Entegra Ltd.

INVESTMENT IDEA@ 37.50

Entegra is primarily in to the renewable energy

sector, with its 400 MW Maheshwar Hydro Power

project and also into solar and integrated

renewable energy (RE) solutions. This could be a

interesting play for investment in renewable

sector. It is one of the best placed companies to

capture the emerging opportunities in green

energy on the strength of huge cash flows from

soon to start Hydro power project.

Entegra has created two primary business verticals:

(i) Enner Green Resources - which focuses on
development & generation of renewable energy


(ii) Enner Green Solutions - Which provides
customized renewable energy solutions and
undertakes EPC projects

Entegra is a holding company for all current and new

Renewable energy ventures of MW Corp group,

formed by Mukul Kasliwal & Warij Kasliwal.

Flagship project of the group is - Shree Maheshwar

Hydro power project, a 400 MW run of the river

Hydro Power project. Entegra is holding 68.73% stake

in this SPV, and intends to increase this to 85.6% by

the time project is fully commissioned [Dec’10].

Shree Maheshwar Hydro is setting up a 400 MW Hydro

power project [40MW X 10 turbines] which will be partially

commissioned in June ’10 [first 5 turbines 5X40 MW] and

rest by Dec. 2010 [all 10 turbines].

This is one of the largest Hydro power project in

private sector [Bigger then JP Hydro’s 300 MW]; with

capability to generate 31.8% ROE. The Company has

long term PPA, along with attractive and secure

incentive structure for payment from MPSEB.

Using huge cash flows from this hydro power

project, Entegra plans to build its Renewable

Energy empire in years to come [mainly Hydro & Solar]
High Potential for Renewable energy
• Potential in renewable energy: India has a power generation potential of ~90,000MW from

different renewable energy sources in the country.

With increased commitments ahead of

Copenhegan meet, the Government need to focus

on tapping the renewable energy sources from

13,310MW at present to 15,000MW by 2011 and

80,000MW by 2032.

• Hydro power opportunity: India ranks fifth in
world for exploitable hydro potential, with

economic exploitable hydro power potential of

~150,000MW but existing capacity of just

36,885MW (~24%).

• Solar Energy Opportunity: GOI recently
approved the ambitious Jawaharlal Nehru

National Solar Mission (JNNSM) which plans to set

up 20,000MW grid solar power and 2,000MW offgrid

solar power by 2022 in three phases of

implementation. The plan targets to set up

1,100MW grid connected solar plants and 200MW

capacity equivalent off-grid solar applications in

the first phase till 2012-13.

High ROE generation

The project is expected to generate higher energy levels considering the water flow from the upstream

projects – 1,000MW Indira Sagar and 520MW Omkareshwar. As per the incentive structure,

considering 99% utilisation and average generation of 1,370 mn units p.a. the project can earn

approximately 16.3% additional RoE taking the total effective ROE to 31.8%. The project has no

obligation to provide free power to the home state like other projects and in the event of default in

payment by MPEB, SMHPCL can supply to third party buyers at market rates, which are highly

lucrative.

Project Nearing Completion

Project implementation (physical progress) was first started in 1998 but was stalled in September

2001 due to funding and other issues. Construction work recommenced in November 2005 after

submission of a revised restructuring package. All land required for the Project construction has been

acquired.

Of the total cost of Rs 27.6bn on the project, SMHPCL has already spent around Rs 19bn.

Approximately 93% of the Project civil work has been completed and construction of all 10 turbines is

currently in progress. SMHPCL expects to commission its first 5 turbines (40MW each) by June

2010 and the balance 5 turbines by Dec. 2010.

Attractive Valuations:
The latest bench-marks for Hydro-power projects have indicative valuation of appx. Rs

6-7 Crs per MW. This project is valued around Rs 3.5 Crs per MW at completion stage

[June’10], thus offers good upside to investors in medium term. Accumulate the stock for

return of 30-50% in next 6 months. Traders can look forward to a 15-20% kind of

return in next 2 months time frame


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Great results from Spanco Ltd....

Spanco Ltd has come out with stupendeous results.....
code:508976
cmp:66
For the qr ended Dec 09 the np went up from 1.60 cr last year to 18.96 cr this year giving an eps of 6.78 for the qr.with topline going up from 170 cr to 378 cr.
Nine months topline is now at 813 cr and hence I can assume that for whole year it will cross 1000 cr very easily.....
Recently,Spanco Telesystems was in the news for submitting the lowest bid for BSNL''s Rs 7,500-crore telecom infrastructure contract. The contract consists of providing telecom towers, power plants, generator sets and other infrastructure.In the case of BSNL contracts, the lowest bidder typically gets 50% of the total contract work, while the remaining half is equally divided among the second and third lowest bidders. According to a source, Spanco is currently in the negotiation phase with BSNL and the final order size is likely to be Rs 3,750 crore. It is a build, own, operate, and transfer (BOOT) contract spanning over seven years.BSNL has also floated a tender for IT related work with an expected size of Rs 6,000 crore. Spanco has tied up with applications developer Amdocs and IBM and has jointly bid for the tender. BSNL is likely to announce the lowest bidder for this project in a few weeks.Spanco has grossed Rs 622 crore in revenue in the last four quarters.BSNL''s contract would help the topline increase at a rapid pace since the company expects to earn over Rs 1,000 crore in revenue in the first year of the contract with an operating margin of 14-15%. This may provide some stability to its current margin, which has been fluctuating between 6% and 17%. Spanco has been aggressively looking for opportunities in the telecom and BPO space. However, it has yet to achieve financial stability. Its cash flow from operations is negative, indicating that the company is still in the financing mode and will take some more time to generate a cash flow from operations. It also has to improve its receivables collection. The debtor days or days for which sales are outstanding has increased to 169 days in FY08 from 122 days in the previous year.While the future for Spanco looks promising, the company has to improve its financial parameters to run healthy operations.All said and done,investors can consider an exposure to the counter at dips.Can prove to be a great buy if all augurs well for the company.



Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Understanding the Dollar Index

Dollar Index is actually a basket of currencie against which the value of the Dollar is measured. There are six currencies but the Euro is the most important. Here are the weights:
Euro = 57.6%
Japanese yen = 13.6%

British pound = 11.9%

Canadian dollar = 9.1%

Sweden krona = 4.2%

Swiss franc = 3.6%
So, the Dollar Index is heavily influenced by the Euro, and, remember that the Swiss Franc is closely related to the Euro so the influence is actually more than visible.
When the Dollar rises in value to the currencies listed above, the Dollar Index moves up. The Index measures the strength of the dollar.When the Dollar Index falls, it means that the Dollar is getting weaker. (As the Index falls, I.T. stocks in India face heavy weather because the Rupee may be getting stronger.)

Anticipation of a weak dollar pushes money into emerging markets. The arithmetic goes something like this: One dollar fetches Rs 48. So an investor sells his dollar, buys the Rupee and invests Rs 48 in Indian stocks. Let us say that the market remains where it is. The dollar becomes weaker and now fetches only Rs 44. The Investor can sell his shares for Rs 48 and buy 1.1 dollar (approx) and send this money back. Therefore, a weak dollar encourages movement of capital to emerging economies.
The reverse will be true if the Dollar begins to appreciate.



Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

If you follow this ideology you will always earn profits

Once upon a time in a village a man appeared who announced to the villagers that he would buy monkeys for Rs 10. The villagers seeing that there were many monkeys went out in the forest and started catching them. The man bought 1000 monkeys @ Rs 10 and as supply started to diminish, The villagers started to stop their effort.

He announced that now he would buy for Rs 20. This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and people started going back to their farms.

The offer rate increased to Rs 25 and the supply of monkeys became so low, that it was an effort to even see a monkey let alone catch it.

The man now announced that he would buy monkeys at Rs 50! However, since he had to go to the city on some business his assistant would now buy on behalf of the man. In the absence of the man, the assistant told the villagers "Look at all these monkeys in the big cage that the man has collected. I will sell them to you at Rs 35 and when the man returns you can sell them back to him for Rs 50." The villagers queued up with all their saving to buy the monkeys.
Phir na woh aadmi mila, na us ka assistant...........

Sirf bandar hee bandar.....

Let Assume; monkeys = Shares
50 wala tha FII

35 wala tha apna Minister

Baki sab.....???...main-aap aur Bagpiper

Cheers


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Alok Industries Ltd

BSE Code: 521070

CMP: Rs.24.6

Book Value: Rs.35.47

EPS: Rs.3.41

Market Cap: Rs.1490 Cr

Introduction: Alok Industries Ltd is a fully integrated textile company and is amongst India’s largest textile manufacturers. It was established in 1986 as a private limited company, with its first polyester texturing plant being set up in 1989. It became a public limited company in 1993. Over the years, it has expanded into weaving, knitting, processing, home textiles and garments. And to ensure quality and cost efficiencies it has integrated backward into cotton spinning and manufacturing partially oriented yarn through the continuous polymerization route. It also provides embroidered products through Grabal Alok Impex Ltd., its associate company.

Alok Industries Ltd, has recently entered the domestic retail segment through a wholly owned subsidiary, Alok Retail India Limited, with a chain of stores named ‘H&A’ that offer garments and home textiles at attractive price points. It has also ventured into the realty space through wholly owned subsidiaries with investments in some prestigious projects in Mumbai. The company has focused on world class infrastructure, best-in-class technology, uncompromising quality standards and dynamic product innovation. Added to these has been its constant desire to surpass customer expectations. Today, Alok Industries Ltd represents the future of India’s textile industry.

Shareholding Pattern: The promoters hold 36.69%% while the general public holds 63.20% of the shares of the company. The FIIs hold 20.92%, while the DIIs hold 12.59% of the shares of the company.

Financials: For Q2FY10, the company came out with good set of numbers. The total sales of the company for Q2FY10 came out to be Rs.975.5 Cr as against Rs.698.14 Cr in the same period previous year. The net profit of the company for Q2FY10 came out to be Rs.57 Cr as against Rs.42.15 Cr in the same period previous year; however, this on an expanded equity capital of Rs.605.08 Cr as against Rs.196.97 Cr in the same period previous year.
Triggers:
• The company charting out strategies under which it would open stores in Malls after analyzing the cost effects.

• The company has a blue chip international customer base comprising of world renowned retailers, importers and brands. With commencement of spinning of cotton yarn, the company has achieved complete integration.

• The Terry Towel project, which was part of Phase I & II, was commissioned in FY09. The Company has also successfully commissioned Continuous Polymerisation (CP) Plant at Saily (Silvassa). Phase III and Phase IV of the expansion of the Company's capacities, aggregating to Rs.1, 100 Cr and Rs.1, 180 Cr stands largely completed; the balance portion is progressing well and is expected to be completed very soon.

• The Company's textiles operations have shown encouraging growth trends, both in the domestic and in the exports markets. The capacity expansions which the Company had been putting in place for the past few years are nearing completion and the volume increases are starting to be reflected in operations and sales.

• Marketing initiatives across the world have both de-risked Alok Industries Ltd as well as contributed to a healthy order book. The Company believes that its scale of operations and integration across the textile chain will, in future, offer significant advantages in both cost and revenue.

• Given the increasing spending capacity of the middle-class consumer segment in India, retail remains an exciting prospect over the medium term. The Company's retail initiative is operated through its wholly owned subsidiary Alok Retail India Ltd., which has opened ninety 'H&A' stores across India. The Company wishes to expand the 'H&A' footprint to over 300 stores during the current financial year.

• The Company's investment in Grabal Alok (UK) Ltd, as part of the Group's overseas retail foray is now starting to show improved results. The stores, which are spread across the UK and offer quality apparel and fashion products at affordable prices, are also in the process of being rebranded from “qs’ to “Store Twenty One”. The second half of FY 2008-09 has reflected improved topline--thanks to cost rationalization and efficiency maximization measures, the 'middle line' has also shown improvement. This encouraging trend has been carried on during the first quarter of the current financial year as well.

Conclusion: From the charts it has been found that the stock is trading above it 50 and 200 days moving averages, which is encouraging. Considering the other chartical parameters it can be concluded that the stock can be purchased at any price above Rs.24 for a target of Rs.31—32 in the next 30 days time frame.

Note: The stock was recommended to the Paid Groups on 21th January, 2010, in the Report.


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

I Hope Now Investors Members Are Aware From Such SMS In Future.

Dear Members

I Am Writing This Post For All Innocent & New Members.

Please Read Carefully Below

In Stock Market Currently Receiving Bulk SMS From Unknown User Is Very Common Things.

Lots Of Innocent Investors Trapped Badly In Such SMS In Which Sender Sent Very ROSY SMS On Unknown Stocks.

For Understanding This I Give You A Example

Note :: All Price & Data Are Imaginary For Understanding This

:: How Stock Opertor Dumb Stock ::

XYZ Stock Traded @ 100 Level On Exchange With Low Volume.

Share Capital :: 50 Lacs Shares.

Operator/Owner Hold : 47.50 Lacs Shares

Public Holding : 2.5 Lac Shares

Stock Always Moves In A Narrow Range Daily @ 100 - 110 With Hardly Any Movement Or News About Such Stock Because Of Low Public Holding.

We Hardly Even Know Name Of Such Stock.

Now The Operator/Owner Of Such Stock Wants To Exit From Such Stock

For This First They Want To Create Some Volume In Stock And For This Stock Split Is Best Way Of Creating Volume.

Then Company Announce Split In Company Stock Price

Split In The Ratio Of 10 : 1

After Split Share Capital :: 5 Crore Shares

After Split Operator/Owner Hold :: 4.75 Crore Shares

Public Holding :: 25 Lac Shares

After Split Stock Traded @ 10 - 12 Rs. Range For Quite Some Time.

Now Real Game Begins

Read Carefully

After Stock Split Operator First Move Stock Price To 10 To 14 In Five - Six Trading Session Just For Attracting Investors.


{ Its Very Easy Work As Operator Owner Hold Almost 95% Of Share Capital & The Easily Moves Stock Price}

After Hitting 2 - 3 Upper Circuit Almost All Traderrs Investors Are Talking Of The Stocks & Attrat Towards The Stock.

Then Price Hovering Around 15 - 16 For Some Trading Session.

:: Now What Operator Lobby Do ::

Operator Lobby First Purchase Bulk SMS From Any BULK Sms Provider Which Is Easily Available On Net.

I Understand Rate Of BULK SMS Is Around 0.03 Paisa Per SMS.

If Operator Purchase 1 Crore SMS From SMS Provider Then Its Cost Would Be Around

10000000 * 0.03 = 3 Lacs

After Purchasing BULK SMS Service

Operator Lobby Collect Mobile No. Data Of Mobile Users Which Is Easily Available.

Operator Try To Collect Mobile No. Of Stock Traders & Investors Which Can Be Easily Collect From Market.

After Collectiing Data Of Mobile No. Operator Lobby Created A Very ROSY SMS For Suggesting A BUY CALL ON XYZ Stock.


Example Of SMS ::


BUY BUY BUY XYZLTD. @ MARKET PRICE Of 16 Target In 1 Month Is 30 Rs.


JUST BUY BUY BUY Dont Miss The Stock.


BUY Only Small Quantity Of 300 - 500 Shares , Fast Fast Dont Miss The Opportunity.


{ Sender Is Always Unknown }

And Then Send This Very Very Rosy SMS To Almost 25 Lacs Users.

{ They Try To Send Such SMS To Only Stock Investors / Traders }

And Then IN Next 3 - 4 Trading Days Operator Lobby Send Same SMS To Those Mobile User 3 - 4 Times.

25 Lacs Users * 4 Times Same Sms = 1 Crore { Which Operator Lobby Purchase From Web SMS Services }
Some Rough Calculation : :

Stock Operator Sent Rosy SMS To 25 Lacs User { 4 Times }

25 Lacs Users Receive SMS


1. Only 70 % Mobile User Read The SMS.

Rest 30% Deleted Without Reading.

2500000 * 70 % = 1750000

No. Of User Who Read SMS = 17.50 Lacss


2. Only 25% Is Stock Traders/Investor From Those ( 17.50 Users )

1750000 * 25 % = 437500 Users

Then No. Of User Who May Intrested In Such SMS = 437500 Users


3. Only 30% From Intrest Users Thinking Of BUY Stock

Then No. Of Users Who May BUY

437500 * 30 = 131250 User

You Know What I Feel Is That Normally Investors After Reading Such SMS Thinking Of BUY Only 300 - 400 Shares

They Think We Can Take Small Risk { Everyone Is Greedy & Wants To Double Money In Short Time }

Normally Experience Traders/Investors Also BUY As They Think Ki Zero Bhi Ho Gaya To Bhi Koi Vanda Nahi Hai.
In Greed Almost All Such Users Buy Small Quantity Of 100 - 500 Shares.

( Median Of Buying Qty Is Around 350 Shares }

Calculation Of Investors/Traders BUY Quantity Who Bought Because Of ROSY SMS ::

IF All Such Investors/Traders Buy 350 Shares Then

131250 ( USERS ) * 350 ( Share Quantity ) = 45937500

{ Almost 4.50 Crore Shares Greeedy & Innocent Inestors Buy }
4.5 Crore Shares Innocent , New , Greedy , & Also Users Which Are Not Intrested In Market BUY Such Stock Because Of Such Rosy SMS About Company.

:: Intresting Calculation ::

:: After Split ::

After Split Share Capital Of Company :: 5 Crore Shares

After Split Operator/Owner Hold :: 4.75 Crore Shares

After Split Public Holding :: 25 Lac Shares

After ROSY SMS Drama

After SMS Drama Operator/Owner Stock Holding ::

25 Lacs Shares

Because Operator/Owner Dumb Almost 4.5 Crore Shares To Public @ Higher Level.

After SMS Drama Public Holding ::

4.75 Crore Shares

As I Tell You Above How Investors Buy 4.5 Crore Shares.

After That Stock Price Daily Comes Down Down Down Down Down Down Down.....

And Investors Are Just See See See Downmove.......

Because There Is No BUYERS After That Only Seller Seller Sellers.....

I Hope Now Investors Members Are Aware From Such SMS In Future.

Never Ever Buy Such STOCK Only Because You Received A SMS.

**** Aware From Such SMS **** & Join

 trendwatch-india.blogspot.com

Always remember...no force or single person can move stock.Its a game of mass


psychology.We look at chart ,collect information and just spread it .......free of cost.

Always Remember :Never pay money to anybody ..who is asking for it.Just ask any Analyst (TV ,Media ,Print or Website wale Analyst ko pucho............What is their success ratio in Day trading???A Million $ Question ...Doing Bla-Bla on TV ,writing on web is very easy......but while u trade .....u are playing with live wire

wish you happy trading to all of you.

Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Mid Cap Rocket multibagger Stock Pick Recomendation For budget 2010 Traded in NSE BSE, Graphite India Limited

Graphite India Limited GIL
GIL was . Incorporated in 1963 in collaboration with “The Great Lakes Carbon Corporation of USA”. Today with a combined capacity of 33,000 MT per annum spread over three plants at Durgapur, Bangalore and Nashik, GIL boasts of possessing the largest pool of technical personnel in Graphite technologies. While Graphite Electrodes still contribute to a major share of the total output, GIL has graduated to becoming a Graphite technology specialist, providing solutions with products for applications in the Metallurgical (ferrous & nonferrous), Chemical & Process and Aerospace. Strategic diversifications into specialty products has resulted in the setting up of a Specialty Division at Bangalore & an Impervious Graphite Equipment division at Nashik.

NSE Code : GRAPHITE

BSE Code: 509488

CMP NSE: 89.15

EPS For Last 4 Quarters : Rs 11.73

PE : 7.6

Major Share Holders as 30 Sept 2009

Life Insurance Corporation Of India is holding 4505809 Shares

Fidelity Northstar Fund Hold 7750000 Shares

Acrewood Management Limited Hold 11995625 Shares Which is Nearly 7 % stake

Recently Reliance AMC Picked up 464,649 Shares

Buy at CMP keeping Union budget 2010 in Mind

Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Why is Stock Trading the best business in the world?

for the following reasons:-



1.- Anytime, flexible timing (no 9-6 job, no 6am-10pm business complusions).


2 - From anywhere (can even trade from mt.everest or from antartica).


3 - No or minimum investment (a pc with internet connectivity, a demat account and a good head).


4- Minimum amount to start (Can buy even a single stock; even for a tea and samosa stall you need a shop etc worth a few lac rupees.


5- For other businesses you need a crore or more with no guarantee of profits and recovery of investment).


6- No office / shop / infra / furniture / ACs etc.(just need enough space to place your bum or plant your to feet, how many other businesses permit u that luxury?).


7- No employees - not even a chawkidar or a sweeper...no salaries...no labour law hassles.


8 - No overheads - like electricity, water and phone bills, rent, transportation etc.


9- No stocks, no stockyard, no deadstock , no sales tax / excise tax etc. headaches.


10 - No account keeping (your brokerage does it for you).


11- No inspector/permit hassles, no boss.


12- No tension of getting out of job, being sacked, recession, no "buri nazar" and "hafta" (always out of public glare).


13 - One of the best returns on investment (many getting 10-15% per month or even more).


14 - Can pack up your bag and retire at any time if you wish (how many other businesses allow u to wind up? it is said that - you don't own a business - the business owns you - and won't leave you that easily).


15-National development, people participate by contributing towards new startups which generate employment, yield tax, earn foreign currency, generate wealth and bring social prosperity.


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

LEARNING SECTION-----The cognitive process of acquiring skill.

4 golden rules before you invest in stocks

A stock broker makes money based on the traded value and hence most brokerage houses keep giving 'free' stock tips in all markets. Keep in mind that it is you who could make the losses. There are some basic rules you need to abide by if you don’t want to be cheated out of your money.
Rule 1: Study the tips before investing

Do the litmus test. Before you invest, test the tips suggested by analysts for a certain period of time before you take the plunge.
Most brokerage houses provide stock tips for no charge. They claim to have large research teams and churn out a large number of reports, yet provide it free of cost as a value added service. How do you think they sustain? They make money out of you; the more you trade, more money they make irrespective of whether you make money or not.
Rule 2: Research before you invest, not after!

Research the stock picks before investing. Also, ask your broker for detailed reports on the picks. Invest only if you are convinced that the long term prospects are good and if the company has a good long-term competitive advantage. Do not waste your time on tips that give you a trigger price and target price.
Rule 3: What goes up faster, comes down faster

Any statistics that you would have read in the peak would have had strong rationale for growth. However, be a little cautious when stocks/sectors have run up too much. High P/E multiples indicate that the stock market is discounting very high growth rates of the company in the future. It is difficult for a company to continuously maintain such high growth rates as the company keeps growing larger. The stocks could be re-rated downwards if the growth outlook for the stock changes in the market.
Rule 4: If you don’t have the time, use mutual funds

If you do not have the time to track each stock in your portfolio, do not invest directly in the equity market. Investing through the mutual funds in a Systematic Investment Plan can create significant value without having to get into detail on your individual stocks.


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

JK Papers Ltd— STRONG BUY@50

Sector — Pape
Listed — NSE, BSE.

Company Overview—

JK Paper Ltd. is a part of well known group JK organization a leading multi-product, multi-business group of India. J K Paper Ltd was formerly known as Central Pulp Mills, a member of HS Singhania group is originally promoted by Parkhe Group to manufacture Paper and Paper products. Company purchased a Pulp Drying Plant from Finland in 2001 to increase the output and realization of market pulp. Company enjoys the location advantage in respect of sourcing raw material. It sources all its bamboo requirements with in the 200 kms radius of the plant. Further for long term continuous source of raw material the company is running social forestry and farm forestry programs in 11 districts of Orissa and 3 districts of Andhra Pradesh, covering a total area of over 20,000 Hectare. The name of the company was changed to JK Paper Ltd from The Central Pulp Mills Ltd. JK Paper has a deep commitment to protecting the environment. Company is the first paper mill in India to have been accredited with ISO-14001 certification for the Environment Management System Standard. Company Paper has a research and development wing involved in developing high quality seedlings and helping farmers achieve better yields from their plantations.

Products & Services—

Company is an established name in the manufacture and marketing of paper. It has the distinction of being the largest manufacturer of branded copier paper in India. Company is also been consistently exporting its products to markets such as Sri Lanka, Bangladesh and several West Asian Countries. Company was first to introduce surface sized maplitho in India, first to introduce high quality bond paper 'Finesse' in A4 size consumer friendly retail packs of 100 sheets. Company was first to introduce laser paper in India. The company has introduced two new value added products i.e. MICR Cheque Paper and Cup-stock Board and both of them have well established in the market. Company is well known for its success in creating brand in paper industry with having top two paper brand i.e JK Copier & JK Easy Copier in its basket the company has initiated outsourcing of paper products in india. Company outsources JK Cote from an international producer, who produces as per the specification of JK Paper. JK Paper today has an combined installed capacity of 2,40,000 tpa with two integrated Paper Mills at JK Paper Mills, Raygarh, Orissa and Central Pulp Mills, Gujarat.

Company has quality benchmarks from its commencement, and continues to do so. Its major brands include JK Copier, JK Easy Copier, JK Evervite, JK Excel Bond, JK Bond, JK SHB Maplitho, CPM Parchment and JK MICR. Company has one of the largest distribution networks in the paper industry. With more than 100 wholesalers, over 1700 dealers, 10 warehouses and 4 regional offices spread across country, it has achieved matchless service levels. Nearly 50% of the exports are of branded products.

Recent development—

JK Paper plans to infuse Rs 14 billion to expand its manufacturing capacity by 1.5 lakh tons annually in the next three years. The proposed investment and expansions will take place over a period of two to three years. The company is producing 2.6 lakh tons of paper every year, more than the current capacity of 2.4 lakh tons. Going forward, it plans to increase the capacity by 1.5 lakh tons.

Valuation—
At current market price, stock is trading at attractive valuation of 4.9 P/E multiple of its FY2010 estimated EPS. We recommend investors "Strong Buy" on "JK Papers limited" with medium to long-term investment


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Gwalior Chemical Industries (GCIL):

BSE Code: 532764

Book Value: Rs.80.33

EPS: Rs.38.69

P/E: 2.3

Market Cap: Rs.219.62

Accumulate: To be bought around the strong support of Rs.86

Target: Rs.105—Rs.115

Time: 2months

CMP@ 96
Introduction: Gwalior Chemical Industries (GCIL) is a producer of specialty chemical products at its two chemical facilities located at Nagda (Madhya Pradesh) and Ankleshwar (Gujarat). It has built a formidable presence in the specialty chemical industry and extensively catered to the needs of customers covering the agrochemicals, pharmaceuticals, dyes and flavours and fragrance industries. It also manufactures and sells special Viscose Dye Pigments catering to the textile sector. It caters to various industries like agrochemicals, pharmaceuticals, and dyes industries. It also produces Chlorotoluene range of products like benzyl chloride, benzaldeyhde, benzotrichloride, benzyl alcohol and its other derivatives. It also produces sulphur chloride range of products.

Shareholding Pattern: The promoters hold 59.98% while the general public holds 40.02%. The FIIs hold 2.90% while the Mutual Funds hold 8.37% of the shares of the company.

Triggers:

• The first and the foremost reason for recommending the scrip is the growth in the agrochemical segment where the growth in the agricultural sector is expected to drive the growth. With government expected to go for another round of green revolution the demand for the same is expected to increase.

• The Company has decided a buyback of shares of the Company. In the first phase, the Company proposes to buy back 40, 50,000 shares at Rs.120 per share through a tender offer route in this financial year.

• The Company has completed the transfer of its chemical business at Nagda, Madhya Pradesh and wind mill businesses at Madhya Pradesh and Maharashtra to Lanxess India Pvt. Ltd. on September 01, 2009. The Company will invest the sale proceeds in power generation business and manufacturing of high value specialty chemicals at Ankleshwar. The cash derived from sale,

after initial distribution to Shareholders, when put to use in power generation and in building the Ankleshwar facility into specialty chemical hub will yield superior return to the Shareholders. This sale shall enable the Company to distribute some cash back to the Shareholders as well as invest in the growth of the businesses.

• The company gave a dividend of 12 % (Rs.1.20 per share) for the financial year ended 31st March 2009 same as in the FY08, inspite of the challenging market conditions. The total amount of dividend for the year ended 31st March, 2009 is Rs.296.12 Lacs.

• Expansion Plans and the year under review: In the year under review (FY10) the Company has earmarked upon expansion of capacities and infrastructure facilities thereof outlined herewith along with the expected dates of completion. Sr. Name of product Existing Expected Completion

No. Capacity Capacity

1. Chlorotoluene & its Derivatives: from 84100 TPA to 137000 TPA completion on September, 2009

2. Sulphur Oxy Chloride & its Derivatives: from 41000 TPA to 41000 TPA--> Completed

3. Pigments; from 2400 TPA to 3000 TPA--> Completed

4. Others: From 115700 TPA to 170400 TPA--->Completed

5. Co-generation power plant - NIL 4 MW Power & 45 TPH Steam Jan, 2010

• The Company has achieved an international award instituted by Indian Merchant Chamber,

Mumbai. The award is given to the company in manufacturing category for adopting world class

practices in quality management systems and for creating excellence in business performance and supply chain.

• The Company has also incorporated a wholly owned foreign Subsidiary Company in the name of Gwalior Chemicals LLC in May, 2008 under the law of the United State of America, with the

objective of carrying on business of selling products manufactured by it in the American Markets.

• The Company has also incorporated a wholly owned Indian NBFC Subsidiary in the name of GCIL Finance Limited with the initial paid up capital of 250 lacs.

• The company has adopted TPM (Total Productive Maintenance), designed by JIPM (Japan

Institute of Plant Maintenance), to improve the efficiency and performance of the plants by

eliminating Break down Losses and Defects.

• The Company has handled adverse effects of largest recession of century quite well. Its well

designed product basket with recognized quality coupled with strong domestic industrial base has enabled it to deal situation squarely. The products of the Company are focused primarily on the agrochemicals, pharmaceuticals, dyes and flavors & fragrance industry and as a result, its

operations are significantly influenced by the trends of the aforesaid industries. The Company

sees a robust growth in the industries in supplies too. On the other hand availability, cost and
quality of inputs like chlorine, steam and electricity have a significant impact on the working of
the Company.

• As regards the financial performance, the company posted good results for FY08 and FY09 as a whole. On a standalone basis, the total sales of the company for FY09, came out to be Rs.381.4 Cr as against Rs.295.7 Cr in the same period previous year. The net profit of the company for FY09, came out to be Rs.27.7 Cr as against Rs.24.32 Cr in the same period previous year. This gave an EPS of Rs.11.23 in FY09, as against Rs.9.85 in the same period previous year. For Q2FY10, the total sales of the company came out to be Rs.57.53 Cr as against Rs.74.77 Cr in the same period previous year. The net profit of the company for Q2FY10, came out to be Rs.76.5 Cr as against Rs.7.03 Cr in the same period previous year. The EPS of the company for Q2FY10, came out to be Rs.30.99 as against Rs.2.85 in the same period previous year.

Conclusion and Chart Check: Though the operating profit margins are in pressure but the Company is expected to maintain its margins in future as it will be able to pass on the cost to the clients. With good amount of rise in demand and increased capacity the valuations are expected to improve and hence, the investors can slowly accumulate the scrip near the support of Rs.86, for a target of Rs.105 115, in the next 2 months time frame. The stock may not rise immediately though Bollinger bands, MACD and Stochastic are more or less in the buy mode. It is not a momentum counter and hence its rise will be slow but steady. The stock is best suited for highly volatile markets



Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

UPDATE...............October 07, 2009,MY PREVIOUS RECOMMENDATION,in Penny stock.

West Bengal govt extends guarantee for Cals Refineries loan. Cals refineries is one of the few penny stocks in stock market which is being discussed a lot for it's future prospects.
Cals Refineries announced that West Bengal Industrial Development Corporation has informed the company that West Bengal Government has extended the guarantee for release of first installment of loan under the incentive scheme approved by the West Bengal Government.
The company is promoted by a group of individuals having well established businesses in India with a strong global presence in Oil & Gas, hospitality and infrastructure.
With the energy sector playing a pivotal role in global economies, the company aims to actively participate in its growth in India as well as in international mark.


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Kirloskar Electric - Mid Cap Stock Analysis

Kirloskar Electric Company Limited (KEC) is one of India 's leading manufacturers of electrical and power equipment.
Apart from manufacturing power and distribution transformer a wide range up to 50 MVA in 200 kV class, Kirloskar Electric also produces several types of special transformers like furnace, flame proof as well as conventional dry type, earthing, special converter, high voltage testing, short circuit testing, nitrogen gas cushioned, cast resin etc.
It is also one of the leading manufacturers of AC/DC motors, AC generators, DG sets, tractions etc. At the same time, its Switchgear division manufactures high voltage switchgear in the range of 3.3 to 36kV for indoor as well as outdoor applications. Recently, it has setup up a new plant at Maharashtra & Haryana for transformer & rotating machine respectively. In order to consolidate and integrate its operation, company has recently merged Kaytee Switchgear Ltd (KSL) & Kirsloskar Power Equipments Ltd (KPEL) with itself.
Due to drastic fall in metal prices and synergies of merger, KECL has the potential to improve its margin going forward and can report an EPS of more than Rs 8 in FY10. This stock looks good from a longer term perspectives. It has moved a lot in past few days. I would recommend to buy stocks around 65 levels where it seems it has strong support.
CMP@ 97
Market Cap 495.87

* EPS (TTM) 7.52

* P/E 13.05

* P/C 9.68

* Book Value 28.15

* Price/Book 3.49

Div(%) 0.00

Div Yield(%) -

Market Lot 1.00

Face Value 10.00

Industry P/E 27.73


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Andhra Cement - Safe Value Stock

I like Andhra Cement because of the capacity expansion, which is going in the company. This is a GP Goenka group company, which has got two cement plants with a total capacity of 1.4 million tonne per annum. In FY09, this company achieved a sales of close to Rs 370 crore, profit after tax (PAT) was about Rs 60 crore, which results in an EPS of about 4.5. At the current price of about Rs 28, stock is traded at a price to earning multiple of about 7
Now this company is undertaking a capacity expansion, which will take its capacity from 1.4 to 3.5 million tonne per annum. The increased capacity is going onstream in the next couple of days – maybe next week as what GP Goenka mentioned in a recent interview with CNBC-TV18.
So you have a company which is available at a price to earning multiple of about 7 on the old capacity and with the new capacity going onstream next week, which is going to potentially add the turnover by 2.5 times since the capacity is going up from 1.4 to 3.5 million tonne per annum, I think at the current market cap of about Rs 350 crore and the current P/E of 7, the stock is undervalued.
Another thing is that promoters have been increasing their stake in the company through market purchases and there has been a lot of inter state transfer between the promoters also. So promoters also realize the potential of the company and heartening fact is that the promoter’s stake in the company is close to 75%. So over the next few years, there is potential for dilution.
I see Andhra Cement is one of those candidates where potentially since there is a lot of interest in the cement companies from foreign players, there could be some kind of a strategic investor coming into the company or maybe some majority stake being given to some potential investor. Andhra Cement maybe a fit case where those possibilities exist.
Fundamentally, also at a price to earnings multiple of 7 on 1.4 million tonne capacity, of course, earnings are going to grow up when the expanded capacity goes on-stream. So at Rs 28 again, this is a market where midcaps and smallcaps have run away quite a bit.


To look for a safe stock in this kind of a market is slightly difficult. Andhra Cement at Rs 28 looks to be a stock where the downside looks restricted even if the market falls. And since the earnings are going to rise in the coming years, there is scope for significant appreciation from these levels.



Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Donear Industries Ltd

Scripscan:


Code: 512519

cmp:30
Story:Donear Industries is into textile and they have a very strong brand Donear Suitings for which Yuvraj Singh is the brand ambassador. The company has set up a new textile plant in Surat with an investment outlay of about Rs 220 crore for which they have gone for a borrowing of about Rs 120 crore. Prior to that it was a debt-free company and it has been doing quite. It had given bonuses in last five-years with a very high promoter stake of 90%, which the stock exchanges has asked them to reduce to 75%.But since the Surat project of Rs 220 crore, which had gone onstream just six-months back, the company have been providing depreciation on the written down value method while all the listed companies are providing depreciation on the straight-line method. This is was because of the policy having adopted for written down value method. The depreciation burden has been quite high and that has resulted into the net loss.If the company would have opted to provide depreciation on the straight-line method, there would have been net profit. If you see their H1 performance, they had a topline of close to Rs 115 crore in which Surat project has not contributed much – with a net loss of about Rs 5.80 crore and in this Rs 5.80 crore the depreciation element was at about Rs 17.5 crore. So if I take the cash profit element, the company had posted a cash profit of about Rs 11 crore for six-months on a equity of close to about Rs 10.40 crore.The share has a face value of Rs 2 and now this Surat project will start contributing to the topline as well as to the bottomline. Maybe, I don’t know what would the logic will be, it may prevail upon the management to opt for the change in the depreciation policy and if they opt to do that – there would be a reversal of depreciation, which can result in a huge write back of the depreciation which can improve the bottomline.But even if you take on a fundamental basis with a market cap of the company at about Rs 165 crore, as I said the debt is only to the extent of Rs120 crore – this company with an enterprise value of Rs 300 crore is ruling at a very low valuation. Their brand itself has been estimated in the past at about close to Rs 130-140 crore.There is good upside. We have been seeing renewed interest coming in the textile stocks. I think if someone can take a call on this stock with six months view, one can expect at least 60% return from hereon.



Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

2 STOCKS TO BUY NOW:-A VERY SHORT TERM DELIVERY STOCK

RISHABHDEV TECHNO-(533083)- CMP-16.5/- ITS A VERY SHORT TERM DELIVERY STOCK FOR U..... T-20/- (PAID MEMBERS WERE REC. YESTERDAY TO BUY AROUND 15.95/-)


EXIDE IND- CMP 119/- GOOD RESULTS,GOOD ON CHART...... BUY FOR TARGET OF 130/-(MAX-5/6 DAYS HOLD)

Operator call and not mine.Am out of short term stuff.


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

Prakash Industries - Stock Investment Research Report

Stock report on Prakash Industries from  My stock brokers ,stock market investment research team. They have recommended to buy stocks of Prakash industries@CMP=206 for ~30% returns on the back of hike in production and capacity expansion.
The company will spend Rs 33 billion over five years to nearly double its crude steel production, expand its sponge iron capacity to capitalize on iron ore integration and put up a 625MW power plant.
The company's steel making capacity will increase from 550,000tpa to 1mtpa by March 2012 and its sponge iron capacity will increase from 400,000tpa to 1mtpa. Prakash Industries is extracting nearly 1mtpa of coal from the Chotia mine to feed its 100MW CPP and sponge iron kilns.
Market Cap 2,456.13

* EPS (TTM) 18.65

* P/E 11.40

* P/C 9.53

* Book Value 73.65

* Price/Book 2.89

Div(%) 0.00

Div Yield(%) -

Market Lot 1.00

Face Value 10.00

Industry P/E 22.41

Over FY09-12, expected EBITDA is to grow at 39% CAGR to Rs 7.9 bn due to raw material integration. Expected PAT growth is of 40% CAGR to Rs 5.6 billion. Target price comes to be Rs.285 (30% upside) based on 5.5x FY12E EV/EBITDA.


Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT

LEARNING SECTION-----The cognitive process of acquiring skill.

How to take profits in bull and bear markets

1. Check market indicators for overall direction

2. Scan the industry groups to know which one to zero in.

3. Cut out the stocks with the most potentially profitable formation within the favourable groups

4. Concentrate majority of buying in continuation-type buy patterns that are already in Stage 2, and reverse for bear markets

5. Know where protective stop will be (ALWAYS use it) set before entering the order – if it’s too far away, look for other stock or wait to purchase when safer level forms

6. Never sell a stock in Stages 1 or (especially) 2, AND never buy a stock in Stages 3 or (especially) 4 – stage analysis can be applied to any investments that are governed by supply and demand

7. Never guess a bottom (and go long)

8. Don’t feel that one has to be 100% invested all the times. Differentiate when charts and indicators point to fully invested and when to extreme caution

9. Always be in harmony with the market – buy Stage 2 strength; sell Stage 4 weakness

10. In case of conflict between price volume action and the earnings, always go with objective message being supplied by technical approach

11. Always be consistent. Keep a diary and analyze actions

READING CHARTS Daily for very short traders, weekly for intermediate (several months) traders. Below specifically on weekly charts:

1. Look at each high-low-close spike – forming pattern with insight into next major move

2. Look at volume plot – very important that volume is large and expanding on breakout

3. Look at 30 week MA – never long if P below declining 30-week MA; never short if P above rising 30 week MA

4. Be aware of its long-range background (yearly high-low, long-term support/resistance)

5. Look at its relative-strength line – long on up trend, short on downtrend; watch those situations where it shifts direction

Stage 1: basing area. After several months decline, start sideways trend. Volume lessens (often starts expanding towards end stage 1). 30 week MA begins to flatten out.

Stage 2: advancing phase. Ideal time to go long when stock swinging out of its base into this more dynamic stage. Breakout above resistance zone and 30-week MA should occur on impressive volume. Usually after initial rally at least one pullback (the less the pullback the stronger the stock).

30 week MA usually starts moving up shortly after breakout. Expect price to move two steps forward and one sharp step back – ok as long as above 30 week MA.

When angle of ascent of MA slows down considerably and prices closer and closer to MA, stock becomes a hold.

Stage 3: top area. Upward advance loses momentum and stock starts trending sideways. Volume usually heavy and moves sharp and choppy.Prices tiptoes below and above MA on declines and rallies. Keep emotions in check.

Stage 4: declining phase. Stock breaks below bottom of support zone.

WHEN TO BUY

Stock initially moves out of Stage 1 base and enters Stage 2. Risk extremely low (support just beneath purchase price) and excellent upside potential (entire Stage 2 advance lies ahead), but need patience (it can take time for solid Stage 2 momentum to build).

After Stage 2 is well underway, when stock drops back close to its MA and consolidates. MA should still be clearly trending higher. Then it breaks out anew on top of resistance zone – this is continuation buy.

Early in bull market plenty of stocks breaking out for the first time, later very few but still plenty of continuation variety buys

Rule of thumb: 80% continuation buys, 20% early stage 2 variety

Use buy stops, within set limits, good-til-cancelled (GTC):

A. Don’t have to watch market closely – frees attention

B. Better, less emotional decision (not involved in market energy)

The more mechanical the system and the less subject to judgements and emotions, the more profitable.

Buying/Selling patterns

4 Year presidential cycle: first year bear, second year bear until midway then bullish, third year most bullish, fourth year choppy – usually first half weak, then strong

Months - bullish: Nov-Jan, April. Bearish: Feb, May, June, September

Day of week: Monday worse, Friday strongest.

Day preceding holidays usually bullish.

Selecting the sector

Use same criteria than stocks, most important criteria that group be healthy (not in Stage 3 or 4), breaking into Stage 2 with a minimum of resistance overhead. One difference: if group well in Stage 2 far above support and one stock just breaking out of Stage 1 basis it’s ok to buy; same if group just moved in Stage 2 but one stock as continuation pattern, ok to buy.

For trader, ideal is a continuation breakout within a dynamic group exhibiting the very same sort of pattern.

If several sectors are well, best will be one with best individual top chart patterns.

REFINING BUYING PROCESS

ResistanceAlways check where and how much overhead resistance there is on any stock, first on 2-4 years, then on 10 years chart

VolumeNever trust a breakout that isn’t accompanied by a significant increase in volume. Either:

a. a one-week volume spike that is at least twice the average volume of the past few weeks, or

b. a volume build-up over the past 3-4 weeks that is at least twice the average volume of the past several weeks, coupled with at least some increase in the breakout we

Relative strengthMeasure of how strong a stock is in relation to the overall market. Never buy a stock if its relative strength is in poor shape.

Buying checklistCheck overall direction of market

Scan the industry groups that look best technically

List stocks in favourable groups that have bullish patterns but are in trading range. Write down price they need to break out.

Narrow down the list discarding ones with overhead resistance nearby.

Narrow list further by checking relative strength

Set what stop loss level should be – discard unacceptable ones

Put in buy-stop orders for half of position on stocks that meet buying criteria

If volume is favourable on breakout and contracts on decline, but other half position on a pullback near the initial breakout

If volume pattern is not high enough on breakout, sell stock on first rally. If it fails to rally and falls back below the breakout point, immediately dump it.

Further tips on buyingSome chart patterns one needs to be familiar. Do not anticipate their completion.

1. head-and-shoulder (easier on daily than weekly charts) – most powerful and reliable of all bottom formations. Important indicators: 30 week MA not declining and crossed by prices at breakout; there must be a significant increase in volume on the breakout. Head-and-shoulder can also be indicator for a group or overall market, if several similar patterns in same time span.

2. double bottom – very profitable formation when it occurs in conjunction with impressive volume, favourable relative strength and minimal overhead resistance (frequent, so look for confirmation signals).

The bigger the base, the bigger the move.

Diversify stocks and groups.

WHEN TO SELL

Don’t average down in a negative situation

Don’t refuse to sell because the overall market trend is bullish

Don’t wait for the next rally to sell

Always have protective stop-loss. When set initial stop, pay less attention to 30 week MA and more to prior correction low. Place it below round number.

After buy on breakout, place stop-loss below lower end of base.

When trending, give it plenty of room and raise it after each substantial correction have stopped.

At stage 3, become more aggressive with stoploss. Do not wait for 30 week MA to be violated before selling.

Using trendlinesWay of locking in even more of the profits. Sell at least part position when trendline (connecting at least 3 points) violated.

Either whole position stoploss just under trendline, or half there and half under last correction low.

Swing ruleDoes not appear often, but very accurate. When there is an important decline, subtract new low price from previous peak, then double it: this gives potential near term price area for upswing.

LosingTaking a loss on some positions is just a cost of doing business.

SELLING SHORTStocks fall much faster than they rise, because fear causes a panic reaction while greed takes a while to simmer.

Don’t short a stock that is too thin – or covering position will raise the price.

Don’t short a stock in Stage 2 (above 30 week MA)

Don’t short a stock that is part of a strong group.

Always set a buy stop.

Sequence

1. Market. Check that market is bearish

2. Group. Isolate market sectors that are potentially vulnerable. In group chart: below its 30 week MA, relative-strength is trending lower, possible negative chart pattern, several chart from that sector are technically weak

3. Individual chart pattern. Stock should have had significant runup before top was formed. Far from significant support areas.

4. Relative strength. Indicator must be trending lower.

5. Volume. Not a major priority on the short side.

Ideal to short at breakout, but ok to short well into Stage 4. However, make sure a consolidation pattern forms beneath the declining MA and then a new breakdown occurs.

MARKET LONG TERM INDICATORS

Stage analysis

30-week MA

Advance-Decline lineAs long as AD line and index are moving in gear it’s ok. When AD line starts losing upside momentum and the index charges higher, that’s a negative divergence signalling market trouble ahead – also negative divergence if the index is rallying to new high and the AD line refuses to confirm. If the divergence takes place over a short period of time (several weeks) the decline is likely to turn out to be a correction within an ongoing bull market. If the divergence continues to take shape over a long period of time (several months), then the market advance is becoming dangerously selective, with money out of the broad market and into blue chips. Sign of a problem.

When a major bottom is forming, the index will reach the ultimate low and then refuse to drop further, while the AD line continues to move lower and lower, this is a positive divergence.

Whether top or bottom, the longer a divergence lasts, the more significant the eventual reversal will be.

Graph the NYSE AD line on the same page as the DJ Industrial. Can also use point and figure on a daily basis.

Momentum index 200 day moving average of AD line. Its most important signal is the cross of the zero line (the longer it was above or below, the more significant the cross).

It’s more helpful at spotting tops than bottoms. At the bottom, it acts more as a confirming signal. In a bull market, it peaks before the DJ.

New hi – new lo On a weekly basis. It offers very early warning.

When consistently positive or negative, it’s a long term indication. When an important divergence takes shape, a reversal in the trend is starting to form.

REDUCING RISK

To increase probability of success when trading options

1. Buy a call option only on a stock that is in Stage 2 or is moving into Stage 2. Buy a put option only on a stock that is in Stage 4 or is first entering that phase

2. Buy only an option that has big potential – you are going to be wrong more often with options than with stocks. Selectivity is absolutely crucial!

3. Give a reasonable amount of time before expiration – 40/50 days to 3 months

4. Buy an option that is close to the striking price and, if possible, in the money. Or if it’s out of the money, make sure it’s very close to the striking price.

5. Use a very tight protective stop (mental) on option positions – any sign of weakness is a reason to say goodbye to a position

Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken

E-MAIL,sharekhan.guide@gmail.com

contact;09013177977,AMIT