TELCO: Out of GAS ??

Seems to have done C=A A: 138-208 = 70 pts B: 208-176 = 32 pts C: 176-246 = 70 pts Running into Long Term RES Zone : 250-254 SMO_SAR VERDICT: no SHORTS yet... SMO VIEW : SHort via 250PE is Worth the RISK ;-) cheers

Nifty : Lone wolf wid tail UP !

Upmove losing steam.. but NO SIGN of TRIGGER on SMO SAR !

L&T: Final swansong before the Feb fall !

All in the chart !

SMO SAR Trigger: Short COAL INDIA

C1: close below 5DLEMA on 24th Jan'12 C2: 5DEMA-10DEMA -ve X-over on 31st Jan'12 Analysis: Short Feb CIL via Futurz or PE , SL: 5DHEMA+0.1% Tgts: 316-319 / 295 !

cheers

SMO SAR for Alstom : for Feb'12

SMO SAR : ALSTOM 1. 25/01/12 : Trigger 1 - Price closes below 5DLEMA 2. 27/01/12 : Trigger 2 - 5DEMA BEARISH x-over BELOW 10DEMA TRIGGERED THE SHORT TRADE @ 362 in SPOT ANALYSIS: 5DEMA is Showing -ve slope. Carry Shorts, with SL @ 5DHEMA + 0.1%

A li'l hint For Waqx :-) 1. Find the parabolic curve y=ax2 + bx +c , for the following 5 pts (1, 375.3) , (2, 372.3), (3, 366.3) , (4, 355.1) , (5, 349.2) 2. Use Funda of Least Squares REGRESSION (Maths 101) And Tell me wot u see :-) cheers

DLF on RED ALERT : 31st Jan'12

condition 1 done waiting for the TRIGGER

:-)

RED ALERT - COAL INDIA: 31st jan'12

All in the chart.. Close EOD below 334 will TRIGGER A SHORT AS PER SMO_SAR cheers SMO

ALSTOM : 31st Jan'12

SMO SAR TRADE TRIGGER: Condition 1: Price close <5DLEMA (already mentioned in prev post on 25th Jan'12) Condition 2: 5DEMA has gone BELOW 10DEMA ( on 27th Jan'12) ENTRY on 27th Jan'12: Gone short @ 362 SL: 5DHEMA +0.1% = 380 CMP on 30th Jan'12 : 333 GAIN IN TRADE : 29 pts Where to exit trade? 1. when dy/dx of 5DEMA changes SIGN ; or 2. Buy back @ SUPPORT ZONES : 315-322 (in spot) cheers SMO

Important to Honour the Trigger Sequence!

This post is a result of a gr8 Q from my buddy YG... The Q: Why shud we worry about price closing above 5DHEMA or below 5DLEMA . If 5-10DEMA x-over happens, then the prev condition is a given , isnt it ? Ans: The veracity of the query is indeed honourable in case where we have a SUDDEN FALL after a NARROW RANGE OF CORRECTIVE Waves. In such a case 5-10DEMA x-over will happen before price closes above or below 5DHEMA or 5DLEMA But, but... In CORRECTIVES.. we can have many instances, where the same NARROW RANGE MOVES via Wave B, cause 5-10DEMA x-overs first, close BELOW 5DLEMA , but only to WHIPSAW up via wave C & SL out the trade As a case in point, have attached the chart for BIOCON.. pls see it in detail. I have left many many things for all of of u to ponder on.. each STOCK has its own QUIRK, its own distinct IDENTITY (based on how QUICKLY, or SLOWLY it moves from IMPULSES to CORRECTIVES & back). If u can find, wot i hope u will find, this one is a GOLDMINE in the making :-) cheers SMO

Outlook for Nifty ji_30th jan'12

Some obsv for rumination :-
1. We have moved up close to 700 pts in 3weeks from 4532. This is highest rise since that 770 pts rise from 5177 to 5944 in Feb-Mar'11!
2. Weekly Close is BULLISH & 5WEMA-10WEMA x-over has occured.
3. Daily Charts also suggest Bullish Trend INTACT, with price closing above 5DHEMA

4. The LTF UTL (green) comes in @ 5248
5. The Short term UTL @ 5233 . Will it resist?
6. Daily Candles have formed a HANGING MAN PATTERN on EOD (bearish reversal on STF) ?? Needs price confirmation tomorrow

SMO SAR:
Long Trade triggered @ 4706 on 3rd Jan'12 has made 500 pts!!

As per the Rule for EXITS: One can still hold longs until the pt where the (dy/dx) of the 5DEMA changes sign.

Lets wait to see if we get that INFLECTION PT TOMORROW.

2. Pls NOTE, this is not an INVITATION TO SHORT. Short only when our 2 ENTRY TRIGGERS are met (close below 5DLEMA & 5-10EMA BEAR X-over).

Rule for the Markets:

PREDICT .. WE PERISH, FOLLOW.. WE FLOURISH !

cheers
SMO

DLF on weekly charts _wk ending 27th Jan 12

There are similarities to the way DLF is moving now & to how it was moving in July 2011

1. On weekly close basis , taking support @ 20W SMA
2. 5WEMA shows INTENT to BULLISH x-over the 10WEMA
3. Price close is just below 5W-HiEMA, next no BUY TRIGGER YET
4. Price @ Middle of Weekly BBs
4. Weekly price has hit the Weekly PSAR RESISTANCES (implying UPTREND)

Now, pls see what happened to DLF in July 11. I expect the same in Feb'12.
DLF is on the last leg of UPSWING & ALL RISES next week should be use to ENTER SHORTS via FEB PEs

WARNING: Trigger for shorts should be on DAILY CHARTS SMO SAR basis.

SMO SAR for DLF

Whenever there is a trend, SMO_SAR works like a dream!

See for urself :-)

SMO SAR - Different entry & exit pts

Hinged on the fundamental query from Jeevan ji, is the reason for SMO SAR to exist!


G1 ji points out that, if we wait for a close above 5DHEMA or below 5DLEMA & then further wait for 5-10DEMA x-over, then we end up lose a few pts, to LATE ENTRY!

I SAY YES , HE IS ABSOLUTELY CORRECT. But SMO SAR is designed to catch W3 or Wave C, so the LATE ENTRY is more than COMPENSATED for by ACCURACY !!!

My whole aim when I came out wid the SMO SAR Algo was the following:-
1. Trading Efficiency: I.e Minimum Trades, min whipsaws, & min Re-ENTRIES after SL
2. Maximising Gain

Q: Y so?
Ans: As I cannot trade INTRADAY EEVRYDAY (due to office pressures), SMO SAR was designed for SWING TRADES (where i can quickly sneak a peek @ the market during lunch time, breaks , so on & so forth)!


SMO SAR derives inspiration from Illango ji's JNSAR. His system proposes thus:
1. When Price closes above 5 LEMA : BUY on DIPS , SL : 5DLEMA-0.1%,
2. When Price closes above 5 HEMA : BUY & HOLD , SL : 5DLEMA-0.1%
3. When Price closes BELOW 5 HEMA : SELL on RISE, SL : 5DHEMA+0.1%
3. When Price closes BELOW 5 LEMA : SELL & HOLD, SL : 5DHEMA+0.1%

Exit: When price either hits JNSAR or 10EMA

These 4 rules of JNSAR are fantastic in their own right, BUT...
BUT,
1. Trades require minute by minute observation, since one can get SLed out, due to whipsaws!
2.Trader has be vigilantly tracking 5Hi & 5Lo EMA & trend to Re-Enter every 15 mins. Else he will get confused on what position to take ?

SUMMARY:
The JNSAR system works fantastically well for the FULL TIME TRADER
For a SWING TRADER, who places a PREMIUM on ACCURACY of TREND, the SMO SAR scores
because:
1. It catches the BIGGEST in each T/F : ie Wave C or Wave 3
2. It filters out WHIPSAWS of Minute Degree (by the 5-10DEMA x-over)
3. Allows one to trail the TREND right up to the very end (exit when change in SIGN of SLOPE (dy/dx) of the 5EMA curve)

!Q: Which system should you use for trade??
!Ans: Ur choice to make , my friend. In the price Battle, a warrior should chooses a weapon to suit his "technique" , "ability" & "mentality" :-)

cheers
SMO

Salute u Mother- a sincere son!

As I got up today morning & opened the newspaper, the headlines screamed "ISRO Mess on Display "! "God, pls spare India the pain atleast on this day , Cant we have anything worth cheering about in these Godforsaken times ? " I asked myself.

In the background, the TV commentators were lambasting a listless Indian Cricket team on its way to a 4th straight defeat to Australia Down Under. My frustrations were rising by the minute. "Some Republic Day this, even our multi-millionaire cricket gods dont have the spine on this day to give it a fight!"

And then, like a small sun peeking thru the clouds, a young Virat Kohli weathered the Aussie pace storm & battled mental deamons on the way to a fine Test 100, a goal that has eluded his more decorated team-mate, the exemplary Sachin Tendulkar thus far.

Immediately my mood lifted, the dark grumpiness melted away like a departing mist, on seeing the cheerful celebration of a fine young batsman in the making.

And this was the Eureka moment !

It did not matter, if we won or lost. What matters is that we try, & keep trying to be better, stronger & tougher every single waking moment, with sincerity.

On 26th Jan , our Republic Day, what India needs is for its sons & daughters to adopt this dictum. In these bold new times, the opportunities are like Never Before.
All we now need is inspiration, righteous thought,fine morals & a steely resolve to go and take what is ours for the taking.

Often times, i hear ppl say " Is desh ka kuch nahi ho sakta, everyone is self-centred & corruption is rife because Indians as a ppl look for Short-cuts to success"! Basic amenities are missing, our politics has fallen into the hands of goons, the dream of RAM RAJYA is a fading distant memmory...

While the words cannot be denied, how long can we live with negativity ??

I personally feel that our potential is undeniable!

India is a Giant in slumber, one spark , one inspired leader is all it takes to set the Juggernaut rolling. We are all a MINI INDIA within ourselves. The spark is within ourselves. Let us take a pledge to be responsible leaders of our own selves.

On this Republic day, let us pledge to be exceptional ppl @ our personal level.

Let us be excellent & purposeful in our each & every action. Before we finalise glossy business deals, let us keep the nation ahead of personal aspiration.
Am I doing something against my people, against my nation ? Self Regulate your way out of the present enviroment. Earn your living the honest way through hard work & talent, not @ the expense of national misery. Have a vision, dream to see a beautiful INDIA with clean roads, smooth trains, prosperous scoiety, disciplined & righteous in thought & spirit. Do this & I am sure we shall soon see a new vibrant India, a nation that will be respected in the world for being a role model.

Let us pledge to stop bribing our way out of trouble. Let us work for social welfare & upliftment of the poor. Let us lead by example & be the best that we can ever be.

With this sincere prayer to the Almighty, I humbly request him to bless my INDIA, and make her the super-power that she was meant to be be in this 21st century !

Wish u all a very Happy Republic Day!

cheers

SMO SAR for Bharti Airtel

Bharti is a stock for which SMO_SAR does NOT yield 100% tracking.
Reason:
Heavy MANIPULATIONS, cause the price to go into LONG PERIODS of CORRECTIVES.
And, as is the weakness of any Trend Following System, wen there is NO UNIDIRECTIONAL TREND (in correctives), wot will one FOLLOW ?? :-)

Nevertheless..for its applicability to C waves, i present this here

cheers

SMO SAR for ALSTOM

Magic of the SAR sysstem was on display for many stocks in jan'12

Alstom gave a 73 pts (or 28% ) run-up in 14 days !!

cheers
SMO

SMO SAR for Nifty ji

Nifty witnessed a PARABOLIC rise today. 5DLEMA has gone way above the Longer 10DEMA

The Long trade has delivered 5140-4740 = 400 pts !!!

Further upside does exist (since we may be in an EXPANDED FLAT) as:
A: 4639 -5100 = 460 pts
B: 5100 -4532 = 570 pts
C: 4532 -5127** in play shud do min 1.618xA = 740 pts = 5272
Within the C,
we may have finished the 3rd wave as:
C.1 : 4532 - 4801
C.2 : 4801 - 4588
C.3 : 4588 - 5141

If indeed C.3 is over, we shall head lower to ruffly 38.2%x550 = 220 pts lower to 4920

Resistances for ST: 5170 - 5195 -5210

Pls note SMO SAR does not INDICATE any DOWN TREND for now !!

cheers
SMO

SMO_SAR for COAL INDIA

COAL has today closed below the 5D-LEma.

Remember the 2 conditions to initiate shorts:-
1. Price close below LEma
2. 5DEMA-10DEMA x-over

Condition 1 has been satisfied today. If we see 5-10DEMA BEARISH x-over tomo, my reco wud be to pls go ahead & short COAL FEB futurz

Tgts: T1: 316 , T2: 296

SL : 5DHEMA + 0.1%

cheers
SMO

Finer Pts to identify "variations in trend"

Wish to share some obsvs wid u regd 5-10DEMA & 20DSMA

1. Wen 5-10DEMA x-over happens close to 20DSMA (within 1-2 days of takin out 20DSMA), the Trend is generally established UNIDIRECTIONALLY

2. Wen 5-10DEMA x-over happens afar from 20DSMA, We should trail the position till 5DEMA changes direction

3. Wen 5DLEMA x-overs above 9EMA , it is ESTABLISHED that we are in a HIGHER DEGREE IMPULSE

4. Wen 5DLEMA x-overs above 9EMA, one need NOT book profits on change of sign of 5EMA . Instead one sud trail wid SL @ 5DLEMA-10 pts..

Need to use x-over smartly & aptly for that particular market condition.

For eg- as on today, 5DLEMA has gone UP over the 9DEMA & that suggests,
the move has become HIGHLY PARABOLIC & nearing COMPLETION

Take a look pls

rgds
SMO

Identifying Trailing SLs for SMO_SAR !!

MATHS 101 for choosing TRailing SL for SMO_SAR v.1.0 :-)

say we have a approx eq for CLOSE PRICES as y=2X^2 in an IMPULSE

y(1) = 2
y(2) = 8
y(3) = 18

@ x=1, dy/dx D1y = 2 & d^2y/dx^2 i.e D2y not defined
@ x=2,
D1y = (y2-y1)/ (x2-x1) = 8-2 /1 = 6
D2y = change in D1y i.e = D1y(@x=2)-D1y(x=1)/x2-x1
= 6-2/1 = 4
@ x=3,
D1y = 18-8/3-2 = 10
D2y = 10-6 =4

So ur absolutely right D2y (2nd order differential is constant for a Quad Eq)

Do keep an eye on the Dy/dx though!!!

For a parabolic price rise, dy/dx is supposed to increase in the DIRECTION OF TREND.
This is wot drives 5DEMA in 1 direction during TRENDS :-)

And our aim is to IDENTIFY Wave A or 1& then use this APRIORI info to catch & ride Wave C or W3-W4-5, wotever the case may be on HIGHER DEGREE :-)))

More on this over the next 2 days !

Another guide on where we can book out profits is
from Ew angle,
Cmin =0.618xA & W3min =W1x1.382xw1

So , we can book part profits @ these levels & then put a HARD SL here & trail the balance positions :-)


cheers
SMO

SMO_SAR.ver.1.0

SHRI RAMCHANDRA JI KI JAI !!

SMO_SAR v.1.0

1. A simple SAR Version based on 5EMA , 10EMA (can use 9EMA also), 5LEMA & 5HEMA
2. Applicable to ANY Time Frame (Hourly, Daily, Weekly, Monthly)
3. Algo is explained in attached IMAGE

Note:
THIS IS MY VERY FIRST ATTEMPT @ TREND FOLLOWING ALGOs, so KEEPING IT SIMPLE.

As I develop a FEEL for the CONCEPT of EMAs , I will work on HIGHER VERSIONS of this BASIC ALGO.

A few amazing ideas are floating in my mind & i wud luv to share them here wid u.
We can incorporate concepts of
1. Rate of Change (dy/dx)
2. GANN's SQ. of 9s ; & (The Best fit Parabolic Quad Regression Line)
3. Concept of Local / Global Maxima to Find PERFECT EXIT PTS (derived from Image processing & 2D geometry theory )


JAI GANESH DEVA, APULI KRUPA DRUSHTI MAHJAVAR ASHI CH ASUN DET, HI NAMRA VINANTI!

cheers
SMO

MODIFIED SAR SYSTEM FOR Nifty ji

SMO_SAR SYSTEM

SMOs NIFTY TRADING SYSTEM
inspired by Shri. Illango's JNSAR , GANN's Sq of 9s & Murphy 5-9EMA System

STEP I Data Acquisition Prev 5 DAYS
High, Low & Close
STEP II Data Processing:
1 Calculate 5DHEma
2 Calculate 5DLEma
3 Calculate 5DCEma
STEP III Mathematical Modelling:
1 Find the Parabolic Regression Eq. of Best fit for the 5DCEma pts
2 Update the Equation with the Last 5EMA pt every day
3 Thus @ any pt in time , we have a Curve with y=a*X^2 + b*X + C
4 Calculate the SLOPE of the Curve (dy/dx)
5 Calculate the Rate of Change of Slope 2nd Degree Differential (d^2y/dX^2)
STEP III Trade Entry / Trigger :
1 Start from any OUTLIER PT (price close above DHEMA or Below DLEMA)
2 Suppose we Start from Pt A @ 5100 on 07th Dec'11
3 Price Closed Below DLEma on 9th Dec'11 & 5-9 DEMA -ve Murphy Cross Over was seen. TRIGGERED A SELL !

4 Say we SELL @ Day Close i.e 4857
STEP IV Trade Analysis:
1 As per Illango ji's System, we carry SHORT positions as long as price closes below DHEma. So we track the price every day @ close
2 @ Next day , we carry SHORTS if ALL THE BELOW CONDITIONS are satisfied :
i Price closes BELOW DHEma
ii @ Next Day, near closing say @ 3:00pm, RECALCULATE the CURVE by ADDING that Days EXPECTED CLOSE & Remove OLDEST Price Data(5Day OLD)
iii Calculate SLOPE OF CURVE dy/dxi.e 1Dy
Calculate RATE OF CHANGE OF SLOPE i.e & 2nd DEGREE DIFFERENTIAL( d^2y/dx^2) i.e 2Dy
iv If 1Dy MAINTAIN its SIGN i.e is -ve, check 2Dy if +ve or =0, CARRY SHORTS
If 1Dy MAINTAIN its SIGN i.e is -ve, check 2Dy if -ve, WARNING IMPENDING REVERSAL

V If 1Dy CHANGES its SIGN i.e is becomes +ve, irrespective of 2Dy , COVER SHORTS (Book Profits)
This pt B , appears on 21st Dec'11 .. Close price is 4693

RESULT: NET GAIN IN TRADE : 164 pts

SAME SYSTEM CAN BE REPLICATED FOR A BULL CASE!!!
The attached image is for a BEAR CASE .

Pls note, we can FORTIFY THIS ALGO EVEN FURTHER with PSAR & EW & FIBBO & TLs !!!

DRAWBACKS OF THIS MODEL : (i) One IMEMDIATE DRAW BACK is the MODEL works with MODERATE VOLATILITY ONLY. It wont work on 10% UPPER or LOWER CKT DAYS!!
(ii) Scratchin my head for any other lacuna :-P


All Maths enthu guys , pls read this ALGO & pt out flaws if any or IMPROVEMENTS.
I will shortly model this in EXCEL or try and write a Quick Code for Auto Trade trigger Simulation (as & wen time permits, hope this weekend)

INSHAH ALLAH , WE SHALL HAVE EXCITING TRADING DAYS AHEAD !!

cheers
SMO

EW for nifty ji

Have loaded 2 images
Higher Degree wave count & the STF count:-
1. At LTF , we may be in a 2nd ABC of a DZZ from 6339

2. At STF, We may have completed one set of ABC as a ZZ
This may be a corrective to the move 5400-4532 (in which case it wud be a B wave)
Lets c, lables r evloving for now

rgds