Impact on GDP levels vs Oil Prices

Hammer PSMC. Trend Change?

Oil Prices Needed To Balance National Budgets (Graph)

Bruce Lee - Motivation Speech

The principles apply when trader is trading in the markets, very wise words which can be related to one's trading strategy.

PAEL Chart 29th September 2014

This is the daily chart of PAEL. The script has made a high of 34.39 on 05/09/14 and right now the price of the script stands at 26.41 which is a difference of  7.98 rupees. it has broken the support of rising wedge, current correction on fibonacci recognition stands at -111%, RSI of 32.21, volatility of -18.74, momentum of -4.05, MFI 11.53. The last support from the last bull run stands at 26 which if broken will lead to the support levels of 24 to 24.40. 

No one can predict when will it take a bottom and start to resume its bullish run again because in trading you will never know the bottom price of a script, but an investor would buy this script right now because he/she will know the potential of this script in long term. 

All the technical indicators suggests right now to jump in this script when everyone is selling this script in panic, which means a risk to the buyer, but high risk means high return and only those will win who will take high risk in it.  

SHEL 25th September 2014 Chart

I think the resistance of 300 is too much of a asking for this script. This was second attempt to cross 300 since the fall from 360. 

PSO Chart 23th Sep 2014

Current price of the script is 368.18. Today movement has inched closer to the breakout of 373.76 on falling wedge. The breakout should be achieved with higher volumes or else it would not sustain the breakout. If it is achieved, the script has to close the window from 372-382.

Berger Paints 18th September 2014

The 18th September chart of berger looks like a evening star pattern which is bearish in nature. There is also increase in volumes from 16th september with highest volumes on 18th september. 

The Market Is Never Wrong

Steve Nison on "market is never wrong"

"One of my non candlestick seminars is called the "Techniques of Disciplined Trading Using Technical Analysis." In it, I discuss the importance of a disciplined approach to trading. To convey this idea, I use the word "discipline" as an anagram. For each letter of the word DISCIPLINE I offer a trading rule. For the letter N my rule is "Never trade in the belief the market is wrong.

What do I mean by the expression, "the market is never wrong?" It means do not try to impose your beliefs on the market. For example, if you are firmly convinced crude oil is going to rally, wait until the trend is heading north before buying. Say crude oil is in a bear market. If you buy in the expectation that a bull market will materialize, you are then trying to impose your hopes and expectations on the market. You are fighting the trend. This could be disastrous. You may ultimately be correct in your bullish viewpoint, but by then it may be too late.

As an analogy, imagine you are driving along a one-way street. You notice a steamroller going down this one-way street the wrong way. You stop your car, take out a sign (that you always carry with you) that reads, "Stop, Wrong Way!" and hold it in front of the steamroller. You know the steamroller is going in the wrong direction. But the driver may not see you in time. By the time the steamroller turns around, it could be too late. By then you may be part of the pavement.

So it is with the markets. If you are bucking the trend, your outlook may turn out to be correct. But by then it may be too late. Margin calls in futures may force you out of the position before your expected move occurs. Or, worse, in the end, you may be right, but by then you could be broke.

Do not try to impose your will on the markets. Be a trend follower, not a trend predictor. If you are bullish, jump onto up trends, if bearish, hop onto downtrends. one of the Japanese books I had translated expresses this idea almost poetically, "buying or selling from the beginning without knowing the character of the market is the same nonsense as a literary man talking about weapons. When faced with a large bull or bear market they are sure to lose the castle; what seems safe is infinitely dangerous. . . . Waiting for just the right moment is virtuous and essential."

Importance of Number three in Technical Analysis

The following is a quote from John Murphy's book Technical Analysis of the Futures Markets:

"It's interesting to note how often the number three shows up in the study of technical analysis and the important role it plays in so many technical approaches. For example, the fan principle uses three lines; major bull and bear markets have three phases (Dow theory and Elliott Wave Theory); there are three kinds of gaps some of the more commonly known reversal patterns, such as the triple top and the head and shoulders, have three prominent peaks; there are three different classifications of trend

(major, secondary, and minor) and three trend directions (up, down, and sideways); among the generally accepted continuation patterns, there are three types of triangles-the symmetrical, ascending, and descending; there are three principle sources of information-price, volume and open interest. For whatever the reason, the number three plays a very prominent role throughout the entire field of technical analysis."

PNSC Chart 12th September 2014

"Hanging man" is a bearish candlestick which can be significant trend reversal. An ideal hanging man would have a short real body with long lower shadow and no or very little upper shadow. A major resistance lies ahead for pnsc. A number of times in past, the script tried to cross the value of 78 which it failed multiple times. if it breaks the resistance of 78 this time with a staying above it, it will become a support level for it, otherwise caution should be exercised. 

Attock Refinery Double Bottom Formation?

Double bottom formation in artl? Confirmation will be supported if the market opens on monday and the support line of 184.50 is not broken which will create a double bottom in atrl. the resistance of 197 if broken will create a breakout for successful completion of the pattern. 

PSO Chart 03rd september 2014

Penetration of more than 50% of dark cloud cover into White body of yesterday. Volumes also increased, suggesting a buying blow off. Today's the chart opened up above the resistance level of 387 but could not maintain it. if, close above the high of today's dark cloud cover, would be considered another bullish rally, otherwise it would be a trend reversal and high of dark cloud cover would be a top.   

Thoughts about -4.5% drop

The karachi stock exchange today crossed a crucial resistance level of 29200. I look back on the day, 11th August 2014, when market just took a plunge into 4.5% drop due to the political crises. a lot of people just sold their stocks expecting a major crash in the market, all fearing the 2008/2009 financial crash to happen anytime soon and very much the things were looking that way too. Everyone just wanted to get out of the market and invest in something which will keep their investment safe. I myself got out of the stocks in july and august as well due to the fears of financial crash but if we look today, the market is standing right there where it took a drop on 11th august, this is the beauty of this market, creates fear, takes everything you have, and makes you regret about it. 

so why is the market is so much stronger now, not what it used to be. I personally think, the foreign participation in the market has really made it a stronger place. the market is no more in control of big fishes who when got panicked, sold their stocks, and individuals started to follow the herd. This market is not what it used to be in 2008 anymore. The net buy/(sell) by FIPI since last june in karachi stock market has been $404,803,388. This is hefty amount of buying that foreigners have done since nawaz sharif government came into power. 

The stock market will take future plunges like these, may be tomorrow, next month, or next year but only people who are in the market just for the sake of investment, will benefit from it. Gone are those days when one would make enough money in day trading. international corporations are now hiring quats into their organisations who comes up with algorithmic trading systems to perform high frequency trading. only a few good day traders can beat them. God knows when they will be coming to Karachi stock exchange, so the best option right now would be to buy good blue chips stocks and hold them at least for 3 months. 

where's kse 100 index moving 02th september 2014

where's kse100 index moving? 1st September 2014

Technically the market should bounce back because double bottoms have also been created on 12th August 2014 and 28th August 2014. Having said that, any disturbance to the investor confidence will result in the chart dated 27th August 2014.  

where's kse 100 index moving? 28th August 2014

Hammer was created on 28th August 2014 which suggest that we might be seeing the bottom of current bearish trend but confirmation will be needed on 29th August 2014.  

wheres kse 100 index moving?

Political Uncertainty and Karachi Stock Exchange

In most developed nations, the markets tend to move with the economic conditions and how well the economy of a particular country is doing but in a developing countries like Pakistan, elements of political and religious factors also influence the markets as much as the economic factors. The ongoing political situation in Pakistan is no different. The karachi stock exchange has shed more than 1700 points from its top of 30639 to close at 28917 on friday 15th August 2014. The sentiments of alot of investors are negative regarding the government handling of the crises but in this current situation, one should remind themselves that fear and panic are two different things, while fear is healthy for the market, panic is deadly. A lot of people would remember when qadri set the stage during ppp time in Islamabad. In a single day, the market lost more than 500 points and only smart investors bought those shares and rest is history. The current on going uncertainty is definitely a very good buying opportunity for everyone. The shares of blue chip companies will get more cheaper and buying them in this current political uncertainty would be the best investment for ages.  

Portfolio Returns vs KSE-100 Index 13th June 2014

week ending	pf %gain/loss	% kse100
21-Mar
28-Mar	-1.2%	1.3%
04-Apr	3.7%	4.8%
11-Apr	5.9%	3.0%
18-Apr	-1.5%	-0.6%
25-Apr	-0.8%	-0.8%
02-May	-1.0%	0.2%
09-May	-0.2%	-1.5%
16-May	5.5%	1.4%
23-May	1.8%	-0.4%
30-May	2.8%	3.4%
06-Jun	-2.1%	-0.8%
13-Jun	4.7%	0.7%

Portfolio on 13th June 2014

sector	Share	pf %
Beverages	mureb	0.85%
Construction & Material	luck	0.85%
Personal goods	gadt	1.71%
Electricity	kel	25.64%
Construction & Material	akzo	1.71%
General Industries	cppl	4.27%
Pharma & Biotech	iblhl	4.27%
Automobile & Parts	gtyr	4.27%
Oil & Gas	pso	4.27%
Personal goods	nml	4.27%
Personal goods	srvi	0.85%
Foods Producers	efoods	4.27%
Forestry	cepb	25.64%
Chemicals	efert	4.27%
Indus transportation	pnsc	4.27%
Household Goods	tgl	4.27%
technology Hardware	avn	4.27%

Sold 33.3% of gadt on 35% gains

Sold 45.45% kel on 20.39% gains

bought Services industries, reducing gadt. 

Murree Brewery Chart on 21th may 2014

Portfolio on 20th May 2014

Sector	Share	Pf %
Construction & Material	Luck	0.70%
Indus transportation	Pnsc	3.52%
Personal goods	Gadt	2.11%
General Industries	Cppl	3.52%
Forestry	Cepb	21.13%
Chemicals	Efert	3.52%
Oil & Gas	Pso	3.52%
Foods Producers	Efoods	3.52%
Automobile & Parts	Gtyr	3.52%
Household Goods	Tgl	3.52%
Technology Hardware	Avn	3.52%
Beverages	Mureb	0.70%
Pharma & Biotech	Iblhl	3.52%
Electricity	Kel	38.73%
Construction & Material	Akzo	1.41%
Personal goods	Nml	3.52%

Sold hum networks on 30.8% gains and 50% of mureb on 32.60% gains. 

Foreign Investment & Portfolio

The first day of the week has been very dull with low volumes. The Imran Khan saga finally finished in Islamabad where he protested against the rigging in the elections and further said that he would continue to protest in different cities until and unless his demands are met. this has created a kind of political bubble in the making where the incumbent government need to resolve the issue as soon as they can.

This week the monetary policy will be announced as well, other reason for low volumes. whether the government maintains the status quo or cuts the rate by 50 or 100 basis points will be closely watched by the investors and decide the future on how locals invest in the market but at the same time the foreigners individuals and institutions are buying at every opportunity. the figures below represents the net buying and selling of foreigners since the start of 2014 and movement of kse 100 during those months.

	fipi	kse 100
Jan-14	31,790,699	1288			rates in $
Feb-14	9,522,581	-1108
Mar-14	-5,202,632	1133
Apr-14	91,863,206	1244
till 12th may	22,245,528	577.25

Positive news from IMF and other organizations is helping KSE to attract foreign investment but the question would be whether they would continue to invest in Pakistan since a lot of other markets at the moment are offering quite good returns. 

sold pkgs on 10% gain, was going to buy treet corp in the range of 106-110 but it got upper capped, will wait for it to come down to buy in that range. bought IBL Healthcare, a subsidiary of searle company. Cherat packaging looks interesting and will buy it on wednesday by selling Hum network shares on last day of its spot. 

Treet Corporation & Berger Paints

I have been looking at some stock recently to add them into the portfolio. One of them is treet corporation. last year in August it made a high of 294.87 from 69 in june but then it ended up in the range of 100-130, right now the price is ranging between 100-110. looking at the results, the march results shows that the company has been doing good business. the sales growth of the company stands at 21.39% which is good. hoping to buy it the range of 100-106. It is also a good alternative to its more expensive competitor Gillette Pakistan.

Another company that i have been looking at is berger paints. Alot of investors are showing interest in this company because during summers, the paints business kicks off to a good start and people are optimistic about its june results, expect it to be good but looking at its chart and previous eps, the company has so far failed to bring that charm. The price is currently moving between 50-56 but recently broke the support of 50 and is at 49-50 range now. i am interested in buying this script between 40-45 because then a lot of people who have bought this stock between 50-60 will sideline and it would be good to buy at bottom.

I will selling pkgs on 10% gain and buy treet corporation while will wait for berger to come down to 40-45 range and buy that.

treet 3rd quarter statement
http://www.treetonline.com/Reports/2013-2014/Final_March_2014.pdf

berger 3rd quarter statement
http://berger.com.pk/aboutcompany/annualreport/2014/Berger-3Q-Mar-14.pdf

Jim Rogers: 'If artificial ocean of liquidity starts drying up, we're al...

one of the greatest investors of all time. really informative and every investor should watch this interview.

Discount Rate announcement and karachi stock exchange

The government will announce the monetary policy by mid may. everyone was expecting the discount rate to fall by 100 basis points to 9% from current 10% but the inflation numbers really ruined the party. The inflation figures for may stood at 9.18% from 8.53% in april which means that investors at karachi stock exchange will expect no change or only 50 basis points decrease in the discount rate. the sentiments in the market have reduced sharply and since friday the market has lost around 536 points.

Politically, Imran khan is staging a protest on 11th may to mark the one year of elections as rigged, along with IK, tahir ul qadri is also supporting his stance which means the capital of Islamabad is hoping for a big day.

Both of these events are very important which will further guide the market. right now i am fully invested in the market because after a short correction, i was expecting the inflation numbers to be somewhere between 8.23% to 8.75% due to which i bought when the market took correction from the high of 29458.15 but right now the kse 100 index is at 28383.20 and a major support of 28500 has been broken. the next support stands around 28000 which would be very crucial level.


current portfolio

i bought luck and pnsc in previous rallies and sold almost all of my holdings of lucky cement but have not sold pnsc yet. bought gadoon textiles on the announcement of government to impose 5% duty on yarn imports and this stock will benefit from it in coming months. 

i bought hum network after it became x. the stock has recently started to move due to good results and will try to sell it in chunks above 100. bought century papers before its results, was expecting good results from them but they did disappointed but can hope it will move somewhere after budget. 

engro fertilizer has a great potential, it is going down due to market correction, otherwise the result was good. i bought pso in previous rally at 325 and sold it had 420 after its phenomenal march results, went all the way to 456.99. bought it again  because it was good to buy after losing more than 50 rupees but the recent circular debt crises have put it in spot light and the management of the company has asked help from government to help it clear the bills which it has to pay to its international suppliers. . 

last year, i made a heavy loss in efoods. it was around 70, i bought it at 72 and sold it around 75 but then it skyrocketed to all time high of 160 i think. sometimes as a human, its really hard to control your emotions so i got greedy and jumped into at 154. well it fell badly and sold all my holdings around 120. at that time, its results were very bad due to distribution issues. i have again bought it because its march results were ok and i expect the ramadan effect will definitely boost its profits.

 i bought avn and tgl before results and oh well the results of both these companies were terrible and having continuous lower locks. i have no idea whether to sell them or wait. bought general tyres on someone advise and recent pakistani rupee appreciation means more people buying cars and it will have positive effect on it during its june results. 

bought akzo, pkgs, and mureb in small chunks. all three companies have the potential to produce good results during june.