like in GMMA.
Nope, I don't use Exponential Moving Average (EMA) like in GMMA.
I use simple trendlines, not on price but on the ribbon.
I look for Caps and Bowl, more so when both ribbons are getting together, namely traders and investors.

People with trading mentality ALWAYS lead the trend, however, it gets the seal of being a secular one once those with investing mindset joins them and they are in the union.

Raja Ribbon tries to denote the sentiments in an easy visual form.

I use this setup mainly on Weekly TF, in order to find an almost definite change in the trend of the instrument. Like I said, there is NO Holy Grail, therefore one needs to apply a very important and prominent indicator, unfortunately not present in any charting software, named Common Sense.

What I look for in the setup?

I use trendlines on short TF's ribbon also keep in consideration the placement of short TF ribbon in context of longer TF ribbon. Both the ribbons need to be taken as a whole and not in singular fashion.

Here is an example of TATA Motors from July 2013 till present.

ONGC

Tata Steel

Jet Airways

Nope, it's not a fool-proof setup. It has its shortcomings, like any other system based on moving averages, which tends to fail during the sideways market conditions, BUT to reduce the failure rate, I don't use EMA.

The setup DOES meet its goal of finding quite a possible trend reversal in the instrument on a medium to long-term TF.

I am still working on it, hopefully soon, shall have better results.

Thank you