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BEST TOP 5 STOCKS FOR YEAR 2010 – KEEP YOUR EYES ON THESE STOCKS.

INFOSYS TECHNOLOGIES    CMP : Rs.2670.45
RELIANCE CAPITAL               CMP : Rs.763.55
BHARTI AIRTEL                       CMP : Rs.302.00
HERO HONDA                            CMP : Rs.1945.25
HDFC                                             CMP : Rs.2782.55

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If a Stocks is in the down trend, but the Momentum indicatiors (like Stochastic, RSI and MA) generate buy signal in some interval of time due to
oversold position. we required your guidance on the following points:
1) How to determine the right time to buy stocks?
2) How to find out the down trend is over or price reversal?
3) Please Suggest us some good technical indicator to overcome the above issues.

It’s totally depends on the timeframe of the downtrend,if we are talking about the stocks is in a downtrend and daily charts,it means thats making lower pivot highs and lows, and the momentum indicators on that daily charts tells you it’s oversold, So what is right time to buy ? … The right time to buy stocks would be if we make a higher pivot low and when you get confirmation once a previous pivot high is taken out. So always remember the important thing is PRICE,PRICE and PRICE.

Second question is answered by the answer to first question as above.

Does there any good technical indicator availiable to overcome these problem?

No …..Always stay with price, pivots and trends. An indicator may at best confirm to you what you should already be knowing.

For eg. We have a strong uptrend technical indicators which usually tell us that we are overbought, what do we do with that?  Nothing!

We hold……The uptrend gets stronger and stronger. The indicators continue to be overbought. We Hold….. Now we start breaking previous pivots, We Sell, whatever the indicators tell us.

My suggestion: Learn Market Trends, Pivots and Chart Patterns…..then always go with the flow of the trend. But keep learning about the various indicators. Because they may come in handy in shorter time frames.

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Richard Weissman introduces the reader with a process-driven approach to trading. In addition to the development of mechanical trading systems, the significance of trader psychology is discussed throughout the book. Mr. Weissman calls it the framework of “reprogramming the trader.” He provides a clear understanding behind the conceptual development of mechanical trading systems as well as demonstrates possible mistakes by system developers and ways to avoid them. His main lesson for the reader is that flexibility enables traders to succeed in all kinds of trading environments.

Dispelling Myths and Defining terms

In this chapter the author emphasizes more on mathematical technical analysis than classical technical analysis. He also explains why mathematical way of analyzing is an ideal component for mechanical trading systems than fundamental or interpretive analysis and thus claims this as an apt method for generating profits

Mathematical Technical Analysis

Introduces the two basic flavors of mathematical technical indicators which are mean aversion and moving averages. The chapter also explains how these indicators can be transformed into comprehensive trading systems through the inclusion of various risk quantification parameters such as volatility bands and percentage value of trading instrument.

Trend Following Systems

By going through this chapter one can figure out how even a simplistic of the systems can produce a respectable rate of return while enduring relatively moderate worst peak-to -valley drawdowns in equity. The reader can also understand why certain asset classes tend to trend more than others

Mean Aversion Systems

Examines why certain asset classes display a greater propensity toward mean aversion than others and includes examples of no directionally biased mean aversion systems and mean aversion systems that employ a trend following filter.

Short term Systems

One can understand what short term volatity really means by going through the concepts of swing and day trading. It helps the reader to explore what unique personality traits are needed to overcome the same.

Knowing Oneself
Provides the reader a comprehensive review of major categories of trader types (trend following, mean aversion) as well as the typical time frames (long term, day trading, swing) in which they operate. Helps the reader to identify the flaws in trader psychology. Once the reader has identified their innate trading personality, a step by step transformational process via utilization of different types of mechanical trading system and psychological tools is outlined

System Development and Analysis

This chapter examines some of the benefits and limitations of mechanical trading system, optimization studies, development of trading system philosophy statements and the pros and cons of various methodologies for measuring trading system performance. It also looks at the downside to system development and how to resolve these problems: data curve fitting, parameter curve fitting, data integrity issues and slippage.

Price Risk Management

Discusses the various price risk management methods such as stop loss and volumetric price risk management .Coverage of volumetric price risk includes both Martingale and anti-Martingale position sizing techniques such as frictional position sizing and value at risk. Other techniques covered include the study of worst-back tested peak-to-valley equity draw downs, static volumetric tests, stress testing and system losses as a percentage of total equity under management. Finally the chapter examines the psychological aspects of price risk management and shows how utilization of mechanical trading systems can aid in fostering confidence during draw downs.

Improving Rate of Return

In this chapter the author discusses how can one improve the overall rate of return by using these three methods

• Addition of various low or negatively correlated assets such as foreign exchange, crude oil and futures
• The staggering of parameter set trigger levels for the same system
• Combination of mean aversion and trend following systems within a single trading account

Discretion and System Trading

This chapter examines how a trader’s knowledge and experience can be utilized within the framework of mechanical trading system

Psychology of Mechanical Trading

Here the author relates the link between mechanical trading systems and transformational psychology, explaining in detail issues such as self worth, single-mindedness, discipline ,non attachment to result’s of one’s actions and realizing of old emotional patterns.

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NIFTY MOVEMENT ON 3rd December 2009

Now the Major hurdle for NIFTY is 5175 that is very strong resistance level for nifty, If Nifty breaks 5175 level then next target for nifty :5250-5275,so be cautious till it crossed 5175 level

The Major Supports for NIFTY are as follow 5055 and 4975.

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Market Outlook on 2nd Dec 2009

The Nifty was up 1.25 points or 0.02% at 5123.25. It has touched an intraday high of 5161.75 and an intraday low of 5111.75.

The Nifty closed flat at around 5120 after a volatile session. Buying interest was seen in to realty, auto, banks, and pharma stocks while FMCG, capital goods and power stocks witnessed selling pressure. Infosys, ICICI Bank, SBI and HDFC Bank were the positive contributor to the SENSEX while Reliance, L&T, HDFC and ITC were the negative contributors.

Top gainers
Tata Motors at Rs 728 up 3.89%,
Ranbaxy Labs at Rs 486.75 up 3.70%,
DLF at Rs 382.10 up 3.05%,
Maruti Suzuki at Rs 1,606 up 1.12%,
HDFC Bank at Rs 1,807 up 1% and
SBI at Rs 2,303 up 0.47%.

Top losers
Sun Pharma at Rs 1,488.80 down 3.25%,
HCL Tech at Rs 329.80 down 3.17%,
Siemens at Rs 524 down 2.37%,
Reliance Infra at Rs 1,060.30 down 1.89%,
HDFC at Rs 2,752.90 down 1.75% and
ACC at Rs 795.35 down 1.52%.

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Nifty Movement on 28th Nov 2009

4792 & 4745 ARE TWO MAJOR SUPPORT FOR NIFTY &, IF NIFTY CLOSE BELOW TO THIS LEVELS THEN IN COMING DAYS THEN NIFTY WILL COME DOWN TILL 4500.

BUY NIFTY ONLY WHEN NIFTY CROSS 5000 level Mark,Safe levels to Buy NIFTY 5022 and 5047 then Nifty will hit to 5175 – 5250.

Market Outlook on 27th Nov 2009

The BSE Sensex and the NSE Nifty closed with losses of around 200 points [1.2%] and 60 points [1.2%] respectively. Stocks from the mid and small cap spaces also followed suit. The BSE Midcap and BSE-Smallcap indices closed lower by around 1.3% and 2.1% respectively. The rupee was trading at 46.72 to the US dollar at the time of writing.

In the late afternoon session, the markets extended its losses owing to more than 3% fall in the Chinese markets. Subsequently, in the last session the gauge continued its journey downwards and touched the intraday low of 16,808.87, owing to weak European markets and larger than expected rise in annual food inflation.

All Asian markets closed weak today. Hong Kong and Korea (each down around 5%) were the biggest losers. Following these were the markets of Japan (down 3%) and China (down 2.5%). Investors also curtailed their exposure to commodities amid uncertainty about the global fallout from Dubai’s financial troubles. This led to oil prices falling by around 4.5% to near US$ 74 a barrel.

Looking at the Indian markets, these faced the ire of investors who now fear another round of defaults and credit crisis around the world. In fact, today’s decline in banking stocks said it all. The BSE’s banking index fell by around 3.3%, second worst to the realty index that closed down by almost 4%.

Nifty Today’s Close : 4,898.40, If it moves further and breaks the 4925 Support level then you will see nifty might touch 4975 – 5000 levels in coming days

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You May have tried to follow the market letters and like many other either lost money or failed to make profits, because the market letters give a list of too many stocks to buy  or sell and you picked the wrong one and lost.

A smart man can not follow another man blindly even though the other man is right,because you can not have confidence and act on advice when you do not know what it based on. You will be able to act with confidence and make profit when  you can SEE and KNOW for YOURSELF why Stocks should go UP or DOWN.That is why you should take a Course of Instructions and prepare yourself to act independent of the advice of others.

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5 Steps to Become Expert in Forex Trading
Step 1

Join Tips4Trade for Forex trading technical course, Some websites have a minimum of $200 investment, and some of them have practice accounts where you can work on your trading skills.

Step 2

Update yourself on frequently used terms in the Forex Trading world, such as ‘intraday’ and ‘overnight position,’ which relates to the trading times.

Step 3

Study the economic and political market trends and stay up to date on current events. The best Forex traders have very good knowledge on trends and other economic traits. This can take some time, but it’s rewards are great.

Step 4

Invest in a bot. If you don’t want to go deep into studying the trends and such, you can buy a bot that recognizes trends and advises when to buy and sell. You want a bot that is frequently updated to optimize trading strategies.

Step 5

The last and final step is to give yourself time to get used to forex trading. It may take a long time to understand the Foreign Exchange.

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How to Make Profit from Stock Market

1. Prior selecting a broker you should have to do proper online research about broker, through your friends and colleagues. Find a well established brokerage firm for investing in to stock market.

2. Work with the firm’s investment guru /consultant to customize your investments that suit to your risk profile. If you have 15 to 20 years or more to retire, then you may be able to be much more aggressive with your investment approach.If you are very near to retirement age you should adapt defensive approach for investing your capital.

3. Once you have established your good relation with a broker, be sure that you will receive monthly or quarterly statements from them that will give updates on your investment’s performance. If required then you can make adjustments to your portfolio.

4. Decide in advance with your financial consultant an annual or other time period in which you will sit down and discuss together to review your portfolio performance.

5. Review your profile always to see if your risk profile has changed, and make the necessary adjustments in your investments.

6. Be very clear about your investment objective before you invest your money.

7. Make sure which kind of trader you are such as Day Trader, Swing Trader, Short term Investor, Medium term Investor or Long term Investor.

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SAR : A technical analysis strategy that uses a trailing stop and reverse method called “SAR,” or stop-and-reversal, to determine good exit and entry points.

Introduction: Developed by Welles Wilder, creator of RSI and DMI, the Parabolic SAR sets trailing price stops for long or short positions. Also referred to as the stop-and-reversal indicator (SAR stands for “stop and reversal”), Parabolic SAR is more popular for setting stops than for establishing direction or trend. Wilder recommended establishing the trend first, and then trading with Parabolic SAR in the direction of the trend. If the trend is up, buy when the indicator moves below the price. If the trend is down, sell when the indicator moves above the price. Calculation: The formula is quite complex and beyond the scope of this definition, but interpretation is relatively straightforward. The dotted lines below the price establish the trailing stop for a long position and the lines above establish the trailing stop for a short position. At the beginning of the move, the Parabolic SAR will provide a greater cushion between the price and the trailing stop. As the move gets underway, the distance between the price and the indicator will shrink, thus making for a tighter stop-loss as the price moves in a favorable direction.

There are two variables: the step and the maximum step. The higher the step is set, the more sensitive the indicator will be to price changes. If the step is set too high, the indicator will fluctuate above and below the price too often, making interpretation difficult. The maximum step controls the adjustment of the SAR as the price moves. The lower the maximum step is set, the further the trailing stop will be from the price. Wilder recommends setting the step at .02 and the maximum step at .20.

Example :
The chart for Suzlon Energy in Nov.2009 shows how the Parabolic SAR can catch most trends and allow the trader to profit from the buy/sell signals.
A proper interpretation of this indicator would suggest that a trader should close long positions when the price falls below the SAR (red arrow) and close short positions when the price rises above the SAR (green arrow)

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The following books related to stock market you “must read” for those investing or trading in the stock markets. These books contain valuable information which will help to minimize risk as well as increase returns.

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