Posts Tagged ‘Reliance Capital Stock’

Stock Watch-Reliance Capital

Thursday, November 8, 2007 5 comments

Reliance Capital is looking extremely strong in this falling market. This might be a good short term bet on the long side. Watch out.


Why is it psychologically difficult to buy high and sell higher?

Thursday, July 19, 2007 8 comments

If you are a trend follower or “momentum” investor, then you have to buy high and sell higher! Even though I have proved to you that this is one of the few things that actually works in the market using “Infosys Trend Analysis” article as well as through my various stock picks like Asian Electronics or Reliance Industries,most of the people find it difficult to do so.

One may ask-if I am convinced that this makes money for me, then why won’t I follow it?

Simple-because our minds are not trained to follow this advice.

Tell me what happens when I show you chart of a stock like L&T, BHEL or Bharti which is hitting all time highs. The first thing you notice is that stock has “already’ gone up 2-3 times. Now you start thinking- the stock is already trading too high, what will I do if I buy “now” and stock falls? What if this is the top for the stock and the market?

Slowly your “fear” of losing comes into play and you can’t muster enough “courage” to jump in!So you let it pass.

Why didn’t you buy? You didn’t buy because you didn’t want to feel the pain of “losing”! Absolutely fine- who wants to be a loser in the markets?And more importantly, who wants to have “pain” in his/her life? Good decision!

Next lets see what happens- the stock you missed out,say Bharti, doubles in value in next three months. Now what do you “feel”? You start to the pain of “having missed out”. Oh- I wish I had invested my money in Bharti and doubled it! Everytime you see that stock moving up, you feel that pain.

Next lets say the stock starts to move up very fast. At the same time your friend tells you that he almost tripled his money by investing in Bharti stock.This causes that “pain of missing” very intense. When you can’t stand that “pain” anymore , you jump in and buy the stock. You get some relief that “finally” you are in the same boat as everyone else!

The stock continues its upmove for a few more days-you feel happy and proud of your decision. Then suddenly, one day the stock reverses and starts to trade below your “buy” price.Now what do you feel- you actually ‘feel” the pain of losing and the pain of “being wrong”. You start to “hope” and “pray”. Your losses mount up everyday and so does your “pain”. Finally to “avoid” that pain, you sell the stock at a heavy loss. And as soon as you sell the stock, you find that the stock begins to rise again. You were “unlucky” to have sold at the bottom! You say to yourself and the world- this market is manipulated, this market is for gamblers etc etc. End of the story!

If you observe closely, this is how most of the people behave in the markets(even professional investors).Check out what happenned in India and US during the 2000 technology bubble.
Many people have missed this rally in Indian Markets because they couldn’t afford to buy high.And now they are feeling the pain of “missing” out this rally. This rally might “end” when these guys can’t stand this pain and finally jump in!Now will that happen at 4600,4700 or 5000-it is very difficult to say.

So in a nutshell “pain avoidance” and “loss avoidance” causes us the most harm in the markets. Either learn to identify and confront this “pain” or continue to “lose” money in the markets-the choice is yours.

Let me know of your observations and share your own experiences.What stops you from buying high?

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Sector Watch-Telecom

Tuesday, June 26, 2007 Leave a comment

Bharti Airtel and RCOM both are consolidating nicely and slowly trending upwards. I have already discussed Bharti Airtel before. As it has closed above 830,the chances of it continuing the uptrend has increased.

RCOM has resistances around 531-532 levels beyond which there could be accelerated move.

Idea Cellular might give a move after it closes above 120 levels.

Is this Spice IPO “rub off” effect?

Markets Update-Bharti is up around 1.5% while RCOM is still failing to cross 532 levels. CRISIL is again locked in the upper circuit for second day in the row. Is it going to be the next Divi’s lab in the making?

Reliance Capital which we have been discussing again and again after consolidation has moved up again to 1120 levels .Just because a stock stops for some days doesn’t mean that the uptrend is over!The stock has moved close to 7% from 1040 levels within a week.

Look at IDFC. It is slightly down and consolidating. Does it mean that uptrend in the stock is over?

Titan is almost up 8% at around 1270 levels hitting new lifetime highs. This makes the stock probably a little more expensive!

NIFTY is also slowly inching upwards.Currently at 4276 levels.Check what we had discussed last week to get the perspective and trade accordingly.

Market Open Commentary- June 20

Wednesday, June 20, 2007 Leave a comment

The markets have opened firm and facing some supply around 4240-4250 levels. Short term traders might be booking profits and or some shorts who don’t wish to cover might be shorting some more.
What I like about the movement is that it not very volatile which indicates that there is still scepticism and caution in the market. There is an absence of Euphoria and “strong” belief.

Banking stocks as discussed yesterday have all opened strong-UTI bank, SBI HDFC bank,Kotak Mahindra Bank etc.Get an entry point if you wish to add such stocks.

Reliance Capital is continuing its upmove trading around 1090 levels. It might actually be good that the stock is moving upwards in non volatile way. I feel if the closing is good for this stock, this stock might surprise a lot of people. Cover your risk and go long.

I-Flex as discussed yesterday is again up at around 2580. The only IT stock showing some strength.

ABB, BHEL,LT are again trending up nicely-doing it without creating much noise and grabbing much attention!

Ashapura Minechem -a mid cap which we discussed earlier is again making an upmove after consolidation.

Asian Electronics is also consolidating after a upmove till 790 from 660.

Reliance Capital zooms

Tuesday, June 19, 2007 2 comments

Reliance capital that I discussed today morning for trend traders finally broke out. Last I checked it was 1072 up almost 4%. The stock might do well in short to medium term.

Markets Update- Some countertrend ideas for short term traders

Tuesday, June 19, 2007 2 comments

The NIFTY continues to drift sideways with a downward bias. There is clearly a lot of supply coming around 4200 levels. if NIFTY closes below 4080, it will definitely be the time to cut longs and press the short buttons. Another good trade might be to go short in and round 4200 levels. But I feel that market is not showing any direction in the short term. Long-term it is of course bullish.

Though I am not a counter trend trader but for people who like to add stocks while they are falling,there are two very good candidates in my opinion.

1. TCS- The stock has long term supprts in the 1140-1160 region. So one can definitely go long with these stop losses. The stock might give traders a” pop up”.A close below 1140 might see long term trends being reversed.

2. Another stock which I should have recommended y’day but still doing it today is Ashok Leyland. Again a stock going down but very good supports at 35. A break below that might take it to 30 levels!

For trend traders, I would recommend to keep an eye on RELIANCE CAPITAL. Any close above 1050 might be a good entry point.

Good luck in the markets for today!

Here are the charts: