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Stock Market Basic Class For Intraday By Tamil Santhai Part 2/4

rajiv viji 4:06:00 PM

Stock Market Basic Class For Intraday By Tamil Santhai Part 1/4

rajiv viji 4:01:00 PM

General Description About My Channel

Hi Friends This Is Rajiv

I Am Also, One Of The Trader and Investor,

In My Youtube Channel Most Of The Videos Are Relevant To Stock Market. And Also All Stock Market Video

are Explained By My Own Experience .All Videos Are Explained Only by Technical Analysis.

Technical Analysis Is Easiest Way To Study About Stock Market Action. Also We Can Create Any Your Own Strategy.

So That I Prefer technical Analysis Only Suitable Method To Beginners To Stock Market

In My Youtube Channel I Almost Cover following Technical Analysis Areas,

1. Technical Indicator?

2. Types Of Indicator?

3. Basics Of Indicator?

4. Where To Buy And Sell By Indicator?

5. What Are The Technical Difficulty To Follow Indicator?.....

Another One Market Prediction by Theory

We Can Find The Direction Of Market By Theory Based Concept, I Try To Upload Regularly Daily Videos For Next Trading Day Analysis By Theory Concepts.

List Of Top Theory Concept Are,

1. Market By Gann Method

2. Market By Fibonacci Method

3. Market By Pivot Point Method

4. Market By Dow Theory....

Final Technical Analysis Method Is Candle Stick Pattern

Candle Stick Pattern Is One Of Famous Technical Analysis Method . In That Market Are Predict By Following four Ways

1.Bullish Continuation Patterns

2.Bullish Reversal Patterns

3.Bearish Continuation Patterns

4.Bearish Reversal Patterns

If You have Any Doubt About Stock Market ,You Can contact Me At Any time . Finally I Say Real Thing About Stock Market ,

Stock Market Is Not a Profit Making Place , This One Of The Business . It Only Differ From Other Business By Technology Development For Making Buy or Sell,

Account Maintenance And Making Transaction. So You Can't Easily Make profit Similarly To Other Method.

You Can Make Profit by Only Your Own Experience (Experience Is Only Single word but It Contain More Pain And Gain) .

Thanks For Coming To My Channel ...

What is volatility index VIX?

rajiv viji 10:06:00 AM

What is volatility index VIX?

Before learning the volatility index lets understand what is volatility. So volatility is the amount by which the price fluctuates in a period of time. It is measured by some mathematical calculations… I don’t want to go in that detail. Volatility index shows this fluctuation of prices over a given period.

How trading can be done using VIX?

Well, we know that high volatility makes the markets thin / sideways/ range bound or volatile. So while looking for a trade in nifty future or nifty option writing one must check that, if the volatility is low so that trend traders can be on the right side of the trade. Now if a trader is writing nifty options then he must check the volatility before taking the trade, since high volatility will make the price fluctuate and may even see reversals in no time so trading risk gets increased. On the other side if you are a trend trader for nifty future and want to confirm if the current trend will sustain for some time then traders must see lower volatility in VIX chart. If nifty is trending with low volatility then it is most likely to continue moving in the same direction.

I will recommend to trade only when the VIX is moving lower and a level below 20 is ok for trading. But if the VIX goes above 20 it means the chances of reversal in the short term trend is very high and large sudden moves could be expected.

Free Stock Market Software For Intraday Trading By Jstock In Tamil

rajiv viji 3:33:00 AM

Extra News, Fundamental And Technical Analysis, Share Market

Sensex, Nifty as bulls Market

rajiv viji 11:26:00 AM

After a long hiatus, bull operators are back on the street. Key benchmark indices rallied on frenzied buying in index pivotals ahead of the commencement of the first quarter corporate earnings season. The barometer index the BSE Sensex surged past the psychological 19,000 mark. The 50-unit S&P CNX Nifty moved past 5,700 level. The Sensex and the Nifty attained their highest closing level in nearly 10 weeks. Data showing sustained buying by foreign institutional investors (FIIs) over the past few days and firm global stocks underpinned sentiment.
The Sensex jumped 351.33 points or 1.88%, up 311.05 points from the day's low and off 19.48 points from the day's high. The market breadth was strong. All the sectoral indices on BSE rose. The BSE Mid-Cap and Small-Cap indices underperformed the Sensex. The government's decision to raise foreign investment ceiling in private FM radio broadcasting firms to 26% from 20% sent shares of FM radio broadcasting services firms surging.
Index heavyweight Reliance Industries (RIL) advanced over 2% on reports the petroleum ministry on Wednesday recommended the $7.2 billion RIL-BP deal to the Cabinet Committee on Economic Affairs (CCEA) for an 'unconditional approval'. IT bellwether Infosys rose as the company is seen revising upwards its revenue and earnings growth forecast for the year ending March 2012 (FY 2012) in rupee terms at the time of announcing Q1 results on Tuesday, 12 July 2011.
Banking giant HDFC Bank struck lifetime high after the bank set record date for stock-split. Engineering and construction major Larsen & Toubro shot up over 3% after a subsidiary completed a private placement of equity shares. Auto stocks extended recent gains triggered by expectations that sales will pick up in the second half of the year. Most metal rose on fresh buying. Telecom pivotals were also in demand. Cement stocks gained as cement dispatches are likely to pick up post monsoon due to acceleration in construction activities, with current year being the last year of the eleventh five-year plan period. Shares of Rushil Decor and Birla Pacific Medspa surged on their debut.
The market edged higher in early trade. Stocks extended gains in early afternoon trade, with the Sensex and the 50-unit Nifty hitting their highest level since 1 July 2011. The market pared gains in afternoon trade. The market regained strength in mid-afternoon trade. Frenzied buying in index pivotals propelled the key benchmark indices to their highest level in more than 9 weeks in late trade.
Foreign institutional investors (FIIs) bought shares worth net Rs 281 crore on Wednesday, 6 July 2011, compared with an inflow of Rs 860.60 crore on Tuesday, 5 July 2011. FII inflow in July 2011 totaled Rs 5003.90 crore (till 6 July 2011). FIIs had bought shares worth a net Rs 4572.20 crore in June 2011. FII inflow in calendar 2011 totaled Rs 7674.30 crore (till 6 July 2011).
The BSE Sensex jumped 351.33 points or 1.88% to settle at 19,078.30, its highest closing level since 29 April 2011. The Sensex jumped 370.81 points at the day's high of 19,097.78 in late trade. The index rose 40.28 points at the day's low of 18,767.25 in early trade.
The S&P CNX Nifty was up 103.50 points or 1.84% to settle at 5,728.95, its highest closing level since 29 April 2011. The Nifty hit a high of 5,737.15 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1922 shares rose and 987 shares declined. A total of 125 shares remained unchanged.
The BSE Mid-Cap index rose 1.12% and the BSE Small-Cap index rose 1.08%. Both these indices underperformed the Sensex
The total turnover on BSE amounted to Rs 2884 crore, lower than Wednesday's turnover of Rs 3493.58 crore
All the 13-sectoral indices on BSE logged smart gains. The FMCG (up 2.60%), the BSE Realty (up 2.25%), and the BSE Capital Goods (up 2.20%), outperformed the Sensex. The BSE Consumer Durables (up 1.08%), the Bankex (up 1.16%), and the BSE PSU (up 1.28%), underperformed the Sensex.
Index heavyweight Reliance Industries (RIL) advanced 2.19% to Rs 871.35 on reports the petroleum ministry on Wednesday recommended the $7.2 billion RIL-BP deal to the Cabinet Committee on Economic Affairs (CCEA) for an 'unconditional approval'. The deal gives the British energy major a 30% stake in 23 oil and gas fields, including gas-producing KG-D6. Reports added that the Cabinet will take up the issue for a decision next week.
Metal stocks were in demand on fresh buying. India's largest private sector aluminium maker by sales Hindalco Industries jumped 3.79% to Rs 196 and was the top gainer from the Sensex pack.
India's largest sponge iron maker by sales Jindal Steel & Power surged 2.56% on reports the company has acquired an additional 5% in Rocklands Richfields via open offer to boosting its stake in the Australian coal miner to 19.39%.
India's largest private sector steel maker by sales Tata Steel rose 1.51% after the company's sales from its Indian operations rose 14% to 1.59 million tonnes in Q1 June 2011 over Q1 June 2010. The Indian operations account for about a quarter of the group's total annual global capacity of about 28 million tonnes, which includes unit Corus, Europe's second-largest steel maker. Sales of long steel products, used mostly in construction industry, rose 16% during the quarter, while sales of flat products, used in cars and consumer goods, rose 12%. The company's crude steel production in India stood at 1.79 million tonnes for the quarter, up 10%.
National Aluminium Company (up 1.54%), Sesa Goa (up 1.15%), Hindustan Zinc (up 0.88%), JSW Steel (up 2.43%) and Steel Authority of India (up 0.57%), edged higher from the metal sector.
Sterlite Industries (India) declined 0.73% to Rs 170.10 after its ADR lost 1.76% on Wednesday.
India's largest engineering and construction firm by net profit Larsen & Toubro shot up 3.06% after the company during market hours today, 7 July 2011, said its subsidiary L&T Finance Holdings has raised Rs 330 crore by selling six crore equity shares at Rs 55 each to the private equity fund of US-based Capital International.
L&T Finance Holdings is a financial holding company offering a diverse range of financial products and services through its subsidiaries. Its operations are arranged into four business segments viz. the infrastructure financegroup, retail finance group, corporate finance group and investment management group. L&T Finance Holdings had filed a Draft Red Herring Prospectus (DRHP) in relation to a proposed initial public offer (IPO).
Indo Asian Fusegear advanced 1.82% after the company said its board will meet on 9 July 2011, to consider buyback of shares. The company announced the board meet after market hours on Wednesday, 6 July 2011.
India's second largest private sector bank by net profit HDFC Bank gained 0.71% to Rs 2563, after striking a record high of Rs 2572, after the bank fixed 16 July 2011 as the record date for 5-for-1 stock split. The bank announced the record date before trading hours today, 7 July 2011. The stock has risen sharply over the past few days as the private sector bank is seen reporting a more than 30% growth in net profit in Q1 June 2011.
India's largest private sector bank by market capitalisation ICICI Bank rose 1.36% to Rs 1089.95, staging a reversal from an early low of Rs 1063.
India's largest commercial bank by branch network State Bank of India (SBI) rose 1.39%. After market hours today, 7 July 2011, the bank informed that it has revised the base rate upwards by 25 basis points from 9.25% per annum to 9.50% per annum effective from 11 July 2011. The bank has revised upwards deposit rates on some maturities by up to 100 basis points.
SKS Microfinance hit an upper circuit limit of 20% at Rs 411 after the government released the draft of a bill aimed at developing and regulating microfinance institutions.
IT bellwether Infosys rose 1.57% ahead of its Q1 June 2011 earnings on Tuesday, 12 July 2011. Analysts expect Infosys to revise upwards its revenue and earnings growth forecast for the year ending March 2012 (FY 2012) in rupee terms, with the company seen beating its own guidance for Q1 June 2011 and due to higher pricing.
Salary hike and increase in tax rates due to the expiry of Software Technology Parks of India (STPI) tax benefits is seen pulling Infosys' net profit lower in Q1 June 2011 even as a good revenue growth is expected from the IT bellwether on the back of volume growth and uptick in pricing. A total of 7 brokerages expect a between 1.1% to 7.1% fall in Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) at between Rs 1689 crore to Rs 1797.20 crore in Q1 June 2011 over Q4 March 2011. Revenue is seen rising 2.6% to 4.15% at between Rs 7435 crore to Rs 7551.40 crore in Q1 June 2011 over Q4 March 2011.
India's largest software services exporter TCS gained 1.11%. The company unveils its Q1 June 2011 results on 14 July 2011.
India's third largest software services exporter Wipro rose 1.58%. The firm declares its Q1 June 2011 results on 20 July 2011.
Polaris Software Lab fell 1.31% after the stock turned ex-dividend today, 7 July 2011, for a dividend of Rs 4.50 per share for the year ended March 2011.
Telecom pivotals were in demand. India's largest listed cellular services provider by sales Bharti Airtel spurted 3.76% after the company said it has decided to restructure its businesses in a bid to improve efficiency in its India and South Asian operations. Bharti Airtel said it will merge its mobile, satellite television, fixed-line and broadband businesses into a single entity.
"The new structure... is aimed at driving greater business and functional synergies, providing a common interface to customers, and creating a de-layered and more agile organization," Bharti Airtel Chairman and Managing Director Sunil Mittal said in a statement. The business units jointly make up 90% of the company's revenue.
India's second largest listed cellular services provider by sales Reliance Communications rose 1.54% on bargain hunting, halting a two-day 3.33% slide.
ITC (up 3.38%), NTPC (up 2.87%), and Reliance Infrastructure (up 2.49%), edged higher from the Sensex pack.
Cement stocks gained as cement dispatches are likely to pick up post monsoon due to acceleration in construction activities, with current year being the last year of the eleventh five-year plan period. ACC (up 3.19%), Ambuja Cement (up 2.29%), UltraTech Cement (up 3.45%), JK Lakshmi Cement (up 1.95%), Shree Cement (up 1.39%), India Cements (up 2.74%), and Madras Cement (up 0.30%), gained.
The government's decision to raise foreign investment ceiling in private FM radio broadcasting firms to 26% from 20% sent shares of FM radio broadcasting services firms surging. Reliance Media World and Entertainment Network India rose 7% and 6.22%, respectively.
Graphite India fell 2.28% after the stock turned ex-dividend today, 7 July 2011, for a dividend of Rs 3.50 per share for the year ended March 2011.
Nilkamal surged 4.96% on reports the company plans to set up a mattress manufacturing facility at Hosur in Tamil Nadu. The mattresses range will be first marketed in the west and south markets followed by the north and east towards the second half of the year, reports added.
Lupin rose 2% after its US subsidiary Pharmaceuticals Inc received tentative approval from the US drug regulator to market Pregabalin capsules in multiple strengths. The company made this announcement during trading hours today, 7 July 2011.
Shares of Rushil Decor settled at Rs 119.65 on BSE, a premium of 66.18% over the initial public offer price of Rs 72. The stock debuted at Rs 81.25, a premium of 12.84% over the initial public offer (IPO) price. The stock hit a high of Rs 124.05 and low of Rs 75. Rushil Decor makes decorative laminated sheets and plain particle board.
Shares of Birla Pacific Medspa settled at Rs 25.35 on BSE, a premium of 153.50% over the initial public offer price of Rs 10. The stock debuted at Rs 10.10, a premium of 1% over the initial public offer (IPO) price. The stock hit a high of Rs 30.70 and low of Rs 10.10. The company is in the business of beauty and health-care treatment.
Rushil Decor clocked highest turnover of Rs 349.15 crore on BSE. Birla Pacific Medspa (Rs 244.14 crore), Delta Corp (Rs 103.96 crore), SKS Microfinance (Rs 75.37 crore) and State Bank of India (Rs 75.28 crore) were the other turnover toppers in that order.
Birla Pacific Medspa clocked highest volume of 13.48 crore shares on BSE. Rushil Decor (3.71 crore shares), Cals Refineries (2.84 crore shares), Birla Cotsyn (1.23 crore shares) and Sanraa Media (1.07 crore shares) were the other volume toppers in that order.
The market soon enters the crucial period of corporate earnings. Investors will closely watch the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when firms are witnessing cost pressures amid rising interest rates and staff costs. A hike in transportation costs will add to cost pressure of India Inc. As per reports, freight rates have gone up by 8% to 9% on all routes across India following the recent hike in diesel prices.
Corporate earnings will begin with housing finance major HDFC unveiling its Q1 June 2011 results on Friday, 8 July 2011. IT bellwether Infosys unveils Q1 results on 12 July 2011. IT giant TCS unveils Q1 results on 14 July 2011. Ashok Leyland reports Q1 results on 19 July 2011. Wipro, Dr Reddy's Lab and Exide Industries are set to announce Q1 results on 20 July 2011.
Zee Entertainment Enterprises and Biocon unveil Q1 results on 21 July 2011. Private sector bank Axis Bank reports Q1 results on 22 July 2011. Car major Maruti Suzuki and steel major JSW Steel are set to unveil Q1 results on 26 July 2011. Infrastructure Development Finance Company (IDFC) unveils Q1 results on 27 July 2011. Power Finance Corporation announces Q1 results on 29 July 2011.
Monsoon rains were 25% below normal in the week to 6 July 2011, slowing from the 10% above average rains in the previous week, the weather office said on Thursday. Rainfall in the month of July is considered crucial as sowing of a number of crops starts in June and good July rains determine the soil moisture and ensure proper development of the crops planted in June.
An Empowered Group of Ministers (EGoM) is reportedly scheduled to meet on 11 July 2011 to consider the crucial Food Security Bill and allow export of food grains.
European stocks rose on Thursday following a late rally on Wall Street and as investors awaited a likely interest-rate hike from the European Central Bank. The key benchmark indices in UK, France and Germany were up by between 0.37% to 0.44%.
The European Central Bank is widely expected to hike interest rates by 25 basis points at a policy meeting later in the global day today, 7 July 2011.
Asian indices edged higher on Thursday following overnight gains on Wall Street. Key benchmark indices in Hong Kong, Indonesia, Singapore and South Korea were up by between 0.06% to 0.78%. The key benchmark indices in Taiwan and Japan were down 0.58% and 0.11%, respectively.
China's Shanghai Composite reversed early gains and declined 0.58% after the country's central bank, post market closing on Wednesday, hiked interest rates by 25 basis points for third time this year to battle surging inflation. The increase will take effect from today, 7 July 2011.
Trading in US index futures indicated that the Dow could gain 31 points at the opening bell on Thursday, 7 July 2011. The key data due this week is US non-farm payrolls for June 2011 on Friday, 8 July 2011. The market expectation is that hiring doubled last month from May's lackluster initial reading of 54,000 non-farm jobs.

Fundamental And Technical Analysis, Indicators, Share Market

Technical About Indicator

rajiv viji 11:23:00 AM

(Reference ChartNexus : All Details Collected From Chart Nexus XpertTrader)

Accumulation/Distribution:

Acc/Dis is a momentum indicator measuring the accumulation and distribution in a counter where the accumulation refers to the sustained buying pressure and distribution refers to the sustained selling pressure. It is a volume-based indicator that is used to confirm the strength of the price movement. Acc/Dis may also be used to seek for possible reversal points through the divergence between the Acc/Dis line and the price movement

Average Directional Index

Average Directional Index (ADX) is a popular trend indicator used to measure the strength of a trend. A high reading which is usually taken to be above 25 indicates a strong trend. Readings below 20 indicate a lack of trend. In addition to the ADX line, there are two other lines that are overlaid on the chart which are the +DI and -DI, respectively the Plus Directional and the Minus Directional. Those two lines help to give signals with +DI line crossing up -DI line giving a bullish signal whereas +DI line crossing down -DI line gives a bearish signal

Bollinger Band:

Bollinger Bands refers to the 3 lines namely the MA, the Upper Band and the Lower Band. The main purpose of those 3 lines is to indicate whether an oversold or an overbought condition has happened. An overbought condition occurs when the price goes beyond the Upper Band while an oversold condition occurs when the price goes below the Lower Band. Another use of Bollinger Bands is to identify situations where the band formed by the Upper and Lower Bands gets smaller and smaller. This is called a Bollinger Squeeze and any price breakout of the Bollinger Squeeze may indicate a possible opportunity to catch the ensuing trend. If the price is breaking up the Upper Band of the Bolliger Squeeze, it indicates a bullish rally may happen. Conversely if the price is breaking down the Lower Band, it indicates a bearish rally may happen

Chaikin Money Flow:

Chaikin Money Flow (CMF) gives a measure of the amount of money flow volume over a specified period of time by measuring the close of the price with respect to its high and low together with the volume behavior. Hence if the price has been consistently closing near its highs on high-volume days, we expect CMF to have high values or swinging higher

CMF oscillates between -1 and +1 with the centerline at the zero level. Hence when CMF moves into the positive region, it indicates buying pressure and conversely if the CMF moves into the negative region, it indicates selling pressure

Commodity Channel Index:

Commodity Channel Index (CCI) is a very useful indicator that tells us how far the price is away from the average price in a certain period. If the CCI value is high, this signifies that the price is far above the average price while a low CCI value signifies that the price is below the average price. Hence, this indicator is valuable in determining if a counter is oversold or overbought. In addition, CCI may detect weaknesses in the trend through divergences with the Price action

Force Index:

Force index is an indicator developed by Alexander Elder that aims to take into account the direction, extent and volume to determine the shifting power plays between the bulls and the bears. It is calculated by having the current close subtracted by the previous close and then multiplying this number by the volume

GMMA:

GMMA is an indicator that aims to reflect the sentiments of the short-term traders and long-term investors. This is achieved by using 6 short-period Moving Averages and 6 long-period Moving Averages. When the lines in the 2 sets of Moving Averages are parallel and moving in the same direction, it indicates that both the short-term traders and the long-term investors are sharing the same outlook on the counter. On the other hand, if the lines are crossing up and not moving in parallel motion this indicates diverging views between the short-term traders and the long-term investors

MACD

MACD created by Gerald Appel in the late 1970s, is a useful and commonly used indicator for both its trend and momentum properties. MACD indicator consists of a MACD line, a Signal line and a Histogram. The MACD line is constructed by taking the difference between two exponential Moving Averages while the Signal line is the Moving Average of the MACD line. Hence the Signal line is a slower line compared to the MACD line. The Histogram measures the difference between the MACD line and the Signal line. Generally, a MACD line reading above zero signifies that the counter is trending up while a reading below zero signifies that the counter is trending down. If the MACD line is flat or moving horizontally, it shows that the counter is moving sideways. Another interpretation of the MACD indicator is from the crossover between the MACD line and the Signal line. As the MACD line is faster compared to the Signal line, the MACD line crossing up the Signal gives a bullish signal while the reverse gives a bearish signal. Finally, the Histogram which is tracking the momentum of the counter gives us signals through the change of the Histogram bar heights.

Money Flow Index:

Money Flow index or the commonly used abbreviation MFI, is a momentum indicator that is based on both price and volume. Hence MFI gives an indication of whether money is flowing in or out of the counter. An upward sloping MFI generally signifies positive money flow while a downward sloping MFI generally signifies negative money flow. An Overbought and Oversold are commonly drawn on the MFI chart which ranges from 0% to 100% to identify the Overbought and Oversold region respectively.

Money Flow Index:

Momentum:

Momentum indicator gives an indication of the rate of price change by plotting the difference between the current closing price and the closing price T periods ago. If the Momentum indicator is moving up sharply, this signifies that the price is moving up at a fast rate. Conversely, if the Momentum indicator is moving down sharply, this signifies that the price is moving down at a fast rate.

Moving Average:

Moving Average is the most common used indicator in Technical Analysis and it is used to indicate the trend of the price movement. As the name indicates, a Moving Average is taking the average of the price in a moving time window. For a simple Moving Average, the weightage of each price point in the moving window is taken equally. However, for some traders who want to give higher weightage to the more recent price points in the window, an exponential Moving Average is used. The number of data points in the window is referred to as Period. Traders typically put a few Moving Averages on the chart with values such as 20, 50, 100 and 200 so as to track both the long-term trend and short-term trend

Price Channels:

Price Channels is an indicator that comprises of two channel lines with the lower channel equalling the given period’s lowest price and with the upper channel equalling the given period’s highest price

Relative Strength Index:

Relative Strength index or the commonly used abbreviation RSI, is a very popular indicator that measures the speed and change of price movements. This is done by measuring the gains in periods that the prices have closed up versus the losses in periods that the prices have closed down. RSI oscillates between 0 to 100 with overbought and oversold levels typically placed at 70 and 30 respectively. Counters with RSI in the overbought region indicate that the buying might be overextended and a retracement may be imminent. Conversely, RSI in oversold region indicate that the selling may be overextended and a rebound may be imminent. However do take note, in a strong trending period, the RSI might stay in the overbought or oversold region for a long time

Williams %R:

Williams %R is a momentum indicator developed by Larry Williams. It measures overbought and oversold levels by comparing a counter’s close with respect to its high-low range over a certain period of time. It is used to determine market entry and exit points. The Williams %R produces values from 0 to -100; a reading below -80 usually signifies that the counter is oversold, while a reading over -20 usually signifies that the counter is overbought

Fundamental And Technical Analysis, Indicators, Share Market

Reversal Indicators

rajiv viji 9:50:00 AM

Market Reversal Indicators

Many fail to act at market tops. When your indications give you a signal that a market top is at hand, sell a portion of your long shares out immediately. Here are a few signs that indicate a change in stock market direction.

The Law of Effort vs. Result – This key principle is very important for you to take note of when you observe it. When markets are initially breaking out, there will be heavier volume than the preceding days; however, when you start to noticed that volume is staying consistently high or even expanding BUT there is no substantial price acceleration, be alert. This is a tell tale sign of distribution and indicates that the stock markets direction may be about to reverse. What is this telling you? The public is very bullish and that there is a lot of buying going on but there is also a large force that is keeping the market capped out while they are selling to the public. The market will usually come under distribution during an advance rather than a decline. The larger institutions and hedge funds cannot sell when everyone else is; the large number of shares that they must sell will create an unfavorable situation for selling heavy sizes. They need to mask their selling in the face of strength so they can go un-noticed and dump their shares. If you get caught holding the bag on the initial sell-off, stay tuned for a bounce which will allow you to sell your shares out.

Volume – There is a misnomer that markets need to visibly show heavy volume on the downside in order to be considered a legitimate decline. This is not true. In reality, the first decline off the top will be on lower volume as it is not yet accepted by the public. Most times, you will actually see volume accelerate when the public begins to start accepting the fact that the stock market direction has actually turned lower. The mob mentality will have many sellers panicking at the same time resulting in heavy volume on a flush lower. The price, however, may be considerably off the highs before this happens.

Divergences between Market Indices – Keep a close eye on this. I tend to look at the NYSE to determine the bigger picture. The problem at times with the DOW is that it only has 30 stocks in it and that may show a different picture than the entire market as a whole. Therefore, keep an eye on the divergences between the different market averages to understand if a rally or a decline in one sector or index is contradictory to general market as a whole. For example, if the DJIA is up 1.5% and the NYSE is only up about .5%, we can clearly see that there is a markup in only a small part of the market. This can indicate that a change in stock market direction is near.

Interest Rates – This is a key indicator to watch as well. It simple, when the federal funds rate and discount rates are moved higher in succession by the Federal Reserve, a negative posture is taken by the markets. Alternatively, the first rate cut that comes after these increases can be seen to end the bear and bring in the bulls. Also, keep a close eye on M1, M2 money supply changes and the % changes in the Consumer Price Index (CPI)

Darlings to Dogs – It is typical to see a rotation into the laggards or dogs of the market near market tops. When you see many dogs moving higher, take note and heed the signal that you are receiving, which is that the market is getting ready for an important move DOWN.

January Effect - As discussed in our article on the January effect in the stock markets, a negative close for the month of January is a very bearish indication and leads to sizeable market debacles in the following months.

Advance/Decline Line – The A/D line measures the cumulative number of stocks advancing versus declining on the NYSE. This indicator is not very precise; remember that market tops take quite a bit longer to form than market bottoms. Greed is a different animal than fear as fear hits everyone at the same time. The A/D line can start to show divergences far before the market tops out but it is making a clear statement in that the market is rallying on fewer stocks going higher. While it will not indicate the exact top, it will show you in advance that the market is beginning to sputter and to be on guard for a top formation being set up.

AAII Sentiment – AAII measures the sentiment of the non-professional rated investment community. It represents a ratio of bulls and bears out of the entire population of those polled. This indicator becomes of significance when the value of the AAII bull ratio get below 30% bulls. While the occurrences are rare, it is not something to ignore. When the bull ratio is below 30%, it is an indication that the public is very bearish. This indicator is to be used as a contra-indicator to the current direction of the stock market. Very bearish readings actually are very bullish for the market. As we mentioned above, fear is much easier to gauge than greed and using this principle as a guide, I would say that this indicator is best utilized to indentify bottoms rather than tops.

Up/Down Volume on the NYSE – I look for days of strong advancing volume to declining volume after a decline to suggest a more meaningful bottom may have been put in. Using a trailing 30 days as a guide, if we see three 90% up volume days without a 90% down day on the NYSE, it is an indication of a more powerful advance in the coming months. While there may be short term conditions that warrant a pullback, the prospectus for the next 12 months is very bullish.

New Highs & New Lows – Another great tool that measures the percentage of stocks in an index are setting new 52 week highs and lows. It is an oscillator that ranges from 0 to 100. This indicator is more useful in locating market bottoms. A reading below 10% indicates that we should be on watch for a possible major shift in the stock markets direction to the upside.

VIX Volatility Index – The VIX is derived using the implied volatility in the S&P 500 index calls and puts. It is an expectation of the markets volatility over the next 30 days. The higher the volatility, the more fear there is in the markets. Again, this is a contrarian indicator and when this index reaches above 30, use your other technical indications and start looking for a change in the stock markets direction to the upside. During this extended recession in the markets, the volatility has gone to record levels and has remained that way for 6 months as the markets continue to crash lower. Historically 30 is a significant level; however, during a crisis, this number can head much higher.

Cycles – While nothing is perfect, the 4-year cycle in the stock markets is uncanny with its reliability to provide substantial lows in the stock market. It is pretty simple; you should look for a low in the stock market every four years. Let’s look back in history, 2006, 2002, 1998, 1994, 1990, 1986, 1982 all provided amazing buying opportunities in the stock market. I said its not perfect, and the 1987 crash was one of those occasions. As a result of this steep drop the markets instituted curbs in which shuts down the exchanges during extreme sell offs. If one had bought the market in 1986, they would have been able to make substantial gains before the 1987 crash occurred. History suggests that we should look for this bottom in the August to October timeframe.

Fundamental And Technical Analysis, Indicators, Share Market

Over View Of Indicators

rajiv viji 9:46:00 AM

MARKET INDICATORS

Market Indicators

All of the technical analysis tools discussed up to this point were calculated using a security's price (e.g., high, low, close, volume, etc). There is another group of technical analysis tools designed to help you gauge changes in all securities within a specific market. These indicators are usually referred to as "market indicators," because they gauge an entire market, not just an individual security. Market indicators typically analyze the stock market, although they can be used for other markets (e.g., futures).

While the data fields available for an individual security are limited to its open, high, low, close, volume (see page ), and sparse financial reports, there are numerous data items available for the overall stock market. For example, the number of stocks that made new highs for the day, the number of stocks that increased in price, the volume associated with the stocks that increased in price, etc. Market indicators cannot be calculated for an individual security because the required data is not available.

Market indicators add significant depth to technical analysis, because they contain much more information than price and volume. A typical approach is to use market indicators to determine where the overall market is headed and then use price/volume indicators to determine when to buy or sell an individual security. The analogy being "all boats rise in a rising tide," it is therefore much less risky to own stocks when the stock market is rising.

Categories of market indicators:

Market indicators typically fall into three categories: monetary, sentiment, and momentum.

Monetary indicators concentrate on economic data such as interest rates. They help you determine the economic environment in which businesses operate. These external forces directly affect a business' profitability and share price.

Examples of monetary indicators are interest rates, the money supply, consumer and corporate debt, and inflation. Due to the vast quantity of monetary indicators, I only discuss a few of the basic monetary indicators in this book.

Sentiment indicators focus on investor expectations--often before those expectations are discernible in prices. With an individual security, the price is often the only measure of investor sentiment available. However, for a large market such as the New York Stock Exchange, many more sentiment indicators are available. These include the number of odd lot sales (i.e., what are the smallest investors doing?), the put/call ratio (i.e., how many people are buying puts versus calls?), the premium on stock index futures, the ratio of bullish versus bearish investment advisors, etc.

"Contrarian" investors use sentiment indicators to determine what the majority of investors expect prices to do; they then do the opposite. The rational being, if everybody agrees that prices will rise, then there probably aren't enough investors left to push prices much higher. This concept is well proven--almost everyone is bullish at market tops (when they should be selling) and bearish at market bottoms (when they should be buying).

The third category of market indicators, momentum, show what prices are actually doing, but do so by looking deeper than price. Examples of momentum indicators include all of the price/volume indicators applied to the various market indices (e.g., the MACD of the Dow Industrials), the number of stocks that made new highs versus the number of stocks making new lows, the relationship between the number of stocks that advanced in price versus the number that declined, the comparison of the volume associated with increased price with the volume associated with decreased price, etc.

shows the Prime Rate along with a 50-week moving average. "Buy" arrows were drawn when the Prime Rate crossed below its moving average (interest rates were falling) and "sell" arrows were drawn when the Prime Rate crossed above its moving average (interest rates were rising). This chart illustrates the intense relationship between stock prices and interest rates.

shows a 10-day moving average of the Put/Call Ratio (a sentiment indicator). I labeled the chart with "buy" arrows each time the moving average rose above 85.0. This is the level where investors were extremely bearish and expected prices to decline. You can see that each time investors became extremely bearish, prices actually rose.

shows a 50-week moving average (a momentum indicator) of the S&P 500. "Buy" arrows were drawn when the S&P rose above its 50-week moving average; "sell" arrows were drawn when the S&P fell below its moving average. You can see how this momentum indicator caught every major market move.

merges the preceding monetary and momentum charts. The chart is labeled "Bullish" when the Prime Rate was below its 50-week moving average (meaning that interest rates were falling) and when the S&P was above its 50-week moving average.

The chart in Figure 38 is a good example of the roulette metaphor. You don't need to know exactly where prices will be in the future--you simply need to improve your odds. At any given time during the period shown in this chart, I couldn't have told you where the market would be six months later. However, by knowing that the odds favor a rise in stock prices when interest rates are falling and when the S&P is above its 50-week moving average, and by limiting long positions (i.e., buying) to periods when both of these indicators are bullish, you could dramatically reduce your risks and increase your chances of making a profit.

Fundamental And Technical Analysis, Indicators, Share Market

TECHNICAL INDICATORS - Put-Call Ratio

rajiv viji 9:41:00 AM

**Put-Call Ratio**

A put option is an agreement between two parties to exchange an asset at a pre-determined rate on or before a specific date. The buyer of the put option has the right but no obligation to sell the asset (stock, commodity) at a specified price on or before a fixed date, while the seller has the obligation to buy at the pre-specified price if the buyer wishes to exercise the option.

A call option, on the other hand, gives the buyer of the option the right but no obligation to buy a particular asset from the seller of the call option at a fixed price on or before a particular date.

The put-call ratio is calculated by dividing the number of traded put options by the number of traded call options.

If the put-call ratio is increasing, it means the number of traded put options is increasing, signaling that either investors fear the market will fall or are hedging their portfolios foreseeing a decline.

Sahaj Agrawal, associate vice-president, derivatives, Kotak Securities, says, "A high ratio indicates an over-cautious stance by market participants and hence chances of the market falling are low. Contrary to that, a low ratio indicates over-optimism, and hence caution should be exercised."

Though these indicators are frequently used by traders and fund managers to predict market movements, they may lead to wrong results if used separately, as they are not fool-proof. You can use these together to arrive at a more credible conclusion.

Fundamental And Technical Analysis, Indicators, Share Market

TECHNICAL INDICATORS - Trading volume

rajiv viji 9:39:00 AM

TECHNICAL INDICATORS

**Trading volume**

Trading volume indicates the number of shares or contracts traded in the market. It tells if a particular price trend is supported by market players.

If the price of a share is increasing with higher than normal volume, it indicates investors support the rally and that the stock would continue to move upwards. However, a falling price trend with big volume signals a likely downward trend.

A high trading volume can also indicate a reversal of trend. For example, a drop in the share price with very high trading volume is viewed as a sign that the stock has hit the bottom.

Market Reversal Indicators

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