MARKETS FOR WEEK ENDING 26TH OCTOBER


SO, FOR THE COMING WEEK BATTLE LINES ARE DRAWN BETWEEN THE BULLS AND THE BEARS  WITHIN THE SPOT NIFTY ZONE OF 5722 AND FUTURE ZONE OF 5757 ON THE HIGHER SIDE AND 5633 SPOT & 5636 FUTURE ON THE LOWER SIDE. A BREACH OF NIFTY ON THE LOWER SIDE CAN BE BOLDLY SHORTED FOR MUCH LOWER LEVELS AS IN THAT CASE NIFTY MAY FALL TO TAKE SUPPORT ON THE MAJOR SUPPORT LINE COMING FROM THE LOWS OF 4TH JUNE AS CAN BE SEEN IN THE CHART ABOVE. DURING MONTH OF SEPTEMBER, SPOT NIFTY HAD MADE A LOW OF  5215 AND A HIGH OF 5735. DURING THIS MONTH OF OCTOBER NIFTY SPOT HAS ALREADY BREACHED SEPTEMBER MONTH HIGH OF 5735 TO MOVE UP TILL 5815. HENCE THERE IS EVERY POSSIBILITY THAT OPERATORS WILL PULL NIFTY FURTHER DOWN  DURING THE REST OF OCTOBER TO COMPENSATE A LITTLE MORE OF THE NIFTY LEVELS  FROM THE LOWS OF SEPTEMBER SO THAT THE OPERATORS CAN WEED OUT WEAKER HANDS AND TAKE SUITABLE LONG POSITIONS FOR THE NOVEMBER MONTH.

SO, BOLDLY SHORT & ONLY SHORT IN CASE SPOT NIFTY SLIPS & MORE IMPORTANTLY SUSTAINS BELOW 5633 AND BOLDLY GO LONG IF BY CHANCE DURING THE REMAINING DAYS OF OCTOBER MONTH NIFTY SPOT MANAGES TO BREACH 5723 TO SUSTAIN ABOVE IT. THE WEEKLY PERFECT DOJI  & 7TH NRB MADE BY NIFTY WITH LOW OF 5633 AND HIGH OF 5723 WILL PLAY A MAJOR ROLE IN DECIDING WHICH WAY NIFTY SPOT WILL MOVE BASED ON THE BREACH & MORE IMPORTANTLY SUSTAINING ABOVE 5723 FOR THE UP SIDE OF 5633 FOR THE DOWN SIDE. WITH THE TRUNCATED WEEK COMING , THERE IS MORE LIKELY-HOOD OF A REPEAT OF RANGE BOUND CONDITION OF LAST WEEK WITH A NEGATIVE BIAS. WITH DOW OPERATORS PLAYING MERRY HELL WITH THE REST OF WORLD MARKETS BY SUITABLY MANIPULATING DOW & ITS FUTURES, THE CHANCES OF A DOWN SIDE BREACH IS MORE LIKELY TO WEED OUT WEAKER HANDS BEFORE THE MEGA BULL RUN RESUMES.

AS CAN BE SEEN IN THE DAILY CHART NIFTY HAS INITIAL SUPPORT AROUND THE FIRST CHANNEL LOWS OF AROUND 5636 TO 5630. THE BREACH OF THIS INITIAL CHANNEL LOWS CAN SEE NIFTY FALLING LIKE A STONE TOWARDS THE LOWER CHANNEL LOWS AROUND 5500 TO 5475  SPOT LEVELS AFTER SOME DELAY  AROUND THE 50 DAY EMA AROUND 5530 SPOT. PRESENTLY 20 DAY EMA AROUND 5656 SPOT LOOKS PERFORATED TO ALLOW THE BEARS TO PIERCE THROUGH IT AND IF  THE BULLS ARE DETERMINED NOT TO GIVE AN INCH BELOW 5630 SPOT LEVELS THEN THE BULLS CAN PUSH BACK THE BEARS THROUGH THE SAME PERFORATED 20 DAY EMA TO MOVE UP TOWARDS 5722 SPOT AGAIN TO MARCH UP TOWARDS THE OCTOBER HIGHS OF 5815 SPOT.

MARKETS FOR 22ND OCTOBER


THE INDICATORS IN THE DAILY CHARTS LOOK OVERSOLD AND POSSIBILITY OF A GOOD BOUNCE MAY BE THERE AFTER THE DOW OPERATOR INDUCED GAP DOWN ON MONDAY. WITH THE DAILY STOCHASTIC LOOKING OVERSOLD, SO ALSO THE SAME OSCILLATOR IN THE INTRADAY 30 MINUTE CHART, AN INITIAL DOW INDUCED SLIDE TOWARDS 5640 TO 5630 WILL ATTRACT HEAVY BUYING FOR GOOD INTRADAY GAINS. NIFTY FUTURES  WHICH HAD CLOSED AT 5684 ON FRIDAY, MOST LIKELY WILL OPEN GAP DOWN INDUCED BY THE FRIDAY 19TH OCTOBER  200 POINT ORCHESTRATED FALL IN DOW. NIFTY FUTURE  WILL OPEN GAP DOWN BELOW  OR AROUND THE CRITICAL FUTURE LEVEL OF 5660 &   HAS INITIAL INTRADAY SUPPORT AROUND  5644 FOLLOWED BY 5633 THAT MUST SEE A GOOD RETRACEMENT BOUNCE FROM HERE. HOWEVER SUSTAINING BELOW 5630 TO 5625 MAY SEE NIFTY FUTURES FALLING  FURTHER  TO THREATEN THE 5600 LEVELS.

SIMILARLY ON THE HIGHER SIDE IN CASE OF A GOOD PULL BACK BOUNCE AFTER THE DOW INDUCED GAP DOWN, IN CASE NIFTY FUTURES CAN MOVE UP AGAIN TO BREACH AND SUSTAIN ABOVE THE CRITICAL FUTURE ZONE OF 5700 TO 5706, THEN ONE WILL OBSERVE MASSIVE SHORT COVERING TO PROPEL NIFTY FUTURES TOWARDS 5715 TO 5720 SUSTAINING ABOVE WHICH WILL BRING THE SECOND BOUT OF SHORT COVERING TO SEE NIFTY FUTURES MOVING UP TOWARDS 5735 TO THREATEN THE CRITICAL 5750 FUTURE LEVELS. LONG TO MEDIUM TERM INVESTORS MUST MAKE FULL USE OF THE EXTERNAL OPERATORS’ MANIPULATED FALL IN NIFTY TO BUY GOOD & FUNDAMENTALLY STRONG  STOCKS FOR GREAT GAINS AFTER THE RESUMPTION OF THE MEGA BULL RUN TOWARDS  NEW LIFE TIME HIGHS.

MARKETS FOR 19TH OCTOBER

NIFTY BEHAVED EXACTLY AS WAS ANTICIPATED AND THE MOMENT FUTURES LEVEL OF 5676 WAS DECISIVELY BREACHED, MASSIVE SHORT COVERING PROPELLED NIFTY TOWARDS THE NEXT CRITICAL ZONE OF 5696 ABOVE WHICH ANOTHER BOUT OF SHORT COVERING TOOK NIFTY FUTURES TOWARDS THE EXPECTED LEVEL OF 5740 . AS OF NOW IT LOOKS THE BOTTOM MADE BY SPOT NIFTY AROUND 5630 WILL HOLD AND FROM HERE ON NIFTY CAN INCH UP TOWARDS THE HIGHS OF 5800+ LEVELS, THANKS TO THE FORMATION OF BULLISH WOLFE WAVES IN 2 HOURLY, HOURLY, 30 & 15 MINUTE CHARTS OF NIFTY FUTURES, THAT HAS THE TARGET OF 5800+ LEVELS FOR NIFTY FUTURES AS CAN BE SEEN IN THE HOURLY CHART ABOVE. HOWEVER ONE

MARKETS FOR 18TH OCTOBER

NIFTY AS EXPECTED COULD NOT SUSTAIN ABOVE THE GIVEN CRITICAL LEVEL OF 5680 SPOT & AFTER  OPENING WITH A GAP UP HIGH OF 5684 TO TRIGGER SHORT COVERING & INDUCE BUYING INTEREST, NIFTY SPOT CONTINUOUSLY FELL TO MAKE A DAY LOW  OF 5633 BELOW THE TUESDAY’S LOW OF 5636 SPOT TO AGAIN MOVE UP DURING THE LAST HALF HOUR TO A HIGH OF 5666 TO FINALLY CLOSE AROUND 5656 SPOT LEVELS. ALTHOUGH OPERATORS’ VENOM CONTINUES TO STAY WITH THE MARKETS TO SEE FURTHER LOWER LEVELS THIS WEEK YET TECHNICALLY SPOT NIFTY SEEMS TO HAVE MADE A BOTTOM AROUND THE 5630 LEVELS .

WITH THE FORMATION OF PROMINENT WOLFE WAVES IN THE 60,30,15 & 5 MINUTE CHARTS, IT IS QUITE POSSIBLE THAT NIFTY MAY SWING UP FROM THE CURRENT LOWS

MARKETS FOR 17TH OCTOBER

WELL, THE MARKETS ARE MOVING EXACTLY AS PER PREDICTIONS IN THE WEEKLY ANALYSIS  BELOW  WHERE IT WAS MENTIONED NIFTY WILL BE BROUGHT DOWN TILL 5636  SPOT LEVELS  & ON TUESDAY 16TH  OCTOBER NIFTY SPOT WAS BROUGHT DOWN TILL 5635.80 TO BOUNCE FROM THERE. NIFTY FUTURES WHOSE PREMIUM WAS HIGHER EARLIER TO TUESDAY ALMOST LOST ALL ITS PREMIUM AND TESTED 5638 VERY NEAR TO EARLIER GIVEN SPOT NIFTY LEVEL OF 5636. REMEMBER THIS MARKET IS ENTIRELY DRIVEN BY  BOTH INTERNAL & EXTERNAL OPERATORS SPECIALLY DOW OPERATORS FROM U.S.. ON TUESDAY ALSO ONE WILL FIND  DOW WHICH IS NEARLY 120 POINTS

MARKETS FOR 16TH OCTOBER


AS EXPECTED NIFTY FUTURES COULD NOT CROSS THE CRITICAL 5720 TO 5725 LEVELS THAT SAW EVERY NOVICE TRADER EVEN INDULGING IN SHORTING THE MARKETS. NOW FOR TUESDAY IN CASE NIFTY FUTURE FAILS TO BREACH THE MAGIC LEVEL OF 5717 THEN SIMILAR MULTI BARREL SHORTING MAY BE DONE TO SEE BULLS BEING SHUNTED DOWN TOWARDS 5670 TO 5660 AND IN CASE NIFTY FUTURES FAILS TO HOLD 5656 MAGIC LEVELS THEN  THE 2ND BOUT OF CARGO SHORTINGS BE INITIATED TO SEE MUCH LOWER LEVELS. HOWEVER IN CASE NIFTY FUTURES MANAGES TO BREACH THE MAGIC LEVEL OF 5717(OTHER THAN THE DECEPTIVE GAP UP LIKELY TO BE INITIATED

MARKETS FOR 15TH OCTOBER

THE WEEK ENDING 12TH OCTOBER HAD A NEGATIVE CLOSING FOR NIFTY ON A WEEK ON WEEK BASIS. COMPARED TO THE PREVIOUS TRUNCATED WEEK ENDING 5TH OCTOBER WHEN NIFTY SPOT HAD CLOSED AT 5747, THE WEEK ENDING 12TH  OCTOBER SAW NIFTY SPOT CLOSING AT 5676. THERE WAS ALSO A LOWER HIGH THIS WEEK WITH NIFTY SPOT MAKING A HIGH OF 5752 SPOT COMPARED TO ITS PREVIOUS WEEKS HIGH OF 5815 SPOT. BESIDES SPOT NIFTY HAVING CONFUSED THE ISSUE WITH THE 5TH OCTOBER MANIPULATED LOW OF 4888 SPOT, INTERESTINGLY NIFTY FUTURE MADE A LOWER LOW THIS WEEK AT 5676 COMPARED TO ITS PREVIOUS WEEK’S LOW OF 5718. ALTHOUGH THIS WEEK NIFTY HAS CLOSED NEGATIVE FOR THE FIRST TIME AFTER 5 CONSECUTIVE WEEKS OF +VE CLOSINGS, YET WHAT IS MORE ALARMING IS THAT THIS

MARKETS FOR 12TH OCTOBER

THE BIG RISE IN NIFTY EVEN AFTER DOW’S OVERNIGHT FALL OF MORE THAN 100 POINTS GENERATED THE ELEMENT OF SURPRISE AFTER NIFTY MADE AN INTRADAY LOW OF 5636 SPOT BELOW WEDNESDAYS LOWS OF 5646  SPOT. AS REGARDS NIFTY FUTURES, AFTER MAKING A DAY LOW OF 5656 THE FUTURES MOVED UP LIKE TRACER BULLET TOWARDS THE GIVEN STOP LOSS LEVEL OF 5710 ABOVE WHICH EVERY ONE REVERSED AND TURNED A BUYER AS WAS INDICATED YESTERDAY. THE RISE OF NIFTY FUTURES TO A DAY HIGH OF 5749, THE TWIN HIGH OF 9TH OCTOBER PUTS THE BULLS IN THE DRIVER’S SEAT TO MOVE UP FURTHER AFTER A MINOR PAUSE ON FRIDAY. HOWEVER IN CASE NIFTY FUTURES ON FRIDAY MOVES UP TO BREACH AND SUSTAIN

MARKETS FOR 11TH OCTOBER


AS WAS WRITTEN FOR YESTERDAY, DOW WILL BE MADE TO FALL FOR NEXT FEW DAYS AND NEWS EVENTS THERE WILL BE SUITABLY MANIPULATED TO SUPPORT DOWS FALL TO ADVERSELY INFLUENCE REST OF THE WORLD MARKETS FOR NEXT FEW DAYS. ONE WILL ALSO OBSERVE THAT AFTER THE CLOSURE OF EUROPEAN MARKETS DOW WILL BE ORCHESTRATED TO FALL MORE. SO, CONTINUE HOLDING YOUR SHORTS BOLDLY AND ADD MORE SHORT POSITIONS ON EVERY INTRADAY RISE AS LONG AS NIFTY FUTURES FAILS TO SUSTAIN ABOVE THE CRITICAL LEVEL OF 5710 TO REVERSE FOR LONGS ONLY ABOVE NIFTY FUTURE LEVEL OF 5710.

FOR NEXT FEW DAYS, LEVELS ARE NOT IMPORTANT & THAT ONE MUST TRADE IN THE SHORT SIDE OF THE MARKET IS MORE IMPORTANT. DOW WILL BE MADE TO FALL FOR NEXT FEW DAYS, SO HOLDING SHORT POSITIONS WITH A STOP LOSS ABOVE 5710

MARKETS FOR 10TH OCTOBER


AS WAS INDICATED EARLIER, THE ADVERSE EFFECT TOOK ITS TOLL ON WORLD MARKETS ON  TUESDAY & DOW FELL BY 110 POINTS ON TUESDAY NIGHT THAT WILL SEE ITS WHIPPING ASIAN BOYS SHIVER ON THE MORNING OF WEDNESDAY. AFTER THE MAKING OF AN INSIDE DAY BY NIFTY ON TUESDAY FOLLOWING THE BEARISH ENGULFING OF NIFTY FUTURES ON FRIDAY, IT  REMAINS HIGHLY VULNERABLE TO FURTHER FALLS AND A SLIDE BELOW TUESDAY’S LOWS OF 5677 SPOT OR MONDAY’S LOWS OF 5666 SPOT NIFTY LEVELS,  WILL INVITE  EVERY TOM, DICK & HARRY TO TURN OUT BEARISH AND INDULGE  IN CARGO SHORTING TO DRIVE INDIAN MARKETS

MARKETS FOR 9TH OCTOBER


SO, FINALLY THE PAUSE ARRIVED AS WAS PREDICTED EARLIER, AND MOST LIKELY THIS PAUSE MAY CONTINUE  FOR SOME MORE SESSIONS.AS LONG AS THE  BEARISH ENGULFING  HIGH OF FRIDAY AROUND NIFTY SPOT LEVEL OF 5815 IS NOT BREACHED ON A CLOSING BASIS, SHORT ON RISE WILL FAVOR THE TRADERS ALTHOUGH SOME INDIVIDUAL STOCKS WILL SHOW GREAT UPWARD MOVEMENT DUE TO THIS PLANETARY AS WELL AS THIS TEMPORARILY BEARISH  TECHNICAL SET UP OF NIFTY.

FOR INTRADAY OR SWING TRADING OF NIFTY FUTURES, AS LONG AS NIFTY FUTURES SUSTAINS BELOW THE CRITICAL LEVEL OF 5788, ONE SHOULD NOT HESITATE TO

MARKETS FOR 8TH OCTOBER


THE TRUNCATED WEEK ENDING 5TH OCTOBER SAW NIFTY CLOSING AT 5746 COMPARED TO ITS PREVIOUS WEEKS CLOSING OF 5703. THE WEEK ALSO SAW A HIGHER WEEKLY HIGH AND HIGHER WEEKLY LOW FOR NIFTY FUTURES (JUST DO NOT BOTHER FOR WHAT HAD HAPPENED ON FRIDAY 5TH OCTOBER, WHEN NIFTY SPOT WAS PULLED DOWN TILL 4888 BY BIG OPERATORS IN CONNIVANCE WITH THE EXCHANGE AUTHORITIES SIMILAR TO WHAT HAD HAPPENED TO NIFTY EXACTLY  FIBONACCI 5 YEARS BEFORE ON 17TH & 18TH OCTOBER 2007.  BE ABSOLUTELY SURE THE MANIPULATIVE ACTION OF FRIDAY WAS JUST A TESTER ROUND BEFORE THE ACTUAL BARRAGE IS TO BE FIRED & MORE OF SUCH MARKET MANIPULATION  WILL

MARKETS FOR 5TH OCTOBER

NIFTY CONTINUED WITH ITS UP MOVE AND AFTER OPENING GAP UP AROUND SPOT 5750, IT  MOVED UP TO A DAY HIGH OF 5808 TO CLOSE AROUND 5787  MUCH ABOVE THE 8TH JULY 2011 HIGH OF 5740. THE BREACH OF TWIN 7TH NRBS HIGHS OF MONDAY AND WEDNESDAY PLAYED THE TRICK AND MASSIVE SHORT COVERING CATAPULTED NIFTY SPOT ABOVE THE 5800 LEVELS. NOW THE NEXT TARGET FOR SPOT NIFTY CAN BE AROUND THE 6TH APRIL 2011 HIGH OF 5944 WHICH IS THE TARGET OF THE INVERTED HEAD & SOLDER FORMATION AS WAS DEPICTED DURING EARLY SEPTEMBER. WHENEVER THE MARKETS MOVE UP THE CONTRARIAN FEELING OF CORRECTION ALWAYS COMES TO THE MIND AND TRADERS GET INTO SHORTING MODE TO BE TRAPPED AGAIN AND AGAIN.

SO, IT IS WISER TO HOLD THE LONGS AND ADD MORE LONGS ON DECLINES. AS LONG AS SPOT NIFTY DOES NOT CLOSE BELOW 27TH SEPTEMBER LOW OF 5640, NIFTY WILL MOVE UP & UP ONLY IRRESPECTIVE OF THE CONDITION OF ASIAN MARKETS OR THE HIGHLY OPERATOR INFECTED SGX NIFTY. SAFE TRADERS

NIFTY - 5-minutes Candle Chart (Auto Updated Every 3 Seconds)

Chart Reading Tips:

When 10 minutes EMA is above 34 minutes EMA it is an uptrend. Vice versa for a downtrend. When EMAs are conflicting it denotes a sideways market. 200 minutes MA slope denotes the longer term trend. If 200 minutes MA is rising, long term trend is up, vice versa for a down-trend. Keep Stoploss below recent swing low or keep Stoploss of Parabolic- SAR dots. Positive EMA crossover confirms the entries. Exit when RSI becomes overbought or use trailing Stoploss.



MARKETS FOR 4TH OCTOBER

NIFTY CONTINUED WITH  ITS UPWARD MOVE WITH ANOTHER HIGHER HIGH, HIGHER LOW AND A HIGHER CLOSING. INTERESTINGLY WEDNESDAY’S   PRICE ACTION WAS ANOTHER 7TH NRB WITH JUST 28 POINTS  SIMILAR TO MONDAY’S NARROW RANGE OF 29 POINTS AND AS LONG AS HIGHER HIGHS ARE MADE WITHOUT CLOSING BELOW THE LOW OF THE LAST BUT ONE DAY, THE UP MOVE IS LIKELY TO CONTINUE. SO AS LONG AS SPOT NIFTY IS NOT PULLED DOWN TO CLOSE BELOW THE MONDAYS LOWS OF 5694 SPOT, ONE MAY CONTINUE TO HOLD LONGS AND ADD MORE LONGS ON EVERY DECLINE BY HAVING THE STOP LOSS POINT BELOW MONDAYS LOWS OF SPOT 5694.

MARKETS FOR 3RD OCTOBER

NIFTY SPOT HAD CLOSED  AROUND 5719 ON MONDAY WITH A HIGH OF 5723 AND LOW OF 5694. WHAT IS MORE IMPORTANT FOR MONDAY’S LEVELS IS THAT NOT ONLY NIFTY HAS CLOSED AROUND THE HIGHEST POINT OF THE DAY AFTER THE INITIAL WEAKNESS DURING THE DAY BUT HAS FORMED A VERY NARROW RANGING BAR FOR ONLY 29 POINTS WHICH IS A 7TH NRB. THIS CRITICAL 7TH NRB HAS ALL THE POWERS IN IT TO SEE SPOT NIFTY SHOOTING UP LIKE A MISSILE IN CASE THE  OPENING ON WEDNESDAY IS ABOVE  5735 SPOT NIFTY LEVELS THAT WILL CONFIRM A GOOD 123 UP  TOWARDS 5800 LEVELS DURING THIS WEEK. HOWEVER A FAILURE ON THE PART OF

Stock Market Tutorial

                                 Basics of Stock Market

What is a stock ?
A stock is a partial ownership in a company or an industry, with rights to share in its profits. When an investor buys a stock of a company, he is called a shareholder or a stockholder of that company. The benefit of buying a share is that when the company profits, the shareholders also profit. The company distributes the profit among its shareholders, which is called the ‘dividend‘.
How do you make profits with stocks ?
But many traders make real profit in stocks using the market price of the stocks. Stocks are traded in the stock markets. The face value is the nominal value of the stock that is determined by the issuer of the stock. ‘Market price‘ of a stock is the price at which currently a stock is traded in the market. This price may be at premium or lesser than the ‘face value’ of the stock, depending on the company’s performance and prospects, investors’ interests in the company and a lot of other factors.
Market price of a stock keeps varying as traders trade the stock in the market. Traders often make money using these variations in the market price of the stock. Stocks are bought at lower market prices and sold at higher prices later. This is referred to as ‘long‘ positions in market terms. Similarly stocks can be sold at a higher market price and bought at a lower price later. Thiis is referred to as ‘short‘ positions in market terms. In these cases, the difference in the market prices at the time of buying and selling will be seen as profit by the traders.
What is the Stock Market ?
Basically it is an exchange place or a market that facilitates the trading of stocks. People participating in the stock markets range from some casual traders and investors who trade as a hobby, to large fund traders.
In India the most famous exchanges or markets are the Bombay Stock Exchange(BSE) and the National Stock Exchange (NSE). Globally there are many markets including the famous New York Stock (NYSE), NASDAQ, London Stock Exchange, Hong Kong Stock Exchange etc..
Any market can be thought of with two functionalities:
Primary Market: Here the companies and industries raise long term funds for their operations by issuing shares. Companies come up with an initial price, mostly with premium for the face value of the shares, which will be distributed to the investors. This is called the Initial Public Offer or the IPO.
Secondary Market : After a Company has finished its IPO, it is listed in the markets. After getting listed and issued shares to investors, the shares can then be sold to other investors in the stockmarket. Here the people can buy the shares at a current price as determined by other investors in the market.
What is the Demat Account ?
Like opening a bank account for doing your personal financial transactions, you have to open a Demat account to trade in the stock market. Demat account refers to Dematerialized account. This account helps you to buy and sell stocks without the need for physical paper shares.
A Demat Account is a must for trading the stocks these days. To open a demat account, you should select a Depository Participant (DP). These days most of the banks are also DPs. So you can contact any of the DPs with your identity, address proof and PAN documents for opening a demat account for a prescribed fee by the DP. The registered DPs are also listed in NSDL (http://www.nsdl.co.in/) and CDSL (http://www.cdslindia.com/) websites.
Who is the Stock Broker ?
Stock Brokers are members of the Stock Exchanges. Only these members can conduct transactions in the exchange on behalf of the individuals and companies. So if you want to buy or sell shares in the exchange, you have to contact a stock broker for doing so. This normally requires the individuals to open an account with the Stock Broker. So the individual becomes a client for the stock broker.
Once the client wishes to buy a stock, the broker would place the order in the stock exchange on behalf of the client. When the transaction is done, the broker places the price to the client. The client pays for the stocks he bought and the broker transfers the stocks into the demat account of the client by following the transaction and settlement procedures.
Essentials of Trading - Share Market Tutorial
Basics of Stock Trading
Where can I trade Stocks ?
Stocks are traded in the Stock Market or the Stock Exchange. In India, the two most popular exchanges are the Bombay Stock Exchange (BSE - Located in Mumbai) and the National Stock Exchange (NSE - Located in New Delhi).
Do I have to be physically present in the stock market to trade stocks ?
Not necessarily. You do not have to be physically present in the stock market to start trading. For trading in stocks, you can open an account with a Stock Broker, who is a registered member of the BSE or the NSE. Once you have opened the account, you can start trading in the stocks through your local Stock Broker. The Broker charges a fee called the Brokerage or Commission from you for every trade that you do in the stock market.
What is Online Trading ?
Online Trading is a fairly new and popular mechanism for trading Stocks, wherein the you can buy and sell the stocks over the Internet. With the flexibility that Online trading offers to the clients, this mechanism of trading has become hugely popular among the investors and traders in the recent times.
When you buy or sell stocks online, you will be interacting with an Online Stock Broker, in contrast to the Human Broker in the conventional trading system. The Online system places the orders on your behalf, gets them executed in the exchange and inform the order status to the clients. Like the older system of trading, a fee is charged as Brokerage or Commission for every trade executed using the Online system.
What other services are offered in Online Trading ?
Apart from providing a platform for trading stocks, many Online systems provide integrated packages that link your Trading account with your Bank Account.
This helps you to buy and sell stocks and get the money transferred to your Bank account in a hassle free manner.
Apart from this, many Online Systems also offer Stock Research and Tips from Market Analysts to the clients, over the Trading Platform. This will help you to choose and value your trade calls in the Stock Market.
Basics of Online Trading
How do I Buy / Sell Stocks with my Online Account ?
Buying or Selling stocks is done by placing ‘Orders‘. You can place a ‘Buy Order‘ to buy the stocks at a particular price. Similarly to sell a stock at a particular price, you have to place a ‘Sell Order‘.
Each Online platform has different ways to place these orders. But generally, all of these provide the following basic options when placing an order:
1. Option to choose whether you wish to Buy or Sell a particular stock
2. The name / symbol of the particular stock which you want to either Buy or Sell
3. The Number of stocks (Quantity) that you want to either Buy or Sell
4. The Price at which you would like to either Buy or Sell this stock.
After you have confirmed the order, it is placed in the Stock Exchange through the Online System. Your stocks are actually bought or sold once this order gets executed in the exchange.
What is a Limit Order / Limit Price ?
A Limit Order is a Buy / Sell order which you want to get executed at a pre-determined desired price. This is the most common type of order that investors and traders place in the market.
Buy Order with Limit Price
For example, if you want to buy the stocks of company ‘A’ at a price of Rs.300. However the current price of the stock might be higher than your desired price. But you feel that the price of this stock would come down sooner and reach Rs. 300. In such a case, you can place a Buy order with a limit price of Rs. 300. This means that you are instructing the system to buy the stocks of company A, only if the price reaches Rs. 300 or lesser.
So if a Buy Order gets executed with the Limit Price specified, then you could be assured that the actual price at which the stocks are purchased by you will always be either equal to or lesser than the Limit Price specified by you.
Sell Order with Limit Price
Similarly you may have the stocks of company ‘B’ in your demat account, which you would like to sell at a price of Rs.500. But currently the market price of the stock is lesser than 500 and you expect that sooner the price will reach Rs. 500. In such a case you can place a Sell order with a limit price set to Rs. 500. In this case, the stocks will be sold only if the price reaches Rs.500 or above.
So if a Sell Order gets executed with the Limit Price specified, then you could be assured that the actual price at which the stocks are sold by you will always be either equal to or greater than the Limit Price specified by you.
What is a Market Order ?
Market Orders are placed, when you are not concerned too much about the current price of the stock, but you want to get assured that the stocks are either bought or sold immediately. So a Market Order can be placed only during the Market Trading Hours. You cannot place a Market Order when the Markets are closed.
Market Order for Buying
For example, consider an instance where in you know the fact that company ‘A’ will be making a big announcement in the afternoon today and so the price of the stocks of this company will definitely rise after this event. So you are looking for buying this stock desperately now, irrespective of its current traded price. In such a case, you can place a ‘market order’ for this stock. This will place an order for buying the stocks at the Last Traded Price in the Stock Market. So the chances of buying the stocks increase, as you are trying to buy the stock very close to its Last Traded Price in the market.
Market Order for Selling
Similarly suppose that you know the price of stocks of company ‘B’ will go down later in the day when the company comes out with its Earnings report of Losses for the Quarter. So you would want to sell the stocks of this company immediately, before the price of the stocks fall drastically. In such a case, you can place a Market Order for Selling. This will place an order for selling the stocks at the Last Traded Price in the Stock Market. So the chances of selling the stocks increase, as you are trying to sell the stock very close to its Last Traded Price in the market.

Basics of Technical Analysis

What is Technical Analysis ?
Technical Analysis (TA) is one of the methods used to predict the movement of the price of a stock or an index in the future. The prediction is derived based on a careful analysis of the previous price movements of the stock or index. To put is simply, the future trend is derived based on the past movements of the stock.
Technical Analysis does not yield absolute results always. As is the case with any forecasting system, the TA can give you a hint on what might be expected. But the expectations might prove to be false in extreme market conditions.
So TA will not help you totally overcome the risks involved in the markets, but if used properly, it can help you to predict and take precautionary measures to a large extent.

What are Charts ? Why do we need them ?
Charts are graphical representations of the movement of the stock price or the index value, over a period of time. Along with the price or value, the charts can also be used to depict other related indicators such as the Volume or total traded quantity of stocks. Based on the stock prices or values, statistical indicators are used to obtain values, which can also be plotted on the charts.
Charts offer a very convenient way to visually analyze the movement of the stock price or value. Rising and Falling trends can be easily found out looking at the charts. Repeating Visual Patterns in the charts are also used to forecast the movement. Charts can also be used to spot and trace the effect of key events in the history of the price of the stock.

How are Charts Plotted ?
Financial Charts are generally 2D Charts. There are of course 3D and other higher dimensional charts used in advanced analysis.
The X-axis (Horizontal axis) is generally used to depict the Time Frame. The Y-Axis (Vertical Axis) is used to depict the price or the value that varies with time.

What are Technical Indicators ?
Technical Analysts often rely on some Statistical and Mathematical functions that are applied on the price or value of the stock. These are generally called as ‘Technical Indicators’ . The resultant values, after applying these functions to the price of the stock, are again plotted on the Chart. Analysts can get further hints from analyzing the movement of these indicator values.
There is no consensus or a prescribed set of indicators that have to be used. Each Technical Analyst uses a custom set of these indicators depending upon his / her Trading strategy.
Some of the most commonly used indicators include Relative Strength Index (RSI), Moving Averages (MA), Moving Average Convergence Divergence (MACD) and others.

Moving Averages
Moving Average (MA)
Moving Average is probably one of the most frequently used indicators in technical analysis. This is a statistical indicator which indicates the average movement of the price of the stock for a specified period. This can be calculated for any time series. Generally this will be used to indicate the overall movement of the stock price for the specified time frame range and thus smoothes out the short term variations and fluctuations.
Simple Moving Average (SMA)
The Simple Moving Average (SMA) is one of the simplest indicators to calculate. It gives the average price of stock over a specified period of time. Generally Moving Averages are calculated for the closing prices of the stocks at the end of the day. But you may also calculate for the High, Low, Close and even on the traded Volumes of the stock.
For example, the 9 period SMA gives the average closing price of the stock for the past 9 days. It is calculated as follows:
If P1 represents the price on day 1; P2 represents the price on day 2 and so on, then SMA for period n is calculated as follows:
SMA (for period n) = ( P1 + P2 + P3 + …… + Pn ) / n
So for example, if the close prices of a stock for 4 consecutive days are as follows: 120, 121, 122 and 123.
Then the SMA (for period 4) = (120 + 121 + 122 +123) / 4
So SMA (for period 4) becomes 486/4 = 121.5
Exponential Moving Average (EMA)
Exponential Moving Average (EMA) statistically applies exponentially decreasing weighting factor to the data. Thus EMA results in providing more importance to the recent variations in the data. So EMA reacts sharply to the recent data when compared to the SMA.
EMA for the Close price of a security is calculated as follows:
EMAc = (ClosePrice x Factor) + ( EMAp x (1-Factor) )
where:
EMAc = Current EMA
EMAp = Previous EMA
ClosePrice = Current Closing Price
Factor = 2 / (n+1) , where n is the period for which EMA is calculated

How to make profit with Moving averages
How to trade with Moving Averages ?
Moving Averages are particulary useful in identifying the direction of an uptrend or downtrend of stocks and markets in general. They are based on the previous data and hence are generally referred to as lagging indicators which help us in locating the trend and following on in the trend . Since they do not allow you to predict the trend, you have to use other technical indicators in conjunction with them during trading.
Generally, the most common way to trade with the Moving averages is this - If the price crosses above the moving average, it means that a buying interest has set in - and thus indicates a buy signal. Similarly when the price crosses down the moving average, it means that a selling pressure has set in - thus indicates a sell signal.
Although it helps in indicating the current trend, it does not indicate for how long this trend would continue or when does the reverse trend begin. So traders should be cautious about this when using the moving averages for planning trades. It is also important to consider the volume for the security in question before trading. Sporadic movements with low volumes can generate erratic signals.
Example :
Look at this chart of Reliance capital shown below. The bold yellow line indicates the price and the thin blue line indicates the 9-day Simple Moving Average of the Close price of this stock.
moving-average-example
As you can see from the above chart, when the price has crossed above the SMA, then it indicates that buying interest has set in. From then on, the stock price is on a rise with minor dips. The downtrend is indicated at the point after the price crosses down the MA line. This indicates a down trend and becomes a candidate for sell signal. As can be seen the prices come down in the downtrend.
Longer and shorter Moving Averages
Moving averages can be configured any period of your choice. The most common ones are 9 Day, 30 Days, 50 days and the 200 Day Moving averages. The longer the period, smoothing will be more. Thus in stocks which display a great deal of sharp glitches and breaks, longer moving averages would make sense, as smoothing would be better. Choosing short period moving averages in such cases would result in erratic signals.
Short trends are identified by short period MAs - like the 9 day and 15 day MAs. A medium term trend is given by the 30 - 50 day moving averages. 100 and 200 day moving averages can indicate the intermediate long term trends.
Trading with Moving average Crossovers
Plotting both long term and short term Moving averages for the same security can lead to crossovers. This can also indicate some trading signals in some cases. A buy signal is generally assumed if the short term moving average crosses over the long term moving average. Similarly a sell signal can be indicated when the short moving average falls down the long term moving average.
Example: Look at this chart of the stock ABB in the NSE. The bold yellow line signifies the price movement of the stock. The blue line is the 30 day EMA and the brown line is the 200 day EMA.
moving-average-crossover-example
As can be seen from the chart, when the short term MA i.e the 30 day EMA (blue line) crosses over the long term MA ( 200 day EMA - brown line), then an uptrend is identified and thus a buy signal is generated.
As indicated earlier, MA can help in identifying trends and can give late trading signals. When used with other technical indicators, they can be very helpful in determining trading strategies.

Relative Strength Index (RSI)
RSI Definiton and Calculation
RSI is a popular technical indicator that was developed by Welles Wilder. It is very popular because its very simple to interpret this indicator. It is an oscillator indicating the overbought and oversold conditions of the stock.
RSI is based on the comparison of the magnitude of the gain to the loss. It is the ratio of the EMA of Upward(U) and Downward(D) movements, which is then normalized to values between 0 to 100.
So, if
Pc represents the current Closing price
Pp represents the previous Closing price,
then on a day when the stock has closed up, U = Pc - Pp and D = 0
Similarly on a day when the stock has closed down, D = Pp - Pc and U = 0
Then EMA is calculated for U and D for a period n , represented respectively by EMAup and EMAdn.
Now RSI is calculated as follows:
RSI = 100 x (EMAup / (EMAup + EMAdn) )

How to make profit using RSI
How to trade with RSI ?
Generally a 14 period RSI is plotted for the close prices of the stock. RSI Value of 70 and above is considered to indicate that the stock is in Over Bought condition. Similarly an RSI value of 30 and below is considered to indicate that the stock is in Over Sold condition.
The Over Bought condition indicates that the stock price may be getting over valued and in the next trend may be a candidate for pullback in the downward direction. Similarly the over sold condition indicates that the stock may be getting under valued and in the next trend may be a potential candidate for a pullback rally in the upward direction.
Example : Consider this chart of the Infosys Technologies stock in the NSE:
rsi-example
The yello line at the top indicates the Close price of the stock over a period of time. The bottom line in torquoise blue indicates the 14 day RSI for the Close price of the stock.
As you can see in the chart, when the RSI values have crossed the 70 value, the stock enters the Overbought zone and becomes a candidate for pulldown thus giving a sell signal. Thus a downtrend in the price of the stock is seen after this condition.
Similarly when the RSI values have come below 30, the stock enters the Oversold zone and becomes a candidate for pullback thus giving a buy signal. Thus an uptrend in the price of the stock is seen after this condition.
However large surge and drops in the price of the stock will affect the RSI heavily and can lead to erratic buy and sell signals. So RSI should always be used in conjunction to other technical indicators to confirm the buy and sell signals.




F&O Quote of Nifty

Real Time Chart