Author: Abhishek

Live Portfolio – Initialized Feb/4

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Making use of technical analysis has always been a adrenaline rush for me, and I have been doing it for a long time now. But, from now on I will be sharing the trades and the ideas behind them with all of you. This portfolio will be of select few stocks that are picked up just for the technical reasons, and for the risk management reasons, I will be making both Buy and Sell calls for them.

Stocks that I bought today are CAIRN [stockquote]CAIRN[/stockquote], UCOBANK [stockquote]UCOBANK[/stockquote] and, VOLTAS [stockquote]VOLTAS[/stockquote]. Below are the price charts of all the above with reason of the transaction.

Cairn India Technical Chart

Its quite visible, that the CAIRN’s stock is going to experience the golden cross of 50×200 bullish cross-over, and the combination with declining histogram levels of MACD are suggesting a short-term up move for the scrip. The convergence of RSI with price action is also giving a positive support for the thesis. Also, the stock is trading close to the lower Bollinger-band, suggesting an upcoming Bullish move.

For UCOBANK, the stock was in a flag formation for a while and has been trading close to the lower Bollinger-band. An opportunity is visible around the current levels, with the increasing RSI levels combined with increase in volumes. Although, for the stock it is suggested to have Trailing stop losses in place.

UCOBANK Technical Chart

The last stock is VOLTAS and it has broken out of a downward flag on Wednesday, confirmed by the large number of trades on Thursday and close above the upper line of Flag. The increase in RSI is also suggesting improved buys for the stock.

VOLTAS Technical Chart

Here’s how I have allocated the trades:

 

Abhishek's portfolio

As you can see, its more or less an even split. And our demat account holders know the screen below very well:

StockViz Order Screen

Its tough trading when you have the spotlight focused on you. Fingers crossed!

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Analysis: INFY

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Today’s pick is INFY [stockquote]INFY[/stockquote]. The stock was moving in a range till March since starting of the year. It then fell sharply to Rs. 2,400 levels in April after moving in range till July the stock again fell to Rs. 2,200 levels. Since then the stock has been on an uptrend. In the last three months, the stock has moved +16% vs. +5% of the Nifty’s.

INFY technical analysis chart

Oscillator RSI is hovering in the over-bought territory whereas CMO is in no man’s land. The stock is trading in the middle of Bollinger band not suggesting any directional move. However, short-term technical just saw 9×4 bearish cross-over.

The MACD line has just penetrated the signal line in a bearish manner. However, both long-term and short-term GMMA lines are very distant from each other, giving out an extremely bullish sign for the scrip.

INFY correlation chart

INFY’s average correlation with the Nifty is 0.51 which is positive. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

INFY volatility chart

INFY has a historical volatility in the range of 0.2 to 0.7. The scrip’s volatility is currently in the higher end of the range.

INFY Analyst coverage

Majority of analysts are suggesting a hold for this stock given the current condition of the IT industry.

Given these technicals, we suggest a short-term sell. For the long-term, we suggest a buy given the well spread out GMMA lines. However, we recommend that investors tread with caution given that the spread in the GMMA lines has occurred due to the +20% spike seen at the most recent earnings announcement. Also, for risk management we suggest having trailing stop-losses in case trend-reversal were to take place.

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The StockViz Reference Portfolio – Feb/01

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996B5E5E-DA3B-40BF-9651-EE5C62E00933.201302011838

A flat week for our portfolio, we were down 0.2%.

As the NIFTY was down 0.88% over the week, our momentum portfolio was down only 0.2% outperforming NIFTY by over half a percentage. Continuing the process of following a systematic repeatable process, with appropriate risk management steps came in real handy.

Talk to us about our Quantitative Portfolio Strategy Execution.

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Weekly Recap

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NIFTY.2013-01-28.2013-02-01

The NIFTY ended on a negative tone, drifting down -0.88% for the week.
Biggest losers were BHARTIARTL (-8.63%), TATAMOTORS (-6.43%) and LT (-4.84%).
And the biggest winners were AXISBANK (+8.90%), COALINDIA (+4.59%) and CIPLA (+4.15%).
Decliners eclipsed advancers 32 vs 18fii.2013-01-28.2013-02-01

Gold: -0.64%, Banks: +0.42%. Infrastructure: -3.87%,

Net FII flows for the week: $885.64 mm (Equity) and $225.01 mm (Debt)

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Analysis: BIOCON

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Today’s pick is BIOCON [stockquote]BIOCON[/stockquote]. The stock started the year with a sharp up-trend taking the stock up to Rs. 300. It then started its downward move to fall to Rs. 220 levels by mid-May. Since then the stock has been on an uptrend and saw its 52 weeks high of Rs. 320 level in November. The stock however underwent flag formation which broke down early January, and the stock is currently tracing back the losses. In the last three months, the stock has moved +1% vs. +6% of the Nifty’s.

BIOCON technical analysis chart

Oscillators RSI and CMO are in no man’s land. The stock is trading in the middle of Bollinger band not suggesting any directional move. However, short-term technical just saw 4×9 bullish cross-over.

The MACD line has just penetrated the signal line, giving out a bullish signal for the stock. Long-term and short-term GMMA lines are moving very close to each other and hence are not giving any directional bias for the stock.

BIOCON correlation chart

BIOCON’s average correlation with the Nifty is 0.60 which is positive and strong. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

BIOCON volatility chart

BIOCON has a historical volatility in the range of 0.3 to 0.6. The scrip’s volatility is currently in the lower end of the range.

Given these technicals, we suggest a short-term BUY. For the long-term, we will have to wait for the GMMA lines to spread out to give any direction for future. However, for risk management we suggest having trailing stop-losses in case trend-reversal were to take place.

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