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

Sail Boat VS Power Boat

We, as a person are shaped by our experiences. In the journey of life, incidents happen which truly alter your outlook towards things. I too have had many such incidents in my life.

Not sure what has prompted me to share this personal stuff with the world, which only a handful know. Nevertheless, here it goes.

I have been an adherent fan of Jagjit Singh saab, mesmerized by his soulful voice ever since I was in 8^th standard in school, must be around 13 years of age or so. The poetry is something I cherish and at times I do pen a few. Fact that a poet does not live within the bounds marked by the society, gives him wings to think and speak about things which are often left untouched by our regular mindset.

It was fag end of 1995, not even one year out of college and like any other guy I was trying to find my feet in this world where one needs to earn his living. The world has started its wheels for change, cable tv has just started a few years back. From the days of just one or two channels of Doordarshan, suddenly we had slew getting used to a bunch of them. In those days, on Zee Tv a prominent name, a series used to air named ‘SAILAAB’. 

The title track of that serial was ‘Apni marzi se kahan apne safar ke hum hain’ composed by janab Talat Aziz and sung by Jagjit saab.

Like I mentioned, my college days had just come to an end and logically I should have channelized my efforts towards building my career yet I fell in love with a girl. Yes, madly in love…wait a minute, it happens you’ll say, yup!

As they say, time flies in happiness, it sure did. It was summer of 1996, mobile phones were very much introduced in India, I didn’t have it then. I used to have a pager, yeah quite extinct now. 

So one fine evening, I received a page, having an SOS code from my girlfriend. I called and heard her sob, my heart sank, all sorts of thoughts flashed my mind. In her breaking voice, he told me, her father is going in the morning to see a guy whom he chosen as her would be groom. I told her not to panic and we shall do something. Her reply was, it’s over...somewhere she had given up.

After disconnecting the phone, I was clueless, had no idea what am I going to do next. Everything seemed gloomy, there were way too many issues to iron out and yes it does felt like everything is over.

Came back home and this serial had just started at its regular time. Like every other time, I was listening to ‘Apni marzi se kahan apne safar ke hum hain….Rukh hawaon ka jidhar ka udhar ke hum hain’ the title track. 

I had tears, no shame in saying so. My mother, who has been my hero and biggest strength could make out, something is wrong. We discussed evening’s incident and she asked me, what do I want to do next?

अब यहाँ ज़िन्दगी के उस मोड़ पर मेरे सामने दो ही रास्ते थे...

या तो मैं यही मान लूँ के ये कहानी यहाँ ख़त्म या फिर अपनी ज़िन्दगी को हवाओं के रुख पर न छोड़, अपना नया सफर यहाँ से लिखने की कोशिश करूँ 

मुझे नहीं पता था आगे क्या होगा, कामयाब रहूँगा या मुफ़्लिसी नसीब होगी पर ये बात तय थी कोशिश करे बगैर नहीं मानने वाला

For non-Hindi readers, simply put I had to act, either to give in, surrender against the winds and let my lifeboat sail away OR try put an engine in my lifeboat, kick start and make it a power boat.

I am so very glad, I chose the latter.

Next morning, I along with my mother knocked my girlfriend’s door at 0700 hrs. Met her parents and she was pleasantly shocked, to see us there. 

Never she imagined, I could do something like this. I saw, in her eyes, I had won her all over again.

As they say, rest is history and that girl became my wife. We look back and smile on those moments. God has been kind to us, indeed.

Now, you must be thinking, why have I bored you with this non-market stuff.

Let me tell you what was the biggest takeaway for me as a person: I won’t ever give up without a serious try. I’ll play against the odds if I have to, without being concerned about the outcome. I’ll never be a SAIL BOAT but a POWER one.

Then let’s see, how far I travel, am sure God would be kind enough to put winds behind me.

Thanks for being patient reading a small part of my life.

Youtube link to beautiful: Apni Marzi Se Kahan Apne Safar

Out of flavor...for how long?

Hey oil, the world is going electric. Who wants you Mr. ONGC ??

'Theme', what a beautiful word it is. Every sense of yours reacts to it, even the 6th one. A slight whisper and your heart crave to know more about it. Your mind starts to connect the dots (even if ain't there). A castle is well constructed and you start living in it. Sounds nostalgic, right? It happens every damn time.

Right now, as we speak, going electric is the buzzword. No one wants the dirty, sticky fella known as OIL. Nope, there is nothing wrong is staying with the theme, after all, as they say, the trend is your friend, ride it.

Let's for a moment, try and find out IF it's really the end of the stuff which puts life in my Harley (yeah, I am a showoff)

I shared my thought with few people recently on 14th September. Putting it together out here.

ONGC monthly chart

Rationale: As one can see, past four months, the stock has NOT broken important Fibonacci level. The lowest it went 155.20 in June. As per Cup and Handle guidelines, if it doesn't fall any further, it's a great time to accumulate. A tip: RSI is in process of making a W on monthly time frame

Remember, in probability we are looking it as bottoming out candidate and NOT a breakout one, therefore patience is the key. We might see it reaching the white horizontal line over next few months. It turned ex-bonus on 15th December, 2016 and since then it's a forgotten guy. 

How to play here? I've made a rule for myself, if it suits you, sure use it. The rule is: I'll buy X number of shares every day. Yes, it's my everyday SIP, till a certain level is not breached.

CRUDE monthly chart

As mentioned, crude is now in a tight price range and has formed a symmetrical triangle. Any breakout on the upside would open the doors for a good target. This shall act as a catalyst for ONGC.

Meanwhile, a few articles I read, just google and they'll present themselves.

A question in my novice mind, why ramp up production, when/if there is no increase in demand going forward? And with an OMC under its belt, there would be a better synergy of resources, isn't it?

While there's still some time for me to hop in a Tesla, I'll continue to pour this dirty, sticky oil in the tanks of my rides which ONGC digs out.

Oh BTW, I am making some money riding the 'electric' theme, which eventually is paying for both ONGC and what it produces.

Thank you

What's brewing in my cup?

Every time is TEA time

Before going further, its important to understand, a few basic stuff about tea. There are two main styles of tea produced across the world.

Orthodox tea and CTC tea

Conventionally speaking, orthodox tea refers to loose-leaf tea that is produced using traditional (or orthodox) methods of tea production, which involve plucking, withering, rolling, oxidation/fermentation and drying.

CTC (Crush, Tear, and Curl or Cut, Tear and Curl) is a method of processing black tea in which tea leaves are passed through a series of cylindrical rollers with serrated blades that crush, tear, and curl the tea into small, even-shaped pellets.

There are three main differences between the orthodox tea and CTC tea.

The intent of production

Orthodox method of tea production is more focused on preserving the singular virtues of the leaf while CTC tea is about ensuring faster production of homogenized, consistent tasting tea.

Tools and methods of production

While orthodox tea makes use of traditional practices, which can be time-consuming and require a lot of human intervention, CTC method is a faster way of producing consistent tasting tea. For making CTC tea , leaves are fresh, whole leaves are fed into the CTC machines which crush, tear and curl them and process them in a period of just two hours. The resultant tea is even and looks like small brown nuggets.

In Orthodox processing, every batch of plucked leaves is treated to a precise amount of withering, rolling and oxidization, decided by trained tea professionals so that the best flavors can be extracted out of the leaves. Care is ensured while rolling and handling these leaves, because they are of a delicate nature, highly susceptible to adulteration and damage.

The flavor profile of the tea

Compared to a CTC tea, orthodox tea offers the most authentic tea experience. Orthodox teas, be it black, green, white or oolong, are known for their flavor complexity and delicate make, much the reason why they are highly prized in the world tea market.

Freshly produced orthodox tea benefits its drinker in far more positive ways than a CTC tea, especially in regards to health and wellness. The latter class of tea, on the hand, is generic tasting and produces strong, dark liquor with a distinctly astringent flavor profile. Also, CTC tea accommodates the addition of condiments like milk and lemon far better than orthodox teas.

Now lets come to the business called Tea

China is the largest tea producer in the world followed by India, Kenya, Sri Lanka and Turkey.

As shared above, its mainly between Orthodox Tea and CTC. Sri Lanka with shipments of 301 million kgs (2.8 Green) in 2015, is the major player in the market for Orthodox Black Tea, with Kenyan combined origin Exports of 443 million kgs dominating the overall CTC Black Tea segment.

A review of globally-traded tea reveals that Asia’s’ two producer giants are also the largest consumers and are overshadowed by African producers who supply the greater volume of tea exported.

Sri Lanka production outlook 2017 

Specialists suggest that La Nina conditions could continue through Q1 2017 and have projected uncertainty over rain fall patterns. Failure of the North East Monsoon in Q4 2016 ads further pressure to the already fragile supply situation. Delayed agricultural practices and low application of fertilizer could have an impact on crop intakes in Q2 2017 as well.

Market outlook 2017 

The rapid shortfall of Orthodox Black Tea from Sri Lanka from mid-June 2016 and some loss of crop from South India triggered price increases at other auction centers. Kenya enjoyed a bumper crop and more than recovered its 2015 losses. Following a sharp correction that lingered till mid-May, Mombasa auction prices picked up thereafter and closed above the years’ opening rates.

Both Sri Lanka and South India will have similar weather conditions which are expected to be uncertain at best during Q1 and probably until mid or end June. Sri Lanka will find the going tougher due to lower fertilizer application and weedicide issues.

Kenya and other African producers and North India could have another good year of crop; resulting in high CTC availability. The supply of Orthodox Black Tea to the Colombo Tea Auction and worldwide could well remain low till June. Sri Lankan exporters’ inventories have been depleted from June 2015 and their clients’ stocks of Ceylon Tea in the value chain too will also continue low.

Key forces that could influence 2017 

India in particular is just waiting to seize its opportunity with subsidies being offered for Orthodox expansion. The market for India’s Ceylon substitutes even though of a lower quality profile strengthened in 2016 and are likely to attract more interest during Q1 2017. Kenya’s’ rising cost of production and oversupply could compel accelerated exploration of Orthodox alternatives. At the same time Kenya’s small holders are looking at alternative crops for better financial rewards.

Have a look at the following two charts

These two charts clearly shows the tea prices are on the rise in international markets, yet to achieve prices of year 2015 highs.

How the charts of few Indian players look like

Goodricke

B&A

Warren Tea

Dhunseri Tea

BBTC

CCL Products

Duncons India

Gillanders

Jaysree Tea

Tata Global

Rossell India

Information as stated at Rossell Tea website

Orthodox tea fetches better prices internationally and owing to shortfall of orthodox tea in Sri Lanka, all the players such as Rossell India who are mainly engaged in producing orthodox variety of tea, also are in business of export are strategically well placed to gain good.

To make it a little interactive for the readers, I've pointed out Rossell India as a suitable case which combines TA+Pointers to what kind of business they are in and they do export too. By the way Rossell India features in List of Top 50 India Tea Exporters

Would like to receive inputs about the companies I've mentioned/not mentioned. Any interesting piece of info is welcome.

A few charts, don't indicate entry/exit price, well I've reserved that for all those people who open an account at my broker under my franchisee.

Cheers!!

On a lighter note

चाय वालों के दिन अच्छे चल रहे आजकल