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Beyond Technical Analysis

LEARN THE ART OF READING NEWSHow to Read News with the Stock Market: A Trader’s Playbook For traders, the stock market is a battlefield where news can make or break your strategy. Headlines can send prices soaring or crashing in an instant. The key to trading successfully lies in not just knowing the news but understanding how to act on it. Here’s a playbook designed specifically for traders on how to read and use news to your advantage. ---------------------------------------------------------------------------------------------------------------------- Why News is Crucial for Traders News is the fuel that drives market sentiment, and market sentiment drives price action. Whether you're a scalper, day trader, or swing trader, understanding news is vital because: - It Creates Volatility: News events like earnings, policy changes, or geopolitical tensions can lead to sharp price movements. - It Shapes Trends: Long-term economic updates or sector-specific developments influence trends. - It Signals Market Sentiment: Positive or negative news often reflects the collective emotion of the market, creating opportunities for traders who can read between the lines. ---------------------------------------------------------------------------------------------------------------------- Types of News That Matter to Traders 1. Market-Wide News: - Economic Indicators: Interest rates, GDP growth, unemployment, and inflation reports set the tone for the broader market. - Central Bank Policies: Announcements by the Federal Reserve, ECB, or RBI heavily impact currencies, indices, and commodities. 2. Stock-Specific News: - Earnings Reports: Surprises in revenue or profits can send a stock flying or tanking. - Corporate Actions: Mergers, acquisitions, stock splits, or dividend announcements create price spikes. 3. Sector-Specific News: - Policy Changes: Subsidies, taxes, or bans on products can drive or hinder entire industries. - Innovations: A new breakthrough in AI, EVs, or renewable energy can lift related stocks. 4. Global and Political News: - Geopolitical tensions, trade agreements, or natural disasters often create ripple effects across global markets. ---------------------------------------------------------------------------------------------------------------------- How to Analyze News as a Trader 1. Focus on the Impactful Headlines: Not all news moves the market. Prioritize: - Breaking News: Events causing immediate reactions, like earnings beats or major geopolitical developments. - Market Expectations: Compare news against what the market was pricing in. For example, if inflation is slightly lower than expected, markets might rally. 2. Check the Source: - Stick to reliable platforms like Bloomberg,Business Standard,Economic Times, or TradingView’s News tab itself. - Avoid relying on social media unless the source is credible and verified especially whatsapp and instagram. 3. Correlate News with Market Behavior: - Sentiment Check: Is the market reacting logically, or is there panic or euphoria? - Volume Analysis: High trading volume after news confirms market interest and direction. - Price Action: Analyze how news aligns with support/resistance levels, trendlines, or candlestick patterns. ---------------------------------------------------------------------------------------------------------------------- Trading Strategies Around News (A LOT OF MOVING PARTS ARE THERE) 1. Pre-News Planning: - Economic Calendars: Use tools like TradingView’s economic calendar to track key events and avoid getting caught off guard. - Set Alerts: Get notified when price approaches critical levels before major news. 2. During the News: - Stay Calm: Markets can be irrational immediately after news drops. Wait for confirmation before entering a trade. - Avoid Overtrading: Resist the urge to chase big moves without a solid plan. 3. Post-News Opportunities: - Reactions vs. Overreactions: Markets often overreact to news. Look for retracement opportunities if a move seems exaggerated. - Trend Continuation: If news aligns with the broader trend, it could strengthen the momentum. ---------------------------------------------------------------------------------------------------------------------- Common News Events and How to Trade Them 1. Earnings Reports: - Watch for surprises. Positive earnings with high guidance often result in gap-ups. - Strategy: Enter on pullbacks after the initial spike, using volume as confirmation. 2. Interest Rate Decisions: - Rate hikes typically hurt growth stocks but benefit financials. - Strategy: Use news to trade sector ETFs or indices. 3. Mergers and Acquisitions: - Acquired companies usually rise, while acquiring companies might drop. - Strategy: Go long on the target company and monitor the acquiring company for overreaction. ---------------------------------------------------------------------------------------------------------------------- Tools and Platforms for News Analysis 1. TradingView: - Use the News Tab for curated, real-time news. - Economic Calendar: Plan trades around key economic releases. 2. News Aggregators: - Platforms like Bloomberg Terminal, Reuters, and Investing.com,ET, Business Standard offer reliable and fast news feeds. 3. Social Media: - Twitter can provide breaking news but should always be verified against credible sources. ---------------------------------------------------------------------------------------------------------------------- Mistakes to Avoid 1. Reacting Without a Plan: - Emotional trading leads to losses. Always follow your strategy and risk management rules. 2. Ignoring Risk Management: - High volatility during news events can lead to slippage and unexpected losses. Use tight stop-loss orders. 3. Relying Solely on News: - Combine news with technical indicators and price action for well-rounded decisions. ---------------------------------------------------------------------------------------------------------------------- Case Study: Trading Post-News Scenario: - The Federal Reserve/ RBI announces a rate hike, higher than expected. - Market Reaction: The S&P 500 / NIFTY 50 drops sharply, while bank stocks rally. - Your Move: - Check technical charts for breakdowns or breakouts. - Trade financial sector ETFs or short overbought indices. ---------------------------------------------------------------------------------------------------------------------- Conclusion For traders, news isn’t just information—it’s an opportunity. By learning to analyze news effectively, filtering out noise, and correlating it with technical analysis, you can make better trading decisions. The goal is not to predict the news but to react to how the market interprets it. Stay disciplined, stay informed, and trade with confidence. Follow me for more such content ahead.Till then HAPPY TRADING !!!
NSE:NIFTYEducation
by keshevdugar
Nifty Weak AheadNSE:NIFTY still looks neutral until 100 DSMA is breached. Support and Resistance have been Marked. Weak GDP numbers may have an impact next week. 📌Thank you for exploring my idea! I hope you found it valuable. 🙏FLLOW for more 👍BOOST if useful ✍️COMMENT Below your views. Meanwhile, check out my other stock ideas below until this trade is activated. I would love your feedback. Disclaimer: This analysis is intended solely for informational and educational purposes and should not be interpreted as financial advice. It is advisable to consult a qualified financial advisor or conduct thorough research before making investment decisions.
NSE:NIFTY
by Karanshah137
Kalyani Steels Q1 down. More pain possible ahead!!!Kalyani Steels Q1 results down double digits. Weakness shown in chart since July 15. Till now 800 held as strong support. Not sure if that support will hold further. If 800 gets broken, ~18% fall to 650. Quarterly chart RSI is still ok. But monthly, weekly chart RSI are down. Double top around 1074-1083. Head and Shoulder pattern is forming. An anomaly which I already observed during this market, bearish H&S pattern gets negated. Nifty Metals W. After reaching the cup target and then Fib target on May 21, it consolidated until Jul 8 '24 and then broke down. This month Price broken down from parallel channel as well. Kalyani Steels had a max drawdown of ~44% twice and 40% 5 times and ~20-25% for around 7 times since Feb '22. Recent drawdown from ATH is 26%. If KSL were to break 800, then as mentioned earlier there would be a 18% fall (max drawdown 44 - recent drawdown from ATH 26 = further prediction 18) where next support is at 650. Since my Avg price is 257 that too after exiting initial investment + 20% profit, I made my decision to stay put with the rest of the units. Apart from technical, fundamental reason for staying put is due to expansion plan at Odisha of 5124cr with 10K TPA capacity for aero & defense components
NSE:KSLShort
by naraykln
Thangamayil shining: The strong financials caused a price surge!Company Overview Thangamayil Jewellery Limited (TMJL) is a rapidly growing company in India with a chain of retail jewellery stores in Tamil Nadu. They specialize in selling Gold, Silver, Diamonds, and Platinum, with gold being the main source of income. The majority of their ornaments are purchased from dealers in states like Andhra Pradesh, Gujarat, Kerala, and West Bengal for sale in their stores. Established in 1947, Thangamayil is headquartered in Madurai, India. Market Capitalization ● Current Market Cap - ₹ 5,128 Cr. ● Market Cap 3-years back - ₹ 802 Cr. ● The figures indicate that the company has increased over six times in the past three years, which is truly remarkable. Revenue & Profit Growth ● In the last three years, this stock has demonstrated an impressive compounded annual growth rate of 28% in its sales figures. ● Meanwhile, the total profit growth during this period has been a modest 12%. ● The company has successfully maintained a operating profit margin of 6%, which has risen from 4% in FY24. ● For the fiscal year 2024, the earnings per share have seen a remarkable increase, soaring from 29.10 in fiscal year 2023 to 44.91. Increasing Product Demand ● Inventory Turnover Ratio ➖ This ratio typically assists in determining whether the growth in sales is primarily due to rising product prices or if it is also influenced by increased demand for the product. ➖ Current Inventory Turnover - 3.14 ➖ Inventory Turnover 3 years ago - 2.63 ➖ These figures indicate that product demand has risen over the past three years. Valuation ● P/E Ratio The company's present price-to-earnings (PE) ratio stands at 42.3, significantly higher than its 1-year median PE of 31. When we look at the industry average PE of 31.6, it indicates that the stock might be considered somewhat overvalued at this time. ● PEG Ratio The company has a PEG ratio of 1.3, indicating that its current P/E ratio is valid. ● Intrinsic Value ➖ Thangamayil Jewellery is currently trading at ₹1870, which is nearly 2.5 times its intrinsic value of ₹764, indicating that the stock is overvalued at this moment. ➖ When we compare Thangamayil to its competitors, such as Titan and Kalyan Jewellers, some interesting insights emerge. Titan's current market price (CMP) stands at ₹3560, which is nearly 5.5 times its intrinsic value of ₹652. Meanwhile, Kalyan Jewellers has a CMP of ₹545, approximately 4.7 times its intrinsic value of ₹115. ➖ These numbers don't necessarily indicate that Titan and Kalyan Jewellers are overvalued; rather, they suggest that Thangamayil could be an attractive investment choice. Debt Analysis ● Debt to Equity Ratio ➖ The company carries a debt of approximately ₹532 Cr., resulting in a debt-to-equity ratio of 1.08. ➖ When discussing debt, it's important to note that for a small-cap company, this isn't necessarily a major concern. The key factor to consider is whether the company can consistently meet its loan interest payments. ➖ To assess this, we should examine the interest coverage ratio. ● Interest Coverage Ratio With an interest coverage ratio of 5.62, it’s evident that the company is well-equipped to manage its loan interest payments regularly. Cash Flow Analysis ● Operating cash flow has seen a remarkable surge, soaring to 330 crore from just 10 crore in FY23. ● The CFO/PAT ratio is currently at 0.74 of the five-year average, indicating that the company is quite proficient at converting its profits into cash. Shareholding Pattern ● The promoters have maintained their 67.33% stake for the last three quarters. ● Foreign Institutional Investors (FIIs) have been steadily raising their stakes since June 2023, now holding 1.08%. ● Domestic Institutional Investors (DIIs) have also grown their stakes to 12.08% in June 2024, up from 11.46% in June 2023. ● At the same time, retail investors have been consistently selling their shares over the past few quarters. Mutual Fund Holding ● Notable small-cap funds such as SBI Small Cap Fund and DSP Small Cap Fund have made substantial investments in this stock, representing 0.63% and 1.55% of their total assets under management, respectively. ● Additionally, ICICI Prudential Exports and Services Fund has recently added (in July 2024) its position in this stock, accounting for approximately 1.11% of its overall portfolio value. Technical Aspects ● From a technical standpoint, this stock appear to be currently overextended. Any pullbacks could provide a valuable opportunity to take positions. ● Stock Volume & Delivery surged by 3.4 times & 3.2 times respectively vis-a-vis their 5 day average with a 5.48% move in price. Conclusion While the company primarily functions in Tamil Nadu, it's fascinating to note that this state accounts for the largest portion (40%) of India's overall gold consumption. Furthermore, the company is gearing up to make its mark in the Chennai market by launching a flagship store along with 3-4 satellite locations. Given the increasing demand for gold jewelry, we anticipate that Thangamayil Jewellery will thrive in the industry in the years ahead.
NSE:THANGAMAYLLong
by GoodluckCapital
1
Deep Discounted Stock: Prince PipesPrince Pipes has been in strong correction mode for the past 4 months. Prince Pipes is trading near the 3.6-year support zone of 410. The stock has corrected ~50 percent from all-time highs of 897 levels. The stock price is trading above the important support zone of 410 levels. Pros Spending by the government on housing and infrastructure may enhance volumes. Greater probability of imposition of anti-dumping tariff on PVC resin imports. The capital expenditure projection for FY25 is set at Rs 330-350 crores. Can consider to short-term to long-term. Resistance levels: 521, 578, 680, 755 Support levels: 410, 379
NSE:PRINCEPIPELong
by shanmurali
Will AI Rewrite the Timeless Story of Price Action?1.What is Price Action? Price action is the raw, unfiltered movement of a market’s price over time. It reflects the collective emotions and decisions of market participants—fear, greed, hope, and panic. At its core, price action carries the DNA of human psychology, making it timeless and universal. One fascinating element of price action is its asymmetry. When the market rises, it often does so in a gradual, orderly manner, driven by cautious optimism. But when the market falls, fear takes over, leading to sharp, sudden sell-offs. This is because humans are inherently more afraid of losing money than they are excited about gaining it. This emotional imbalance—fear of losses and greed for gains—creates the unique patterns we observe on charts. And here’s the remarkable part: the price action of the 1970 crash in S&P 500 looks very similar to that of 2008 NIFTY 50 crash (see the image below).Despite technological advancements, the charts of past decades echo the same fear-driven collapses and steady climbs we see today. Why? Because human emotions have not changed, and they remain the core drivers of price action. ------------------------------------------------------------------------------------------------------------------- 2.How AI Is Changing the Game Artificial Intelligence (AI) is reshaping the financial markets, from executing trades in microseconds to analyzing sentiment across vast datasets. High-frequency trading (HFT) and predictive AI models have revolutionized how markets operate. However, there’s a fundamental truth that often gets overlooked: AI is created by humans. The algorithms and codes powering AI were written by humans, meaning they inherently reflect human logic, biases, and assumptions. While AI can analyze patterns and react faster than any human, it is ultimately bound by the constraints of its programming. It cannot replicate the instinctive and emotional elements of human behavior that form the essence of price action. Even in 2024, with all the advancements in AI, the market’s movements are still influenced by the same human emotions that shaped the price action of the 1900s. The fear of missing out (FOMO), panic selling during a crash, or greed during a bubble are not going away. AI can respond to these behaviours, but it cannot replace them. ------------------------------------------------------------------------------------------------------------------- 3.The Future of Price Action AI is not here to erase price action; it’s here to evolve it. Traders will need to adapt to this new landscape, where algorithms coexist with human psychology. While traditional patterns may lose some reliability, opportunities will arise in new forms. Traders who combine human intuition with AI insights will have the edge. Fear and greed will always be present in the markets, shaping price action just as they have for decades. The challenge for traders is to navigate this evolving market environment while remembering that, at its core, price action is still a story of human behavior—no matter how advanced the technology becomes. ------------------------------------------------------------------------------------------------------------------- Conclusion: AI will change the way we trade, but it won’t change the emotional DNA of the markets. Price action will continue to tell the story of human psychology, with all its unpredictability and drama, ensuring that markets remain as fascinating as ever. What are your views on this? Do let me know in the comment section below.
NSE:NIFTYEducation
by keshevdugar
6
Swing Current Price: The stock is trading at ₹4,469.65, up ₹235.50 (5.56%) for the day, indicating strong bullish momentum. Trendline Breakout: The stock has broken out of a downward-sloping trendline (orange line), suggesting a reversal of the recent downtrend. Support Levels: Strong support exists at ₹3,879.00 (blue horizontal line), which has held multiple times during previous pullbacks. Targets: 1st Target: ₹4,914.70 (green horizontal line), representing the next resistance zone. 2nd Target: ₹5,559.40 (black horizontal line), a higher resistance level and potential target. Volume Analysis The breakout is supported by increasing volume, which strengthens the case for bullish continuation. Conclusion Bullish View: The breakout from the trendline with strong volume indicates that the stock might move toward its 1st target of ₹4,914.70 and potentially to ₹5,559.40 if momentum continues. Bearish Risk: A failure to sustain above the breakout level could lead to a retest of the ₹3,879.00 support. This chart suggests a bullish trend with clear targets for traders to watch.
NSE:MAZDOCKLong
by iamsaurabh533