Wednesday, August 27, 2014

Breadth


The breadth has started to pick up again and the Nifty is now ready to break 8k.

Misc Scans


According to Hindu calendar, the second half of Bhadrapada month is called pitru paksha and this period is considered as inauspicious.I wanted to check whether the markets were down in this period. So I checked the % gains of Nifty two weeks before (yellow), during (green) and two weeks after (blue) the pitru paksha.

In 2007 bull market, all three periods were up. In 2008 bear market,  all three were down. In 2009-10-11-13 the markets were up during the pitru paksha. Only in 2012 the market was down .3%. I don't have the dates of pitru paksha for the years before to 2007 so I can't check on them but if you do have the dates then please drop me a line and I can check for this thing right from say year 2k.

Edit: According to me, living in India is inauspicious 24x7x365 - so many people die like flies and the local authorities declare xyz amount of rupees for the dead and pdq amount of rupees for the injured. So shameless!  Some "common" accidents happen because of  fire. Now before a fire starts there is smoke. You don't have to be a rocket scientist to know that, do you? But how many places have got smoke detectors? Any kid with a basic knowledge of electronics can rig up a smoke detector circuit in 20 minutes and it won't cost more than a pack of cigarettes. But we just don't have these devices in any place, do we? I can go on and on and give you more examples about how to prevent road accidents, gas leaks etc etc but maybe some other time. 

Tuesday, August 26, 2014

Breadth


The breadth has dropped a bit. After the breakout, Nifty is currently consolidating:



Friday, August 22, 2014

Thursday, August 21, 2014

Breadth


Breadth continues to improve and now the % of stocks above the 10 day average is at 67%.

Nifty Daily Range


Here's a look at the daily high low range of spot Nifty. The traded instrument Nifty Futures does not much deviate from these figures so we can use the spot data as a proxy for the futures instrument. In 2012 we had 18 trading days below 30 points and the total trading days were 248 so this works out to be 7.3%. Similar calculations are done for all the years. I would have liked to do a more detailed study like doing this study say for the last 10 years of data but I guess the result would not be very different. 

Below is a plot of the 10 day average of the daily range. This is a good proxy for volatility and is different than the ATR which takes into consideration the morning gaps into its calculation. Intraday traders would be more interested in knowing the basic high low range. It helps to understand where we are presently on the volatility curve - if the range is like in the lower 40 region then you may trade lightly as there are more chances of a chop but if the range expands to say over 65+ then your trades can be good ones.


Wednesday, August 20, 2014

A and B Screens


Above are the top 25 stocks on my A screen. Below is top 25 on the B screen:


The underlying concept behind top down approach is that leading stocks will continue to lead until they don't. Today again the breadth has improved further:



Recent SPMM Picks


I had these picks for SPMM on 3rd August (Sunday). Bal Pharma went up on the next day, gaped up on Tuesday and then did a sharp pull back exactly as I described in this post! 



Tuesday, August 19, 2014

Breadth


The breadth has further improved today. Now the % of stocks above 10 day average (yellow) is at 57% while the 20 day average (green) figure is at 49%. Number of stocks above the 50 day average (blue) is 50 %  and the long term breadth defined by the 200 day average (red) is at 87 %. Improvement in breadth at new market highs is a healthy sign  - it shows that stocks are being bought at higher prices.