THE O'HIGGINS STRATEGY

O'Higgins, a US fund manager, outlined his strategy in his book Beating the Dow.

The system is simple. Get a list of the 30 stocks in the index. Take the 10 highest-yielding stocks. Looking at these 10, invest equal amounts in the five stocks with the lowest share prices . Leave alone for a year. On the first anniversary of your selection, review the list again. Reinvest the portfolio plus the accumulated dividend income in the new selections. On the second anniversary do the same thing. And so on.

According to O'Higgins, shares selected according to his system had produced an average annual performance five percentage points better than the Dow Jones over the period from 1961 to 1995, when dividend income was included in the calculation. It doesn't work every year, but over time its results are impressive.

2009 List (prices as of close of 31 Dec 2008)

Standard Charted: 875p

HSBC Holding: (662p)

BP: (526p)

Barclays: (153.4p)

BT Group: (135.2p)

RBS was at number 3 in above list but has been excluded as they will not be paying any dividends this year.

Another list from FTSE 30, which is not based on the market capitilisation but average share price is

BT: (135.2p)

GKN: (97p)

ITV: (29.75p)

Ladbrokes: (185p)

Logica: (69p)

2008 list (price at start and end of year)

ITV: 85.4 - 39.75 = down 53%
BT: 272.75 - 135.2 = down 50.4%
GKN: 282 - 97 = down 65%
Logica: 117.75 - 69 = down 41%
Royal Sun & Alliance: 140.21 - 138.1 = down .7%

Grim outlook

In UK the outlook is very grim. There are more and more companies going into administration. It was Woolworth earlier this month, yesterday Whittard and today Zavvi.

Most of the stores on the high street have started the Christmas sales very early this year. The consumers are just not willing to spend.

If this continues very soon we will have ghost town centers. There won't be many business left on the high street.

The house prices continue the downward spiral.

The banks are just not lending money to anyone though they are ready to give you credit card with 0% offer for 12 months.

Current theme is spend sensibly, stick to your current job and stop listening to Robert Preston. That guy makes thing sound really awful.
Listen to Johny Walker instead...

Comparison website

Do you use comparison website to compare car insurance, best saving rate, energy or cheap mortgage rate? If yes then beware of the information you enter on these websites. Some of the small players can use your information to do a credit check even without your consent. Please note that these website are not regulated.

I also use these price comparison website but I tend to stick with market leaders and give fictitious information just to get an idea on the quote. Then I contact the insurance company or bank to get the deal.

Please note the business model these website use is that they get paid by the providers and not by the consumers.

New to investment?

Are you thinking of investing (not saving) and are lost for options, then this is the book for you.


Please note that this book covers mostly UK stock market (FTSE). It starts with very basic of investing in stocks and then goes on to explain pros and cons of more complex investment options. Some of these options are available to only institutions investing big money.

What I liked about this book was the wealth of resources it provides. I would say everyone should read this book as it helps to clear your fundamentals.

High volume breakouts

These are high volume breakouts today

RBS - after US broker Merrill Lynch resumed coverage with a “buy” recommendation and a price target of 93p.

Tesco - Third quarter sales better than expected especiallty in the current market conditions

British Airways - Merger talks with Quantas. Remeber they had been merger talks with Spanish carried Iberia in past.

In normal market conditions these shares would have been a good bet. In current market condition I would say "trade with caution".

BA has been on my watch list when it was 108p. I guess it might be too late now.

There will loads of opportunities to make money when market stabilises....

Value stocks

These are some to the stocks from my watch list which have rallied 10% or more in last one week itself

British Airways
British Telecom
Vodafone
Marks & Spencer

These as still a good buy on some pullback. They are close to 52 weeks low. These are long term buys. I will be accumulation these in my ISA.

One common factor about these stocks is that all 4 companies are carrying out major cost cutting in next year or so.

From Morgan stanley

..."Sentiment was boosted by a note from Morgan Stanley strategist Teun Draaisma who opined that “the severe part of the bear market is over, that there is value, but probably no hurry.” Draaisma abandoned his previously bearish stance after four main market indicators - valuation, capitulation, risk, and fundamentals - all came up as "buy" signals. "

Some pullback due...

Markets around the world have rallied for 6 consecutive sessions. Such long rallies dont sustain very long without some pullback. Many beaten down stocks have rallied more than 50%. So expect some pullback and correction.

If you have bought stocks in last 6 days and have made more than 30% profit and have short term goal, it is time to book some profits. Poeple with long term goal must hold and buy more at every pull back.

Market is in confirmed bull rally mode.

Rebound

Stock markets around the world rebound...this was highly expected after the Govt intervention over the weekend. However the weak economy concerns are still there....so you have to trade very cautiously in this uncertain time. Don't get carried away by today's move....such moves fade away very quickly. What was lacking today was volume....

Some high volume stocks on BSE
TCS
SBI
L&T
ICICI
Punjab LLyod
India Bulls real estate

Some high volume stocks on LSE
RIO
AAL
XTA
SSE
SVT
BLT
NXT
UKC
GOO
VED
NG
ANTO
TUI

As you can see, most of the stocks on LSE were energy stocks and defensive (Utilities stocks). No clear leader yet. Looks like this rally will fade away soon. Stocks are just gaping up after recent fall. Wait for good opportunity. There is no clear direction yet.

Market back in green zone

Last 3 days have been very good. Low oil prices are helping to push the market up. Both BSE and LSE are in green zone.

Stocks to Watch on LSE
Greene Kings
All house builders - Persimmon in particular
Inchape
Ashtead group

Stock to watch on BSE
Bank stocks - HDFC in particular

Stock Picks

Some growth stocks to pick in current volatile market

LSE
--------------
Cobham - Defence, US focused
G4S - security related, good earnings
Arriva - public transport, earnings on rise as more people use public transport, won major cross country contract earlier this year.
Cairn Energy: major oil exploration in Rajasthan India, will benefit from hig oil prices.

BSE
----------------
ONGC - Buying Imperial
Infosys - buying Axon
Tata motors - Soon to roll out Nano - worlds cheapest car
HDFC Bank - Fastest growing private bank.

Bullish rally

For BSE, MM has been in green for last 3 sessions. So it is safe to trade here as long as MM remains in green zone.

For LSE, MM is slowly edging towards green...

stocks to watch for
Travis perkins
Wolseley
Carillion
BSS group

BSE Stocks to Watch

KLG Systel
Union Bank
Trevini

Godfrey phiilps

LSE Stock watch list

Lonmin - Bid approach from Xstara
Hunting
Aquarius Platinium
Collins Stewart
Johnston press
Debenhams
Jar Llyod Thompson
Spirent Commication

Is worse over?

Last few weeks action seems to be suggesting that market has bottomed out and now is in rally mode. Some experts think that is bear rally however MM reading seems to be suggesting that this is turning out to be a bull rally. Figures have been turning to green slowly. Next couple of weeks will be crutial to support the current rally.

Tide about to turn

MM for BSE is turning towards green. Get ready for some exciting time ahead.

Stock to watch for
Nav Bharat Ferr
Bata India
Maytas Infra
Hinduja TMT

LSE Stocks to Watch for
Imperial Energy
Punch Taverns
Mondi
Trinity Mirror

India second best for Investment

From a financial news paper.....

" India is the second best country for business investment, a new survey of American corporate executives shows. Conducted by Development Counsellors International every three years, the "Winning Strategies in Economic Development Marketing" survey has tracked trends in economic development since its inception in 1996. This is the first year respondents were asked to rank the business favourablity of the world's 25 largest countries (based on GDP). Of the 281 corporate executives who responded, 53.1 per cent named China as the most favouable country followed by India (45.1 per cent), Mexico (30.1 per cent), Britain (25.4 per cent) and Canada (22 per cent). The corporate decision-makers who named India as the best for investment cited the country's labour force - including its supply, skill level and cost 65 per cent of the time as the reason for their positive perceptions. "

Recovery on way

Market seems to be in recovery mode. MM figures are slowing turning towards positive side.

Stocks to wat on BSE
SEl Manufacturing
Punjab Lloyd
Sterling Biotech

Stocks to watch on LSE
AKT

LSE - Stocks to Watch

MONY
HBOS

LSE

Stock poised to bounce
Vodafone

Stock to rally further
BGC

Singh is King

Indian Govt has won the majority vote by a narrow margin. Market was expecting this and has already priced in this news in last 4 sessions. Market is up more than 10% in last 4 days.

Now political uncertainty is out of the way, issues like interest rate, inflation will weigh on the equity prices.

MM numbers are improving which is good sign. Next fews days would be crutial to see if market can hold on to gains. Banking sector is the one to watch.

Stocks to watch
Cipla
Punjab Chemicals
United Spirit
Maruti

BSE - Political uncertainty?

22 July is very critical for ruling government, country, stock market and economy. If the government looses the confidence vote, many projects will be shelved which is bad news for the economy and the market. However if they win, things will gain pace and it could be completely different story....

LSE - Start of New Rally?

...may be. Too early to say that. The ratio's are turning postive. Financials and house builder stocks have rallied on back of postive earnings news and falling oil prices. Currently market is so volatile that it takes one bad day for oil for these stocks to loose all gains. Some of the housing stocks have doubled in less than one week. They may under go a minor pullback at that stage before they continue the next leg.

Stocks to watch (for bounce)
BVLN


Stock to watch for further rally
ADN
AMS
BGC
DCA

Fear and Investment

In a falling market, an invetsor needs to keep his cool and make rational decision while investing. I came accross this very good article on Fear and Investment by financial journalist Tom Stevenson.

Stocks to watch

BSE
Ranbaxy


LSE
ICAP - Earnings news
Trinity Mirror
DDC
BKY
Arriva

Bounce expected...

BSE MM is showing extreme reading which means a bounce is imminent at this stage. However there is little clue if this will sustain. So stay clear as of now.

Stocks to watch
HDFC bank
Ranbaxy labs

Market Update

Market remains volatile. BSE ended low after all ups and down.

LSE rallied helped by M&A news.

Stock to watch for - ITV : possible candidate for takeover.
Playtech - new contract.

LSE Market Update

LSE is now in bear zone. FTSE is down 20% from 12 months. This by defination is bear teritory. Being on the sideline is safe bet. Also market monitor is in red zone.

Stocks to watch for rebound
Aveva
Thomas Cook

Stocks that may rise
EBT China
Experian

Stocks that are highly like to undergo some correction(possible short)
All house builders - some of them have rallied 50% in last 2 sessions.

BSE Update

A reflex bounce today, closing short positions and bargain hunters out, falling oil prices and political unstability already priced in. However things will be different tomorrow. Dow is down 2% today and this will have its effect on BSE.

Stock to watch : Godrej industries.

Market update

Market seems to be improving slowly. MM reading are still in red.
There are no signals for BSe

For LSE, stocks to watch are Stagecoach (earnings), Arriva and First group. With rising oil prices these companies earnings are expected to improve as more people will take to public transport.

LSE Market update

MM is in red zone. Though 3 months and 1 month are showing extreme reading so expect some bounce at this stage.

BSE Market update

Market is still in red zone. It is too early to say that market has bottomed out. 65 days is showing extereme reading. so some bounce at this stage is likely. Time for day traders to make some killing. Long term and persioner, sty away.

Stocks to Watch
EP: Alstom, Godrej Ind,
DT: Orchid chemicals

MDT: Ranbaxy, Orchid Chemicals

LSE Market Update

Market is in red zone. A short term bonce is likely but medium to long term, it is bearish.

Marks and Spencer - likely to bounce.
Netplay
Chromex mining
Informa
Astrazenca

Bullseye!

As expected, there was a reflex bounce on BSE. But looking at the market monitor, there is not much conviction behind the rally. So chance of rally failure are highly likely unless we see follow through days in next 3 to 5 days. It is too early to say that market has bottomed out.

Stocks to watch
Tata power
Gwalior Chemicals
Jindal Drilling and Industries
Lupin Chemicals
Satyam Computer Service
Mastek
I-Flex

BSE Market Update

Market has deteriorated to such a level that a reflex bounce seems imminent at this stage.

There are no stocks to watch due to poor market market conditions

BSE Market Update

Market condition has detoriated. At this moment there are no support nor there are any signs of recovery. There might a short term bounce either due to profit booking on short positions or bottom fishers. Inflation is major cause of concern at the moment.

Wait for signs of recovery before diving in again. Companies with no debt on their balance sheet are doing well. This includes IT giants and pharmacetuicals.

Stocks to watch
Geometric software

BSE Market Update

A expected bounce after few down days. However number of stocks up 4% on high volume is very low. It shows the nervouness is still there in the market.

Stocks to watch
Spice communications
South India corp
Goldstone Technologies

Market update

BSE is in confirmed red zone. Staying on the sideline is best policy for the moment.

There are no signals due to the market conditions

Market update

MM is still in red. There was some bounce back but major stocks are still down.

Fertizers, Chemicals and Pharma stocks seems to be doing good in these uncertain times.

Stocks to watch

Ranbaxy,
Lupin
Spice Communication

BSE Market update

After a panic selling, bargain hunters will be now dominating the market in short term. So expect some bounce in the next trading session.

Stocks to watch
Cairn India
Lupin Chemicals.

Amibroker - LSE Data - problem solved

I have fixed the issue with LSE data. So I will start updating LSE data henceforth.

LSE - Stock to watch

PFL.L - Premier farnell - They have profits up 37% in last quarter! This stock has potential to run 100 to 200% or may be more.

Other to watch for

DSG -
Rentokil

Pullback???

As expected a short term bounce but overall market is bearish....

Stocks to watch
Tata Power
Paradyne Infotech
Borax Morarji
RayBan Sun Optics
Chambal Fertilizers
Infosys
Satyam Technologies
Wipro
Dr Reddy's lab

Market update

Market seems to have nose dived. What a chnage in confidence a Rs5 hike in petrol can do. Govt of India have increased the Petrol, Diesel and LPG prices. But people in India fail to understand that is global phenomenon but they are taking it personal against the govt. The price hike has given rise to the speculation that the other parties may withdraw support and we may have early electons. Market usually over reacts to polictical uncertainty but I think long term investors should stay in the market. There are some good bargains available. Look at companies with high yield. Investing regularly in these companies at regular intervals will pay off in long term.

I am in long term here....

When it rains...

...it pours in India. This is what it sums up the action on the stock exchange today. Fear of the government collapse lead the panic selling. The ratios have been slowly turing slow towarrds red but today action was a major blow. There might be small bounce in short term but long term the market monitor is turing bearish.

Stocks to look for

BSE
================
Bihar Tubes


LSE
=============
EMG - Profits up 60%

BSE Market Update

Ratio's in market are slowing turning towards red side. Loads of factors: negative sentiments, profit booking, high inflation, rising oil prices; all are having effects on the share prices.

However few sectors are emerging as winners in this. First because of weak rupee, IT sector is doing good. The other is Pharma which is usually a safe bet in uncertain times.

Sleeping Giant

After underperforming for a long term, Japan might be waking up. Nikkie has rallied 15% in last 2 months. More fund managers are now putting money in Japanese stock market. Could this be the next destination for investors after BRIC???

Bear or Bull?

Worries about about high inflation is taking its toll on the market. Last few weeks inflation has been on the rise. Also the goverment is proposing to hike petrol prices by Rs 10 which is almost 20% hike. Now this will push up prices of almost everything in India as road transport is one of the most widely used mode of transport. This will squeeze the spending power of the consumers.
Looking at last few weeks data, market has a support at around 16500 and resistance at 17100 to 17300. As it is hitting the support level, there are high chances that market will rally a bit start of next week. Swing traders can make a killing here.

BSE Market update

Market still is in green zone. There has been some pull back recently after some strong rally but most of the stocks seems to be holding gains and moving up in steps.

Some stocks to look for....

Assam company
All technology shares; Wipro, Infy, TCS and some small not nery popular companies like omnitech
Transworld International
Gujrat NRE Coke
Bombay Dyeing
McLEod Russel

LSE Market update

I am not posting any updates for LSE as I think free data from yahoo for Amibroker is not very reliable. In recent weeks some stocks have shown unusal spikes. There seems to be no explantation other than bad data. I am looking for some pther source of reliable data but it is not free.

Blog updates

Due to various personal commitments, I am not getting time to update the blog. I will resume the udpates very soon.

LSE Market Update

No candidates for any scans due to market condition. MM is still in green but I doubt the free data from yahoo for 30 days ratio. I am looking for a reliable souce of data.

BSE Market update

Market is hitting a resistance level at this stage but MM is still in green zone.

EP Candidates:

505190 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=505190
517146 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=517146
522183 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=522183
530951 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=530951
--
532478 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532478
532797 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532797

BSE Morning update

I am off today hence I am making this post early today.

Morning update:

BSE is racing ahead. If you look at MM for last few weeks, we have been in green zone and this is confirmed by the 15% rally in BSE. MM has been really usefull and it has helped me to stay in market even though many high flying analyst from Bombay have been very bearish about this rally. What is good about the recent rally is that is slow and steady unlike last year. Most of the stocks are holding gains. Also global cues that worst about credit crisis might be over is helping.

Last few weeks Banking, reality and tachnology stocks have made some healthy gain. For someone wiliing to invest in technolog stock, you can invest on some pullback. Most of these companies had good earnings. Banking stocks like ICICI, HDFC, BOI and SBI are doing good. So keep an eye for some pull back.

LSE Market Update

Even though MM is in green zone, market seems to be stalling i.e. it is opening higher but then really struggling to race ahead and closes just very near to previous days closes. Last night there were 0 points gains. Now this is very rare also bit worring at the same time. Stalling is usually followed by a bear rally. Lots of neagtive news about housing market and higher fuel and food prices are also impacting the sentiments to some extent.

Due to above market conditions there are no candidates for either DT or EP scans.

BSE Market update

EP Candidates:


522205 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=522205
526733 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=526733
532313 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532313
532343 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532343
532694 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532694
532891 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532891

DT Candidates: None

BSE Market Update

After a brief pause, the market rallied today on news from RBI to hold the rates.

DT Candidates:
------------------------
531439: http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=531439


EP Candidates:
==============================================

503873 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=503873
517562 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=517562
519560 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=519560
532628 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532628
532798 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532798
500376 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=500376
532755 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532755
500020 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=500020
500295 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=500295

Mostly technology shares. These shares have been rallying on positive earnings news. However these companies rely on earning from US and europe and are also affected by currency fluctutaion.

Focus: None

BSE Market Update

EP Candidates:
=================

531680
500356
524552
522074
519560
500155
500043 - BATA
530075
522064 - HONDA SIEL
532318
532711 -
500253 - LIC

DT Candidates

Market update

Due ot market condition, there were no candidates for either scan on Friday for LSE.

For BSE
DT Candiates: 532454: Telecom - earnings suprise.

BSE Market Update

EP Candidates:

503873- http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=503873
507813 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=507813
523586 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=523586
532432 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532432


DT: None

LSE Market update

EP Candidates:
ITK - return to profits
MLH - bid offer
ACMG - earnings above expectations
DNX - discovery of new oil well. Riding on rising oil prices. 12 month high.

DT:
BOR

BSE Market update

Market rally seems to be stalling a bit but the MM is still more on the green side. Keeping margins tight at the stage will be a good idea.

DT Candidates:
None

EP Candidates:
500109 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=500109
500870 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=500870
521030 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=521030
523144 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=523144

None of interest

LSE Market update

EP:

FKI
MRO

MRO agrees to takeover FKI. Both shares rallied

DT: None

BSE Market update

EP Candidates:
531683 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=531683

DT Candidates

532725 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532725

BSE Market update

Market continues its upward march. MM has been flashing green for last week or so. IT stocks have rallied in last 4 days. Some stocks are up more than 20% in last week. There might be a minor pull back at the stage before the next round of rally. Stocks have shrugged off CRR rate hike. Market is riding on good earnings news.

EP Candidates:
532523 = http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532523
507960 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=507960
522113 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=522113
500057 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=500057
522205 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=522205
532727 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532727
532481 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532481
532345 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532345
532400 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532400
500199 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=500199
523025 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=523025
532653 - http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532653

DT Candidates:
532845 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532845
513010 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=513010
532884 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532884
532766 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=532766

Possible New Leaders:
509709 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=509709
512299 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=512299
521151 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=521151
524715 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=524715
590033 http://portfolio.rediff.com/money/jsp/quote_process.jsp?query=590033

LSE Market Update

I am having difficulties with the EOD from yahoo. Some stocks data hasn't been updated correctly. I tried backfilling using MSN but no joy.

MM is in green zone.

DT: TLW
EP: DEMG, CDN, RPT

BSE Market update

BSE avoided the worse day yesterday as it was closed due to bank holiday in India. Markets around the world melted on back of GE news. But what a start today. Earnings season started with a positive note from Infosys, India's largest IT service company. All IT companies stock rallied on postive news. Market monitor maintains its march towards postive zone.

EP candiates: 506685, 530075, 532494 (technology stock, new product), 524372 (3rd EP in last 5 days), 500359 (pharma stock, tie up with AstraZeneca, 12 months high)
DT: 511147, 500134

Market update

LSE
=================
EP Candidates: MPLE, ENO - Bid approach for 260p stock rallied to gap up
DT Candidates: VPC

BSE
================
None

Market update

No candidates in todays scan either BSE or LSE

MM edging towards green.

Market Update

MM even though fluctuating between green and red zone is showing an interesting emerging trend. Stocks up 25% in 65 days is slowly moving towards positive zone. It is already green for London stock exchange and is moving towards green for Bombay stock exchange. Watch this space.

There is some issue with the LSE data on my machine. Hence partially updated MM for last two days. Also it is showing false signals for various scans for last two days. Hence no update here.

BSE
============
EP: 509715, 524372, 532654
DT:524372, 532765,

Market Update

BSE
==============
EP: None
DT: 532799 - This has 2 EP signals in past 4 days.


LSE
===================
DT: None
EP: Mostly penny stocks. AFCR had EP in last 4 days. so not a good candidate any more.

Market update

Bombay Stock Exchange
=====================
EP Candidates: 501379, 531795, 532799, 532804
DT Candidates: 501379, 516078

London Stock Exchange
===================
EP Candidates: HUA - bid approach, stock has gapped up close to bid price. So not a good candidate any more. (many penny stocks and stocks which had EP is recent few days e.g. AFCR)
DT Candiates: CHL, CIU, RRS

Market update

Start of new quater, new financial year and looks like spring has finally arrived. MM has been edging towards green zone for last few days. This could be start of a good trading period. Next few days would be crutial. Watch this space.

Bombay Stock Exchange
================
DT Candidates: None
EP: Candidates: 518051, 532395, 532665

London Stock Exchange
================
EP Camdidates: GCAP, AFCR
DT Candidates: CFM, SMT

Market update

BSE
===========
EP Candidates: None
DT Candidates: 507552, 532395, 532845

LSE
================
EP Candidates: AFCR, SOLG, VOG, ROC
DT Candidates: SLV, HGM

Market Update

MM is slowing edging towards green. In past rallies have failed due to very volatile market. It takes a small negative or positive news to turn things around.

BSE
=============
EP: 532799 509709
DT: None with high volume.

LSE
==================
EP:ROC
DT: PDT

Market update

BSE
========
EP Candidates: 512579, 532395, 532648
DT Candidates; 512579, 532395 532548, 532672

LSE
==========
EP Candidates: All penny stocks.
DT candidates: CFM, EPO, HGM

Market update

BSE
================
EP Candidates: 500010 - HDFC Bank - No major catalyst
532215 - Axis - No catalyst.

The above stocks were up due to market conditions. These look good buy thought as the banking stocks have been battered severly in last few days.

DT Candidates:
532106 - couldn't find any major news however graph shows smooth curve.
532793 -


LSE
================
DT Candidates: None

EP Candidates:
RTN - No catalyst
TW -
PFC
TATE

All of the above look good candidates with good volume.

New Leaders

These stocks have been advancing in last few weeks inspite of volatile market conditions.

LSE
===================
ASD (Pharma sector - known to be safe sector during vaolaile market). Trading close to 12 months high.
PTEC (Travel & Leisure sector)

Raj

Market update

MM is in red zone. Market is not holding up the rallies and is breaking down in a day or two.

No candidates for DT or EP for LSE.

BSE closed due to festive period.

Happy Holi!

Raj

Market update

BSE
================
DT Candidates: 531213 - lacks volume, also up more than 25% in last 65 days. So too late to enter
EP Candidates: 500295 - Nothing exciting

LSE
==================
EP Candidates: None
DT: None

Market update

As expected the markets rallied. BSE lost the ground towards end of the day but as LSE and US markets have closed higher today, expect BSE to rally tomorrow. It is too early to enter the market for long position. Day traders make a hay while you can!


BSE
==============
DT Candidates: 502090
EP Candidates: 532902


LSE
==============
DT Candidates: ALD,
EP Candidates: PGD, KBC, TNZ, MSY (Earning Suprise), IAP

Highlighted ones are the one to look for.

Feedback?

I have been blooging for some time now. Some of the shares I have mentioned have done well in the bull market. I would like to get feedback from readers of this blog.

1. Do you find this blog useful?
2. Is there anything else I must add to this blog?
3. If you are a trader, can you share your experience with me/others? Please feel free to contact me on rajeshmulchandani@gmail.com

There is still so much learning to do. All credit goes to Mr Pradeep Bonde for getting me hooked to trading. You can see his work on Stockbee blog and website. See the links in the sidebar.

My goal is simple: To achieve financial independce in next 5 to 10 years time. It may take longer but I think its worth it. Let share our experience and learn from each other. Lets help each other to achieve our goals.

Raj

Market update

There was blood bath on all major market across the world. This was expected due to Bear stern news. However it seems investors may be over reacting as MM show extreme reading. So expect a bounce tomorrow. Day traders can make some killing here. Long term the outlook in bearish. So stay in cash or trade with extreme tight spots. Most of the share are trading at a discount, so a good opportunity to value investors.

BSE scans
================
No candidates.

LSE Scans
===============
EP: NVE, FLO, SSY
DT: None

Michael O'Higgins "Dogs of the dow"

This strategy is for lazy investors who want to put very little effort in making money.

1. Select top 30 stocks
2. Take 10 highest yealing stocks
3. Invest equal amount in 5 shares with lowest share value
4. Leave the money for a year. On first anniversary review your porfolio. Reinvest the capital plus dividend again.
5. On second anniversy repeat the above steps again.
   

Even though the above strategy doesn't work every year but over the period it will be beat the index by atleast 5%.

A variant is select 5 stocks in step 2 and invest in the one with the second lowest share value. O'Higgins called this PPP: Penultimate profit prospect.

Following are the list of stocks for currently year.

ITV

BT

GKN

Logica

Royal Sun & Alliance.

Market update

BSE
=============
EP Candiates: 513010, 526560
DT : None

LSE
================
EP Candidates: GLD
DT Candidates: None

LSE Market update

After a brief period of green, MM is back in red.

No EP or DT candidates

BSE Market update

Market on Wednesday was showing signs of stalling. This usually leads to correction. That is what happened on Thursday. Now the MM is showing extreme readings. Again this leads to short bounce. So don't give into short term rally. It may be good for day trader but long term investors, stay on the sideline. Wait for any confirmation before jumping in. As of now its all doom and gloom.

EP candiates: 526560
DT Candidates: 526560. Underwent more than 50% correction. So not a good buy.

Market update

BSE
==============
DT Candidates: 511706-, 512559, 522163-, 531358, 532766
EP Candidates: 523248, 526550, 530263

LSE
===============
EP candidates: There are about 12 of them but these are worth considering
SL - earnings updates
KAZ - bid news
AGY


DT candidates: None

Market update

Market monitor is still in red. So trade with caution and short stops.Lower profit marging to 7 to 10%

BSE
===================

EP Candidates
==========
509695 - good volume

512531



DT Candidates
============
532672, 532753, 600470


LSE
======================================
DT Candidates: None
EP Candidates:
ORCA: Takeover bid
TMN : Bid approach, 3 digit eps growth in last two year

Market update

MM for LSE is back in red. Expect more trouble on Monday.

No scans results.

MM for BSE

MM for BSE is showing extreme readings. This usually leads to a bounce. So expect some fireworks on Monday.... Not positing any scan results as the market is very volatile. This may be good time to bargain hunters. Some leading stocks are 50% cheaper.

I will update MM for LSE later.

Market update

Market seems to be edging back into green. In recent past market has been unable to hold on its gain for long. A slight negative news seems to shift weights on other side.

EP Candidates
=====================
CLY, MTV, UTN, ERU, ETQ, TNZ, SQS

Focus: TNZ - had EP on 29th Feb, good earnings
ETQ - possibly due to inside buying

DT
===============
EXC, INDY, KTB

Focus: KTB

Market Update

MM for LSE updated. No data avaialble for BSE today. Will try again tomorrow.

Change in BSE, NSE trading timings from today

Trading timings of the Bombay Stock Exchange and the National Stock Exchange will be revised from Tuesday till March 18, as the sun's position may disrupt connectivity, causing difficulties in receiving data via satellites.

The "sun outage" as it is known, will take place from March 4 to 18 between 11.45 am and 12.25 pm, during which traders and investors may face some loss of connectivity.

Accordingly, the two exchanges will stop trading between 11.45 am and 12.25 pm and resume trading from 12.30 pm, a stock exchange circular said.

Trading on the bourses will start at 9.55 am and close at 4.15 pm local time owing to the sun outage, the exchanges said.

India shining part 2

I visited India after a long gap of 4 years. My friends have been telling me that India has changed in a big way and it will be a shock to my system to see the change. To some extent it was but the "awe" factor was missing.

Here are few observations I made during my trip.

1. There are more business channels now which are constantly broadcasting buying or selling recommendations. Average housewife or pensionnaires are watching these channel more than the entertainment channels.
2. People are investing all their lifetime saving in stock markets these days. Some even go to the extent to pick up personal loan to invest in shares.
3. Not many do any kind of research before buying shares. They buy shares because they are going up or it was recommended by a broker. According to them share market heads only in one direction. I hope the bloodbath of 21st Jan 2008 on BSE was an eye opener to many.
4. There are stock brokers with personal portfolio management service almost on every street. Portfolio managers as young as 22 years are managing potfolio woth millions of rupees. They say they get "tips" from big brokers everyday morning and they buy or sell based on that.
5. Banks are getting more demat application forms compared to saving account. People are opening Demat account even in the name of 1 year old babies. Because of the number of applications, it took me 2 months to get a DEMAT account.
6. Reliance is a household name now.
7. House prices have gone through the roof. In Mumbai, apartments are 4 times expenive in last 4 years and are still going up.
8. Even street cleaners carry mobile phone these days. It is cheaper to use mobile compared to land lines. There are more mobile services available in India compared to UK.
9. Supermarkets are a hit among middle and upper middle class. People who bargain for 1 Rupee with the street vendor, pay twice the price in these shop without uttering a single word. These supermarkets have created lots of jobs for youngters but it is killing local business. I believe this is what happened in Western countries in last decade.
10. Gap between rich and poor is getting wider.
11. I have never seen construction of new buildings at such a big scale. Builders are not leaving a single inch of the land. Also they are selling properties in terms of "super built up area". Google this term to understand what it means.

Overall it is good India is growing very fast but at a price which the people of India will realise in due course of time. Still there are many basic problems need to be resolved.

Market update

MM is back in red for LSE and BSE. Market has been unable to hold on to gain. Adventorus traders should with caution. Beginers should sit with cash on the side line. This might be a good time to fish out some value shares.

LSE
===============

EP candidates:

FRM: aquisition
MLR

DT Candidates:
None

India Shining Part 1

Last month I was on holiday in India. As I was looking for EOD data for all scripts trading on BSE, I thought what better to look for than the exchange itself. And guess what day I choose to visit the exchange - 21 Jan 2008, the day stock markets melted across the world. I didn't had a clue about the meltdown till I was outside the exchange. People were gathering outside the exhange to witness the stock market melting in front of their eyes.

This was an experience for me. People were frantically calling their brokers to sell and as always the systems went down under heavy load. Towards the end of the day there were rumors even the mobile network was jammed. I did experience some difficulty calling home from my mobile around that period but I thought this was normal.

I was obseving some people's reaction outside the exchange. There were people from all leading news channel interviewing people.Here are few commenst...
The market was down by some 1500 point on that day yet one passer by said "oh don't worry it will recover 1000 point by close" and we were just 30 mins from close.

1. "Blame it on goverment for not doing enough to protect the market".


2. "Blame it on Reliance IPO". Reliance Power IPO closed on 18th Jan where it was over subscribed by 73 time.


3. "This is good time to buy as stocks are very cheap".
   

The above comments reflects the understanding of an average person about the stock market. Things have changed a lot since I visited India about 4 years back.

I will cover these in my part 2 of this post.

Market update

LSE
====================
Market is on the verge of turning red again and it looks more likely to happen on Monday as stock markets across the world ended the week in red. They have given up all the gains of last two weeks. So outlook is not good.

EP Candidates
EXR, FMJ, GETM, MRP, PCI, RET, RKH, SCO, TNZ.

DT Candidates
=========
BLVN, HGM - Not very encouraging volume.

Market update

Market monitor for LSE is in green.

LSE
=============
EP Candidates:
CFU - earnings update
CHW - no news but EPS growth looks good.
COP - no news. Oil company helped by rising oil prices.
DES - insider trading, oil prices. This share has been on the up recently so probably too late to enter now. wait for some correction.
OFF - dividend raised.
RKH - oil price effect
STP - penny share. Ignore

DT Candidates
========================
GETM
XPT

Focus None

Market update

Market monitor for LSE is in green zone. This signals "safe" period for trading. Over here momentum based methodologies like EP and DT tend to do better. So keep an close eye on the stock popping up in these scans. MM for BSE is still in red zone so trade with caution.

LSE
======================
EP Candidates:
ADC - new contract deal.
MAY - Very encouraging volume. Bid approach.
RIFT - penny stock
ULT - Penny stock. Had EP few days back.

DT Candidates: None


BSE
================================
EP Candidates:
500166 - good volume
500467 - good volume
504036
508989
509715
512587
520066
532694
532857


DT Candidates
500103
532234
532694
532832
532850

Market Update

Here are results of todays scan

LSE
======================
EP candidates:
DES - Had an EP on 13th. so too late now.
DETS - This looks a good buy
FDI - New findings
FEP - volume not very encoraging
RKH - same as above
SBT - good volume, insider trading
VER - poor volume

Few of above had EP in last 5 days so they were good buy then.

DT Candidates:
None

BSE
========================
EP candidate: 512587


DT candidate: 500670, 506022, 532425

Analysis later

Market Monitor

Market monitor is up to date now. I have updated the code. As you can see MM for LSE is flashing green now. We have seen few rallies in last few days. Market seems to holding on to the gains. Banking sector which has been worst performing so far seems to be gaining on earnings news and increase in dividend.

I will post results of my scans later.

Market Update

MM will be updated later as I need to tweak my code and cross check the figures.

Here are results of the scans

BSE
===================
DT: 531358, 532177, 532439
531358 : Volume looks good but couldn't find any latest news on this.

EP: 500151 - Volume is just above avg. No major news except there is board meeting next week about restructing. http://in.finance.yahoo.com/q?s=500151.BO

LSE
====================
EP: CGNY, IBB, IVE, LNG, VML
LNG - Earnings update.
All of the above are penny stocks so nothing much exciting.

DT: None

Market Update

MM for LSE is looking postive. The ratio are turning green. If market can hold the gains, soon we will see 65 days ration in green.
LSE
DT : ITI
EP: ITI - Penny stock. Ignore
Virgin: BRM, OVG, IDD, GPC
Focus: None

MM for BSE is showing bit extreme figures. I will have to do some tweaking to volume.
BSE
EP: None
DT: None
Virgin: 531598
Focus : None

How Index is calculated?

Many people have asked me how the index is calculated and what does it mean. I came across this very good article on Rediff which explains how Sensex (Index for top 30 companies in India) is calculated.

You can view the full article at http://www.rediff.com/money/2008/feb/21bspec.htm

Raj

Market Update

LSE
DT : ITI
EP: ITI - Penny stock. Ignore
Virgin: BRM, OVG, IDD, GPC

BSE
EP: None
DT: None
Virgin: 531598

I will do a research later. This is just a quick update.

Market update - 19 Feb 2008

Market seems to be stalling. It opened higher but just closed few point higher on BSE and LSE. This is not a good sign and a correction may happen now.

Also none of the scans are showing any encouraging data. It was strange to see no breakthroughs on BSE. I will update MM later.

LSE Data
===============
EP: CMG, NES, STCM, XLD
Focus : None

DT: None

BSE Data
==================
EP:

DT: None

Market Update 18 Feb 2008

MM is still flashing caution.

LSE Data
==================
DT candidate: Non e
EP: STBR, FUM, RED, LWB, BOR, NVE and OXN
Focus:
LWB - Earnings
NVE - Bid speculation
OXN - New product trail

BSE Data
============
EP Candidate
500356 -


DT Candidate
500253
500620
531739
532144
532670

Market Update 15 Feb 2008

From today I will be covering Bombay Stock Exchange data as well. I have added the market monitor for BSE in left column. As can been seen from the MM, market is still in RED eve though it has been rallying for last 3 days. MM might need tweaking for BSE a bit as the figures are bit on extreme side.

Here are today's candidates for various scans

DT for BSE

http://in.finance.yahoo.com/q?s=600470
http://in.finance.yahoo.com/q?s=532886
http://in.finance.yahoo.com/q?s=532832
http://in.finance.yahoo.com/q?s=532678
http://in.finance.yahoo.com/q?s=532619
http://in.finance.yahoo.com/q?s=530491
http://in.finance.yahoo.com/q?s=500238
http://in.finance.yahoo.com/q?s=500112

EP for BSE
None

DT for LSE
None.

EP for LSE
BES
CAO
CMG
NVE - Focus this one.
REDT
XLD

Indian stock market

I have managed to get hold of historic data for Bombay stock exchange dating back to 1987. I will be analysing the shares on BSE as well. I am looking for some more data for current month. Once I managed to get that in Amibroker, I will be creating MM for BSE as well.

On by the way, the data is available for free on internet compared to Rs. 11,000 for each year data charged by Bombay stock exchanges. So I have already saved Rs 220,000 to start with!

Market update 14 Feb 2008

Market has been moving up for last 3 days. If it can maintain the momentum, we may see things turning soon. It is still very volatile so trade with caution. It is good for intraday traders to make some buck! Long term traders, hold your horses and stay with cash. There might be a rally round the corner. Markets in Asia are rallying for last 3 days.

Dt candidate : BES, IMTE, OPM

EP Candidates: ANR, STL
Focus ANR. This came up few days back. New company and seems be doing very well. Up almost 60% in last 3 weeks. Rising platinum cost seems to be the catalyst and power crises in south africa is fuelling the growth. Seems a good buy on some weakness.

Market Update 13 Feb 2008

Market has slipped back into red. Bank and property shares lead the market down. There was ba news from B&B, which lost more than 20% of it share value today. Other bank followed in sympathy. Also the news that intrest rate may not go down quickly impact house builders.

DT Candiate:
AGLD - good volume, up on following news "Allied Gold has taken its first step in its transition from explorer to explorer/producer with the first gold pour at its Simberi Gold Project in Papua New Guinea. "
BES - penny stock

EP Candidate
AFCR, AGLD, ALBA, CMG, COH, DES, EPY, IDD

None of these looks good other than AGLD as mentioned above. Volume is up but not vey encoraging.

Common mistakes

After speaking to many people in last few months, I have realised that most of them make common mistakes when they start trading.

Here are few of them.

1. Sell when a stock is still going up.
2. Buy when a stock is going down thinking its cheap. They don't bother to investigate why it is going down. They keep the stock even if it lost more than 10%.
3. Most of them buy blue chips thinking they are safe bets.
4. They rely heavily on charts and fundamentals like P/E, EPS.
5. They buy because someone on a business news channel or in a news paper think it is good value.
   

Here is what they should be doing.

1. Hold the stock as long as it going up. Put a tracking stop loss of 7% from peak.
2. Sell if the value has dropped by 7% from your buying point.
3. Blue chips stocks may be good for reteriment where they give you 5 to 7% return in bull market. Explore new fast growing companies. There are the stocks which can give you 100% to 1600% return. Find couple of such stocks in a year and you can retire early.
4. Build your rules to filter the list of stocks you would like to buy and then use charts to support your decision.
5. If someone is recommending on a televison or news paper, it is already too late to buy. The stock may already have priced in the news. Do your research.
   

Stock picking is a beautiful art. Once you master it, you will be happy for your lifetime. Again these thing need time and effort. There is no such thing as free lunch.

Market update - 12 Feb 2008

Market did rally a bit on the Warren buffet news. Market monitor is still showing caution. Whether this rally will sustain, we will normally know in 4 to 5 days time.

There are no good candidates in EP and DT.

Market update - 11 Feb 2008

Market is still in red territory. It is sensible to be on sideline and preserve hard earned cash.

DT Candidate
ALD

EP Candidate
BIFF
FDI
OIL

Market Update - 07 Feb 2008

Last two days action has pulled market back into red. Lot of negative news are testing the confidence of the investors. Also earnings news are not helping either.

In bear market, momemtum based startegies like DT don't give great results. So better to sit on sideline with cash. You can make some money by shorting the stocks but I am no expert in that.

DT Candidates for knowledge purpose.
PLAA

EP Candidates
IVE
MRP
PTEC
VIY

Focus: PTEC

Episodic Pivots

All stocks which rally more than 100% have some episode at the start of each rally and also at the end of the rally. What we are looking for is to catch such stocks at the start of the rally. Episodic Pivots tries to scan for such stocks. Here is what is looks for

1. Stock which is up by more than 8% today on very high volume say 3 million.
2. These stocks should not be down by more than 25% in last 3 months.
3. Volume up by 300% over average volume.
4. Once you have the list, look for a positive news for the stocks in above universe.

Whether the news in step 4 will cause the stock to rally, this judgement comes with experience. A good practise would be look at the stocks that have rally between 200% to 400% to see what caused the move.

I will be posting the EP candidate list along with Double Trouble in daily market update.

Market Update - 05th Feb 2008

Market is back in red. I am on sidelines since December. I am using this time to learn another principle of stock picking. It is called Episodic Pivots. I will write about that in my next post.

Double Trouble candidates for today

GME.L - Penny stock, not a huge volume. Ignore.
MAMA.L - same as above
PLAA.L - Minning stock, probably up as Platinum prices are going up. Good volume. Keep an eye. Might be a good buy on weekness.

Market Update - 04 Feb

Market has been rallying for last few days but the ratio's are still cautious. There are new stocks breaking out. From old leaders, miners are still doing pretty well.

DT Candidate
GNG.L - This stock has been on decline recently. I will wait for few days to see if the rally continues. However as there is not much financial data, this might be a risky bet.

Back in action

After being on longest holiday ever, I am back. I will be back filling the market monitor for last month but just a quick update on market, we may see a rally starting today. If today's rally continues into next week, we may see the ratios in MM turning green.