Apr 12, 2010
8 Year Cycle and Dow Theory
As a experience investor we have try to learn from long term chart of the main index and try to give view.
Some observations are as below,
(1) sensex has 8 year cycle
At every 8 years sensex make top and then falls.
Like from 1984 to 1992
1992 to 2000
2000 to 2008
(2) market correct at least 60% from the 8 year cycle top
1992 crash 4546 to 1980=56% down from top
2000 crash 6150 to 2594=57% down from top
2008 crash 21206 to 7697=63% down from top
(3) From 1984 to 2008 of 24 year market moves in higher top-higher bottom formation.
1992 top was 4546 and correct to 1980
2000 top was higher then of 1992 which was 6150 and correct up to 2594 which was higher bottom then of 1992 correction of 1980
2008 top was higher of 2000 which was 21206 and correct up to 7697 which was higher bottom then of 2000 correction of 2594
Now see in every 8 year cycle market turns down with at leas 60% down from high and do not break last higher bottom and creates higher top.
Now if any one who believe in Indian growth story then on Dow Theory and cycle theory consider two things
(1) Indian market can hit major top in
2015/2016
2024/2025
(2) market will correct at least 60% from their top
In technical analysis stop loss is must whether you are trader or long term investor.
In Dow Theory bull market higher bottom becomes your stop loss
Let us explain how
If you have invested from 1984 then market correct from 4546 to 1980
Then in 2000 market correct from 6150 to 2594
At this level those who have invested must keep stop loss of last higher bottom which was at that time 1980 and it was not broken and those who remain invested has get good return.
Then in 2008 market correct from 21206 to 7697
At this level those who have invested must keep stop loss of last higher bottom which was at that time 2594 and it was not broken and those who remain invested has get good return
Now if any one who wants to play India
Now one thing is clear before next bubble in 2015/2016 comes, every investor who are invested in market through mutual funds,insurance plan or directly for very very long time invest your money with stop loss of 7697 if this break then Indian market will enter in to very long term bear phase.
We will update more analysis based on cycle theory and Dow theory as and when needed.
Greece Bail-Out
European governments has offered debt- plagued Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates in a bid to stem its fiscal crisis and restore confidence in the euro. Forced into action by a surge in Greek borrowing costs to an 11-year high, euro-region finance ministers said yesterday they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. That’s less than the current three- year Greek bond yield of 6.98 percent. Another 15 billion euros would come from the International Monetary Fund.
Apr 11, 2010
Comex Gold To Hit All Time High ?
From every time we have given my transparent view on global market,commodities,currency.
Many time we have written that comex gold.
3 CONSTITUTIVE + WEEKLY CLOSE BELOW $1040 WILL START WAVE 5
AS PER WAVE COUNT TARGET WILL BE BETWEEN $900 TO $850.
...Just see gold never close 3 consecutive days or weekly below 1040,made low of 1085 and hit last lower top of $1161...
...click on the link what we have written about gold
http://www.meghainvestments.com/2010/02/gold-complete-4-wavebelow-1040-will.html
now open your eyes and read carefully bears only control below $1040 and that never happen.
Now what to expect from this levels?
3 CONSTITUTIVE + WEEKLY CLOSE above 1161 will confirm the inverted head and shoulder pattern and my target will be 1247,
for clear chart click on the image.
Many time we have written that comex gold.
3 CONSTITUTIVE + WEEKLY CLOSE BELOW $1040 WILL START WAVE 5
AS PER WAVE COUNT TARGET WILL BE BETWEEN $900 TO $850.
...Just see gold never close 3 consecutive days or weekly below 1040,made low of 1085 and hit last lower top of $1161...
...click on the link what we have written about gold
http://www.meghainvestments.com/2010/02/gold-complete-4-wavebelow-1040-will.html
now open your eyes and read carefully bears only control below $1040 and that never happen.
Now what to expect from this levels?
3 CONSTITUTIVE + WEEKLY CLOSE above 1161 will confirm the inverted head and shoulder pattern and my target will be 1247,
for clear chart click on the image.
Repeatatio of no-resulting action is as good as repeatition of mistake
But wait. It's not about doing things right, but doing the right thing!. Your system just isn't working. Many traders have a tendency to fall in trap that they have a system and thats it. They think they are now ahead of 50 per cent of the competition who do not use any system, trading plan, money management plan and so on. They are right but not completely. An the proof is the fact they are not making money when there is enough volatility in the markets. Now here they need to change and shift to that Doing The Right Thing rather than the other way. They need to pay attention to this that Aren't they trying to expect different results although doing the same thing? Then it can not happen. Mind here: This doesn't mean that you should continue changing your system or trading plan. No. Just remain aware that the psychology of Doing thing right doesn't ride you. Sufficient observation time has you have let to understand that some thing is not working than bring change.
Remember always: "The definition of insanity by Albert Einstein- Repeating same thing and expecting different results every time"
Apr 9, 2010
WEEKLY MARKET REPORT FOR TRADERS AND INVESTORS
In this kind of market many small investor often gets trapped and buys shares which are in fancy like which we have seen in 2008 market crash. If you have missed to read the last week report then let me give you all three stock which we have written to avoid are Think Soft, James Hotels, Jay Bbharat Textile and Real Estate.
Again in this week I am writing about such two stocks from investors should stay away.
Avoid below stocks,
(1) Shree global trade fin:
Company is engage in trading of hot rolled coils, cold rolled steel sheets, hot rolled plate, ms channels, and ms beams.
Out of 67 trading session stock was locked In upper circuits in 53 sessions, despite of the manic move stock continue traded in B category instead of shifting in trade to trade segments.
Let’s checkout the fundamentals of the company.
Stock price is trading with whopping P/E multiple of 1800 and book value of just 10.59 per share.
Investors should be aware of such shares.
(2) Anand Credits:
Under listing agreements clause 34 , the company was suspended from trading due to non payments of annual listing fees from 10 September 2000.
Stock was re-listed on 27 January 2010 with price of 50 and this counter jumped to 65 to its all time high.
This Ahmedabad based company is engage in financial service
We suggest that investor beware of such shares.
SECTOR WATCH-(MID CAP IT INDUSTRY)
In the last weekly report I have given my bullish view on hotel sector and given buy on EIH.
On Thursday and Friday most of TV channel were discussing about bullish trend in hotel sector ahead.
Strong dollar and recovering banking, financial, service and insurance sector is helping to revive larger IT Company such as infosys, wipro, and tcs.
But in my view smaller IT company which are engaged in industrial salutations will do well selectively like engineering, because not only Indian industrial but also world over industrial is recovering.
STOCK PICK:
Geometric:
Company is engaged in engineering salutations and products life cycle management business
This company is promoted by well know business house goderaj group and rakesh jujnjuwals and his wife holds nearly 10% in the company.
This company provides design salutations in India and across the world to automobile and industrial segments.
Last year company has acquired US based modern engineering and revival in industrial will help to revive this company ,apart from this company has changed its hedging strategy against dollar and this will improve the next quarterly results of the company.
Technically this counter is much stronger compare to other mid size IT Company and will outperform.
Investor can buy on deep with stop loss of 41 and expect target of 120-125 based on Elliott wave count
FUNDAMENTAL VIEW ON NIFTY:
Currently nifty is trading above 22 P/E multiple.
In normal condition it trades between 22 to 23 multiple.
While in bubble situation this P/E multiple expand to 28 levels and historically in 1992, 2000 and in 2008 we have seen the same P/E multiple.
As per historic data India stock market enters in bubble zone at every 8 years so next bubble should be only in 2016.
If in this current year nifty and sensex cross 6500 and 21000 levels then we will create history by entering in to bubble zone in just 2 years of time frame.
Those who are value investor or value buyers the valuations are not cheap and margin of safety is also low. But those who follow the growth investing theory the valuation may be cheap.
Those who believe in value investing should book profit if market rise to 21000 from current 18000 levels.
Remember in 2007-2008 we were telling to exit from the market from 18000 levels and target given 11000 then what happen you all know.
TEHCNICAL VIEW OF SENSEX AND NIFTY:
From Elliott wave and Dow Theory if sensex closes 4 consecutive weeks above 17800 then in 3rd wave will rise to 19300/19600 and then finally in 5th wave 21000 levels.
On hourly charts as long as sensex and nifty manage to hold about 5200 and 17800 levels we may see more up side till 5500/5600 in nifty and 18200/18500 in sensex.
If US index S&P 500 gives weekly close above 1178 on Friday then wave count and Dow Theory will take to 1400 levels and strong support will be 1044 levels.
So, all eyes are on US market.
GOLD ANALYSIS:
Before 2 week ago I have given analysis of comex gold and told panic will come only if it gives 3 consecutive closes below $1090 and see it gives close only one day below $1090 and rebound to $1150 levels.
Now major resistance is $1166 on COMEX and on MCX 17100.
MOMENTUM CALLS
Market is at high speed and if you don’t wear helmet while you running bike at 100 speeds your life is at risk.
Hear we suggest you some trading calls but we also suggest you to buy April month put options to hedge you buying position because market is running on high speed and any single bed news will create vertical fall and you may loose significantly
Geomatric software
3rd wave on hourly charts. Buy with stop loss of 65 and target 77.
IFCI
Some speculative position build up in this counter. Buy with stop loss of 49. And target of 57.
Neyveli lignite
As per time series reversal will come. Bbuy with stop loss of 144 and targets of 159/162.
SREI infra
5th wave above 82 on hourly charts. Buy with stop loss 74 and targets of 85/88.
Adani enterprise
3rd wave on hourly charts. Buy with stop loss 467 and target of 530.
IMPORTANT NOTES
On 12 April industrial production data will be announced.
Next week China and Singapore to announce quarterly GDP numbers.
Metals index to relatively under-perform.
Quote of the Week:
For traders,
"A speculator must concern himself with making money out of the market and not with insisting that the tape agree with him."
-From book "Reminiscences of a stock operator".
Quote of the Week:
For traders,
"A speculator must concern himself with making money out of the market and not with insisting that the tape agree with him."
-From book "Reminiscences of a stock operator".
Forex Terms
Ask Rate is the rate at which a trader can buy a currency that is for sale.
Base Currency is the currency in which other currencies are quoted in a pair. Usually the U.S. dollar is considered the ‘Base Currency’.
Bid/Ask Spread is the difference between the bid and offer price or buy and sell price.
Big Figure is a term used by dealer and/or brokers. It refers to the first few digits of an exchange rate.
Clearing is a term used to refer to a process of settling a trade.
Commission is the fee that is charged by a broker/dealer.
Confirmation is a document that states the terms of a transaction.
Contract is the standard unit of trading.
Cross Rate is the exchange rate between any two currencies that are not of the country in which the currency pair is quoted. For example, in the U.S., a GBP/JPY quote would be considered a Cross Rate. The same quote would not be a Cross Rate in either the U.K. or Japan.
Orient Paper and Industries Ltd.-Exit in Profit @ TGT of 60.
Just Click on the below Link where recently WE RECOMMENDED ORIENT PAPER:http://www.meghainvestments.com/2010/04/orient-paper-5-th-wave-start.html
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Apr 8, 2010
5th and last explosive wave start in ESS DEE ALUMINIUM
Delivery Pick
ESS DEE ALUMINIUM
STOP LOSS 345 TARGET 600(5th wave on daily charts starts)
ESS DEE ALUMINIUM
STOP LOSS 345 TARGET 600(5th wave on daily charts starts)
Apr 6, 2010
Signs of a Losing Trader
2. He doesn't know the different between trading and investing.
3. He acts on impulse and follow every bit of piece of news. His eyes remain on CNBC in hotel while his girlfriend is talking him something.
4. He doesn't have a trading plan strategy.
5. He let's his losses become bigger. He is more lose averse than risk-averse.
6. He doesn't trade with probability assumptions.
7. He is undisciplined.
8. Tries to read too much into the news.
9. Mistake of overtrading and exhaustive trading.
10. Lack of sound Money-management plan.
11. Lack of risk management techniques.
12. Does not have control on his emotions such as greed, fear, rage, depression.
Gujarat Hotels Ltd.-Paid Members Enjoying Luxury of PROFITS!!!
Just CLICK the below link where we Strongly RECOMMENDED Gujarat Hotels Ltd. which was given to our OPERATOR BASED SURESHOT members:
http://www.meghainvestments.com/2010/03/operator-based-call-from-hotel-sector.html
Now Just See How It has crossed all the TARGETS...
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http://www.meghainvestments.com/2010/03/operator-based-call-from-hotel-sector.html
Get OPERATOR BASED SURESHOT CALLS-Weekly one call.
Join Today. Dial-09377008708.
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Apr 5, 2010
CRUDE OIL AND PICK THEORY
EXCLUSIVE CRUDE OIL REPORT
Yes, Crude Oil Prices can touch to New Highs and Beyond...
Yes, Crude Oil Prices can touch to New Highs and Beyond...
“ACCORDING TO ‘PICK OIL THEORY’ THE PRICES OF CRUDE OIL MAY TOUCH $300 PER BARREL”
BELL CURVE:
The production of crude oil normally follows the shape of a ‘bell-curve’ in which we can say it to be peak production when on the graph this curve comes in the centre top. At this level the production has been peaked i.e. this is the time and quantum of maximum production and from here on the production decreases. (see figure). Paring some exceptions this phenomena is true for a single oil well, a whole oil-field, a country and the whole wordl.
“Peak-Oil doesn’t mean we will become ‘oil-less’, but is surely means we become ‘cheap oil-less”.
The pick oil theory which was made by American Geologist King Herbert, is also known as Herbert Pick Theory. According to this theory’s conclusions, due to declining exploration and sharply decreasing production ; we may see tremendous blast and rocket pace rise in prices of fossil fuels, mainly crude oil. This Pick Oil theory works on the basis of principle based on long-term production and declining reserve rate of fossil energy sources such as coal, crude oil, natural gas etc.
We will try to evaluate this theory through various facts, figures, logics and arguments in this special ‘$300 CRUDE OIL SPECIAL REPORT’.
- There are many reasons behind the strengthening fears of decrease in the reserves/availability of traditional sources of energy such as fossil fuels (like crude oil etc.) such as,
o The technology relating to acquisition and analysis of geological information, is improving day by day.
Apr 3, 2010
FKONCO (EARLIER DABUR PHARMA) BROKEN TRIANGLE:
BSE CODE: 532545Catch on the Opening bell on Monday with stop loss of 115, target 160, just see broken triangle.
Orient Paper Ltd.- 5th Wave Started...
Wave 5th to start.
Buy choice of your quantity and have patience for target of 60 and yes never forget to keep stop loss of 47.
Apr 2, 2010
More from Charlie Munger- On Economy, booms and busts
Here is some more on video tuting from Charlie Munger, Warren Buffet's partner in Berkshire Hathaway. Where he talks about booms, busts, on economy, about Allan Greenspan, about their CocaCola investment, about succession of Berkshire Hathaway, about 'the locker room culture' in Wall-Street and many more things worth giving an ear for a serious student of investing and economy.
Below are excerpts:
- Be ready to face 50% decline in your quoted value of investments at 2 to 3 ocassions.
- Economy runs worst without a system of wise restraints.
- Markets needs to be dampened for this.
- Don't go way too far in financial deregulation.
- Talks about 'idiot boom' and 'idiot expansion of consumption'.
- He says Allan Greenspan is his hero because he accepted that 'he is a horse's ass'.
- Wall-street tracks and rewards ''locker-room culture'. and they do a lot of damage to investors like Buffet and he.
- The reasons ideas such as Buffett's are not so popular is because 'they are so simple and so obvious'
- Keep a mindset of a person buying a whole business.
- He and Buffett speaks normally every week only.
- Berkshire is probably the most 'decentralized corporate' in the world.
Charlie Munger talks "investing filters"
Charlie Munger is not very much known. Although he is a second part heading the Berkshire Hathaway Group for which Warren Buffett is World Famous and has established himself as the invincible investment guru of ages. It was Charlie Munger who made Buffett take decision on buying shares of Cocacola Company, which is Warren Buffet's one of the top five investments. He often say Charlie taught him things which he did not know out of the Benjamin-Dodd mathematics.We will try and attempt put more from Charlie Munger to see if find more gems in investing which could be undiscovered.
Mar 30, 2010
Rajesh Exports Ltd.-TGT Achieved BEFORE Time!! 50% Return!!
Now All Know It is Trading Above 100+, that is Rs.118...Giving A return of 50% from our Strong BUY Recommendation levels of Rs.50.
FOR MORE SENSIBLE AND GENUINE INVESTING RECOMMENDATION, BECOME A MEMBER- DIAL 09377008708.
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