Team StockArchitect wishes all of you a very Happy Diwali and a prosperous New Year.
May this Dussehra bring you loads of joy, success and prosperity, and may your worries burn away with the effigy of Ravana. Wishing you a year full of smiles and happiness. – Team StockArchitect
Volume is representative of how many shares change hands in a stock, and as such, it indicates the interest in a security. Since each stock is different, and has a different amount of shares outstanding, volume can be compared to historical volume within a stock to spot changes, or compared to other stocks to find which are suitable for trading. Volume is also used to confirm price trends, breakouts, and spot potential reversals. Volume has also been implemented into indicators, which can aid in analyzing stocks (and other markets).
Volume is important because it shows the level of interest in a stock. Current volume in a stock, relative to prior volume, shows if interest is higher or lower in a stock than it was before. High volume, or relatively high volume (compared to prior volume), is more suitable for active traders. Very low volume typically indicates a lack of interest and usually little price movement. Volume is also significant for screening stocks. Average volume—the typical volume seen in a day over a period time—helps greatly in this regard. Day traders need to be able to get in and out of a stock quickly and with ease, so they will want to trade stocks with high daily volume – typically 1 million shares at absolute minimum.Swing traders and investors have a little more leeway and therefore may trade stocks with lower volume, around 500,000 and 100,000 shares or more per day, respectively. They still want stocks that have enough volume to get in and out when they need to, but the urgency is not quite as high as it is for short-term traders.That’s the significance of volume as a defined number; here’s how to analyze it.
There are three primary ways we can use volume in conjunction with price analysis: confirming trends (or not), spotting potential price reversals, and confirming price breakouts (or not).
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Bull markets seem like they should be easier than the alternative but even dealing with gains can be challenging as an investor. Research shows that investors trade more often during bull markets because we don’t know what to do with gains, it’s difficult to hold winners, and there are constant temptations with even bigger winners elsewhere. This piece I wrote for Bloomberg looks at how to deal with big gainers in your portfolio.
*******Major stock indexes are hitting new highs almost daily, adding to the huge gains many securities have posted in recent years. For example, Nvidia Corp. has gained almost 1,800 percent since the start of 2013. Over the past five years or so, Netflix is up 1,375 percent; Tesla is up 835 percent; Facebook is up 590 percent, and Amazon has risen 380 percent. Bitcoin is up more than 900 percent in 2017 alone.If you’ve been fortunate enough to be involved in any of these equities or other market stars, you made the right choice. But investors would be wise to work through their options on how to handle these stocks. Large gains in your portfolio are a good problem to have, but the good news also comes with psychological baggage. Continue Reading →
The benchmark indices ended at record closing high for the second straight session on Friday on strong quarterly results. The gains were led by index heavyweights like ITC, RIL, and Hindalco.
The S&P BSE Sensex settled at a record high of 37,337, up 352 points, while the broader Nifty 50 index settled at a new high of 11,278, up 111 points.
In intra-day deals, the S&P BSE Sensex hit a fresh all-time high of 37368.62 while the Nifty50 index touched its record high level of 11,283.40.
Leading the gains is ITC, which has surged over 5 per cent on the BSE. Beating street estimates, diversified conglomerate ITC on Thursday posted a 10.07 per cent jump in its net profit at Rs 28.19 billion for the quarter ended June 30, 2018 with its total revenue, inclusive of other income, registered at Rs 112.78 billion.
Among other gainers, Reliance Industries was among the top contributors to the NSE index, up over 1.5 per cent ahead of its quarterly results later in the day. The oil-to-retail conglomerate will also report results of its telecom arm Reliance Jio.
Nifty Bank index also hit an all-time high, ending 0.8% higher for the day. IDFC Bank, Federal Bank, and Axis Bank were the top gainers in the pack, up between 2 per cent to 2.6 per cent.
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You might be feeling it’s an odd title given CNX Nifty (which consists of India’s top 50 companies) is merely 3.7% below its all-time high of 11,171, hit in Jan 2018.
Median drop in Nifty 50 Stocks from their 52-week high though is 17%, but the index is holding up thanks to a few heavyweights like HDFC Duo & Reliance hitting lifetime highs.
But what about broader markets?
Following is some eye-popping performance data about the 1,584 stocks listed on BSE with a market capitalization of more than Rs 100 Cr. as on 25th June 2018:
Fall from 52-week high
(Source: Ace Equity, Stalwart Advisors Research)
||No. of Stocks
|50% – 59%
|40% – 49%
|30% – 39%
|20% – 29%
The median fall for these 1,584 stocks from their 52-week high is 34%.
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Benchmark indices rose on Friday after rupee recovered from its a 16-month low against the dollar.
The S&P BSE Sensex ended at 34,925, up 262 points, while the broader Nifty50 index settled at 10,605, up 91 points
Among sectoral indices, the Nifty Metal index gained over 2% led by a rise in Hindalco, SAIL, JSPL and Tata Steel. The Nifty Auto index also rose over 1% led by Exide Industries and Tata Motors.
In individual stocks, Tata Consultancy Services (TCS), the country’s biggest software services exporter, became the first Indian company. which saw its market capitalisation (market-cap) cross Rs 7-trillion mark.
Multi Commodity Exchange of India (MCX) rallied 8% on the BSE after reports suggested that the company has entered into merger talks with the National Stock Exchange (NSE) ahead of the implementation of the universal exchange framework in October.
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