Author Archives: Kush Ghodasara

Hedge against Dollar

Our Rupee has been weakening continuously against Dollar since June 2014, while it was trading around 60/USD. But still it has been trading in the strict upside channel, and importer and exporter could take support of the same and hedge their payments accordingly. Fundamentally, this has been the period where FII has sold heavily in Emerging markets including India, and all the currencies around the world had weakened against dollar, so we did too but we out performed though. Now after the investor friendly budget for starts up and many other sector, and valuation at cheapest in last 2 years, i feel FII would start pouring in some money. As India is the only emerging market, with growth of more than 7% at in such fragile times, am sure that FII would prefer India over other emerging markets. So may be Equity markets could remain volatile but as USD/INR charts suggest that Currency has resisted near to the channel line which is intact since 2 years, so one can surely take a risk to hedge. Even the time frame of the chart is Weekly, and if we closed below 68.30 on Friday, we can get “Evening star pattern” which is bullish reversal..But as indicators and channel suggest a sell, one shouldnt wait to hedge.

Strategy: Sell USD/INR March (CMP:68.64) Tgt: 66.80 SL: 69.30

Would it be just one kiss story or will go further?

Technically today was a good day on Nifty daily charts but the weekly closing hasnt been that significant for either side move. So we have to stick to daily chart analysis to get some clear trend. As we saw yesterday, that low was exactly kissed at the strong support of 6960 which was previous weeks low and also the Fibonacci support so it holds alot significance. Today it was trading way above that support but closing has brought me some fear for bulls back. Now the question remains that was yesterdays low to support just one kiss or we can see it again? Though its just a fear which can be controlled. Monday’s opening would decide whether Nifty charts have overcame fear or not? Whats the fear? ….Doji candle on closing today! It has peculiar characteristics of being a a part of reversal pattern and also a continuation candle signalling just a pause to current trend.  Only Mondays opening could tell us what exactly todays Doji signifies!! What should we keep in mind? 1. If we have even a marginal negative opening and if we dont breach todays high, then Doji would take a bearish view. 2. If at any point of time we breach todays high,  Doji could be considered just a pause to upside and rally should resume. Though these are the basic possibilities, but a significant one.  Though its a Budget day so we should keep positions hedged either ways

Simple tool for great trading idea on Bata India

We try to implement many technical studies and indicators to get some great multiplexer for long term, but a simple trend line could give you the same too. Today i want to show you graph of Bata India and interestingly you guys could notice that stock has been taking strong support on the white line drawn connecting lows on the chart. You would be glad to know that the graph is Monthly chart and Bata is taking support of this line since 2008. Stock has almost taken support and bounced back for 3 times prior and for almost more than 10 months to count candles.  So now today stock is trading at the same upward sloping line and it has been taking support since November.  To add other simple tool to trend line, we are getting higher highs and Highers lows, since last 3 months on same time frame. So going out with a common Stop loss idea, we should keep a SL of 3% below the line at 448 and which means sl comes at 434. So a long term investor who believes “Bhav Bhagwan che” can take a long call for 3 years  at CMP 468



Patanjali, a potential competition for FMCG Co.’s?

In a short span of less than a decade, Patanjali recorded a turnover of Rs. 2,500 Crores in FY15, higher than what existing FMCG companies had achieved over a decadeAccording to the industry data, it has a market share of 4%-5% (FY15) despite having fairly limited distribution. Patanjali has also gained considerable traction in the toothpaste category.

Patanjali Ayurved Limited was established in 2006 by Baba Ramdev along with an Ayurveda practitioner, Acharya Balkrishna. Although Ramdev baba does not own any stake in the company, he has played an important role in gaining brand’s visibility.

The company manufactures around 800 products and has expanded to a full range of consumer categories, from edible oils, biscuits, and noodles to toothpaste, hair and skin care products. It sells its products through clinics, wellness centers and outlets. The company partnered with Future group to sell its products through Future Group’s stores and has plans for joint manufacturing in future.

The exponential growth of Patanjali is attributable to increasing appeal of ayurvedic and ‘natural’ products, price discounts (10% – 30%), better quality, and a growing desire to consume Indian brands. It also has an advantage of being associated with Yoga guru, Baba Ramdev. The company stepped up its advertising and promotional spends and roped in Hema Malini as its Brand Ambassador. According to BARC, Patanjali’s advertisements were one of the top three brands advertised on television (Nov’15).

Hence, Patanjali is definitely an exciting development in the FMCG Industry. Patanjali has been a disruptor in the FMCG market. It poses challenge to FMCG companies like Dabur and Marico that focuses on natural products. Going forward, Patanjali might eat market share of the FMCG majors present in oral care, hair care and OTC (over the counter) products. The future may see price wars or new product launches to cope with the stiff competition. Bring it on! As we know the major FMCG players are not going to be quiet!

Getting closer to breakout

Nifty chart has been pretty confusing these days and today we have added one more day to confusion. As we all can notice in the chart we have got another “Doji” type candle which is indecisive in nature. If we analyse Nifty from different angle’s then its getting more and more confusing. Candle stick patterns have failed and today we have got a Doji at resistance line of 7204. Though it is the level near to a strong breakout but volumes today is not supporting my view for the long breakout. But if we look at indicators, below in the chart,  they have given bullish crossover with their Moving average. Secondly, derivative data is suggesting 7000-7100 as strong base for next week as much writing on PUT was witnessed. Thirdly,  global markets have given bullish breakouts from the consolidation which means that Nifty should compile with their trend. So overall charts are confusing but biased towards long. Crucial levels for tomorrow at 7204 on upside. While for downside there is not specific level, but shorts would get stronger if the open is below 7127. So safe traders avoid markets, risk takers stay long but keep sl of 7100 the opening is gap down.

Germany showing back confidence

Germany has always been a focus whenever there is any crisis talks in Euro area as its one of the strongest economy at fragile time. But recently it faced some problem or may say rumors that Deutsche Bank is in liquidity crunch and bear traders were even spreading a next “lehman crisis’ in Germany.. But i thought that was stupid to conclude so easily. When Germany can take a step to save crisis in Greece, Spain or say Italy, wont it try to save their own bank??? But as the time passed and Bank officials showed confidence on their liquidity assets, we have seen markets around the global stabilizing and DAX index giving a strong sign of Short Covering. Though still the global economy is fragile but for time being there is no Deutsche crisis seen in near future. As you all could notice that, DAX has opened up above the strong resistance channel which it was holding since High this year. Though its early to confirm the reversal as we have seen false breakout too once before. But short traders so be Cautious as even indicators are supporting upside bias. 9250-9338  is strong support range and we should watch on closing basis for the same. Still Stay Alert!!

"Pati" Gave a good fight back

Today the fight continued between the Villain and the Hero. We saw a positive to flat opening and it was expected that we will follow global peers and move on but villain i.e., Bearish engulfing had a role to play and we saw sell-off in first hour breaking confidence in the street but the hero fought back we saw sharp recover to 0 level by 12pm. From the derivative side we had witnessed highest volume trading on 7000 CE and 7000 PE which acted as level of pivot till 1:30pm. But than we saw a great recovery in the market after Europe opened up positive and traded 1%+. Technically, PSU banks read the short covering as they already showed positive divergence since last few days. We managed to close above 7050 which was acting as a minor resistance on the option writers side today. So Hammer to fight bearish Engulfing which fought morning star pattern has been formed..pretty confusing ..huh?.. Yes..Nifty charts are still confusing for some clear trend. Levels of Confirmation remains the same as yesterday which is 7204 on upside and 6870 on downside.

Pati, Patni aur Woh!

Though title indicates a Bollywood post but its not! The post is surely about equity markets but somehow today’s move on Nifty relates to this Bollywood title. Mondays move had given a birth to a hope of strong reversal for long traders and it was confirmed with a Bullish candle opening above Fridays candle and confirming “Morning star” pattern as Circle Green in the attached chart. But today entered a villain in the chart and it gave a “bearish engulfing” with the help of yesterdays chart, souring the relationship of a “Morning star”pattern. Now situation is exactly same as a one gal with a married guy and extra marital. She is confused with whom so should live further and the case is registered in the court. Hearing is tomorrow and we should be clear of her move further. Today markets also resisted near the trend line which was acting as a strong support previously around 7204. So now traders should be cautious tomorrow and wait for clear close above either 7204 which is high of “Bearish Engulfing” or below 6869 which is the low of “morning star”. So all the positions tomorrow should be Hedged!!