tag:blogger.com,1999:blog-7148222695370746347.post53467344283674428..comments2023-10-15T17:16:24.091+05:30Comments on Stock Market Charts | India Mutual Funds Investment: Stock Chart Pattern - Tata Steel (An Update)Subhankarhttp://www.blogger.com/profile/13248068905130821262noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-7148222695370746347.post-63701020434090433642010-09-06T17:33:09.511+05:302010-09-06T17:33:09.511+05:30Thank you subhankarji !Thank you subhankarji !Unknownhttps://www.blogger.com/profile/11552670751159839447noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-17683615409140206972010-09-01T09:40:00.806+05:302010-09-01T09:40:00.806+05:30Thanks for your comments, Shailendra.
Haven't...Thanks for your comments, Shailendra.<br /><br />Haven't read Peter Lynch's book, but this is what typically happens in cyclical stocks: at or near the bottom of the cycle, the smart money starts to buy, pushing up the share price and the P/E. Earnings take a while to catch up. Near the top of the cycle, smart money starts to bail out, depressing prices and lowering P/E ratio. <br /><br />You can check the historic P/E ratios to find out the range in which the stock trades, and decide on buy-sell decisions. That is the fundamental approach. I had mentioned the technical approach of doing the same thing in my email - which you have already posted.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-49270672868649514422010-08-29T23:54:12.623+05:302010-08-29T23:54:12.623+05:30subhankarji: BTW, one thing I forgot to mention ea...subhankarji: BTW, one thing I forgot to mention earlier and just remembered. My mistake. <br />1. When price of Tata Steel is low/high, it implies that earnings/potential earnings<br />are also low/high and market is responding to it .. although not perfect.<br /><br />Now, Peter Lynch has mentioned in "Beating the Street", Chapter 15 that it is<br />better to buy a cyclical when the PE is high compared to when it is low ..<br />bit confused due to the contrast ...Unknownhttps://www.blogger.com/profile/11552670751159839447noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-50492586467721635272010-08-29T23:42:37.206+05:302010-08-29T23:42:37.206+05:30Subhankarji's answer for couple of my doubts o...Subhankarji's answer for couple of my doubts on on Tata Steel .. posting for ref :<br />Hi Shailendra<br /> In all cyclical stocks - whether commodities or commercial vehicles - you can generate more wealth by selective trading. That doesn't mean you have to buy all the stocks at the bottom of the cycle and sell them all at the top. That would be a miracle because exact tops and bottoms are very difficult to identify.<br /><br /> The trick is to acquire the best stocks in small lots and then hang on to them till opportunities for trading present themselves. If you look at the Tata Steel long-term chart, you will note that it usually trades between 300 and 600. Only on rare occasions does it fall below 300 or rise above 600.<br /><br /> A thumb rule is to choose the mid-point of the range - which is 450 - and try to buy when the stock is trading between 400 and 500. Say, 25 or 50 shares each time it is within the 'buy zone' (and as your savings may permit).<br /><br /> If the stock falls below 300, start to buy larger lots and stop when the stock moves above 300. If the stock rises above 600, don't sell, but maintain an 8% trailing stop-loss and ride the bull rally. Sell a decent quantity - not all - if the stop-loss is hit.<br /><br /> If you can follow this strategy in a patient and disciplined manner with only 3 or 4 stocks - like Tata Steel, Tata Motors, Hindalco, Reliance - you will gradually build up a strong foundation for long-term wealth creation. The other benefit of staying invested is the occasional 'free' bonus shares and rights shares at discounts to the market price.<br /><br /> In short, follow a buy-and-hold strategy with long-term trading.<br /><br /> Subhankar<br /> <br /><br /> --- On Sat, 8/28/10, shailendra gaur wrote:<br /><br /><br /> From: shailendra gaur <br /> Subject: Re: The E-Book.<br /> To: "S Ghose" <br /> Date: Saturday, August 28, 2010, 11:24 AM<br /><br /> Dear Mr. Subhankar,<br /><br /> One doubt I had read .. steel is a commodity .. and I have read that the only way to make money is to<br /> buy when the commodity cycle is at the bottom and sell at the top. And, that by keeping commodity<br /> stocks for long time one does not make much money... due to the cycle/plant maintenance cost etc.<br /><br /> This raises two questions -<br /> 1. Where/how do I find the commodity cycle charts (ex- for steel)? Or, is it implicit coz economy is up,<br /> market is up, so bottom is passed long back. (a year ago?)<br /><br /> 2. Then, is it worth keeping Tata Steel for long time, if it should be sold at peak of cycle.<br /> Please comment. <br /> Regards,<br /> Shailendra<br /><br /> From: S Ghose <br /> To: shailendra gaur <br /> Sent: Tue, August 17, 2010 4:03:51 PM<br /> Subject: Re: The E-Book.<br /><br /> Thanks for the kind words, Shailendra.<br /><br /> I am a long-term holder of Tata Steel and never invested in Sesa Goa - so my opinions will be biased! Both are good stocks to own.<br /><br /> Tata Steel is a manufacturer of steel that owns captive iron ore mines. Sesa Goa is a pure iron ore mining company. The two can't be compared. To choose between one over the other, you have to look at the fundamentals. So check the RoE, RoA, cash flows from operations, debt/equity ratio, dividend yield, etc. and then decide. As far as the management is concerned, it is your call who you trust more - the Tatas or the Agarwals.<br /><br /> Both stocks have corrected from their recent peaks. Usually acquisitions are value-destructive in the short-term. Tata's Corus acquisition led to a fall in the stock price. But now, Corus profits are beginning to kick in. Debt is still high, but reducing.<br /><br /> Sesa Goa has good cash reserves and may not indulge in huge borrowing to fund the deal. The government may or may not approve the stake sale. Other buyers may throw their hats in the ring - thereby pushing up the acquisition price. You may want to wait for the deal contours to take shape before entering.<br /><br /> SubhankarUnknownhttps://www.blogger.com/profile/11552670751159839447noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-2298301930538113602010-08-29T23:41:51.319+05:302010-08-29T23:41:51.319+05:30Subhankarji's answer for couple of my doubts o...Subhankarji's answer for couple of my doubts on on Tata Steel .. posting for ref :<br />Hi Shailendra<br /> In all cyclical stocks - whether commodities or commercial vehicles - you can generate more wealth by selective trading. That doesn't mean you have to buy all the stocks at the bottom of the cycle and sell them all at the top. That would be a miracle because exact tops and bottoms are very difficult to identify.<br /><br /> The trick is to acquire the best stocks in small lots and then hang on to them till opportunities for trading present themselves. If you look at the Tata Steel long-term chart, you will note that it usually trades between 300 and 600. Only on rare occasions does it fall below 300 or rise above 600.<br /><br /> A thumb rule is to choose the mid-point of the range - which is 450 - and try to buy when the stock is trading between 400 and 500. Say, 25 or 50 shares each time it is within the 'buy zone' (and as your savings may permit).<br /><br /> If the stock falls below 300, start to buy larger lots and stop when the stock moves above 300. If the stock rises above 600, don't sell, but maintain an 8% trailing stop-loss and ride the bull rally. Sell a decent quantity - not all - if the stop-loss is hit.<br /><br /> If you can follow this strategy in a patient and disciplined manner with only 3 or 4 stocks - like Tata Steel, Tata Motors, Hindalco, Reliance - you will gradually build up a strong foundation for long-term wealth creation. The other benefit of staying invested is the occasional 'free' bonus shares and rights shares at discounts to the market price.<br /><br /> In short, follow a buy-and-hold strategy with long-term trading.<br /><br /> Subhankar<br /> <br /><br /> --- On Sat, 8/28/10, shailendra gaur wrote:<br /><br /><br /> From: shailendra gaur <br /> Subject: Re: The E-Book.<br /> To: "S Ghose" <br /> Date: Saturday, August 28, 2010, 11:24 AM<br /><br /> Dear Mr. Subhankar,<br /><br /> One doubt I had read .. steel is a commodity .. and I have read that the only way to make money is to<br /> buy when the commodity cycle is at the bottom and sell at the top. And, that by keeping commodity<br /> stocks for long time one does not make much money... due to the cycle/plant maintenance cost etc.<br /><br /> This raises two questions -<br /> 1. Where/how do I find the commodity cycle charts (ex- for steel)? Or, is it implicit coz economy is up,<br /> market is up, so bottom is passed long back. (a year ago?)<br /><br /> 2. Then, is it worth keeping Tata Steel for long time, if it should be sold at peak of cycle.<br /> Please comment. <br /> Regards,<br /> Shailendra<br /><br /> From: S Ghose <br /> To: shailendra gaur <br /> Sent: Tue, August 17, 2010 4:03:51 PM<br /> Subject: Re: The E-Book.<br /><br /> Thanks for the kind words, Shailendra.<br /><br /> I am a long-term holder of Tata Steel and never invested in Sesa Goa - so my opinions will be biased! Both are good stocks to own.<br /><br /> Tata Steel is a manufacturer of steel that owns captive iron ore mines. Sesa Goa is a pure iron ore mining company. The two can't be compared. To choose between one over the other, you have to look at the fundamentals. So check the RoE, RoA, cash flows from operations, debt/equity ratio, dividend yield, etc. and then decide. As far as the management is concerned, it is your call who you trust more - the Tatas or the Agarwals.<br /><br /> Both stocks have corrected from their recent peaks. Usually acquisitions are value-destructive in the short-term. Tata's Corus acquisition led to a fall in the stock price. But now, Corus profits are beginning to kick in. Debt is still high, but reducing.<br /><br /> Sesa Goa has good cash reserves and may not indulge in huge borrowing to fund the deal. The government may or may not approve the stake sale. Other buyers may throw their hats in the ring - thereby pushing up the acquisition price. You may want to wait for the deal contours to take shape before entering.<br /><br /> SubhankarUnknownhttps://www.blogger.com/profile/11552670751159839447noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-548662571747258362010-08-24T13:02:36.816+05:302010-08-24T13:02:36.816+05:30@hbc: Appreciate the kind words.
@deep: Thanks fo...@hbc: Appreciate the kind words.<br /><br />@deep: Thanks for your comment.Subhankarhttps://www.blogger.com/profile/13248068905130821262noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-85756708250228447222010-08-12T19:37:49.193+05:302010-08-12T19:37:49.193+05:30Hello Sir!
Thanks a lot for your technical analysi...Hello Sir!<br />Thanks a lot for your technical analysisUnknownhttps://www.blogger.com/profile/03225642316497627465noreply@blogger.comtag:blogger.com,1999:blog-7148222695370746347.post-68716818156594737532010-08-11T21:41:49.774+05:302010-08-11T21:41:49.774+05:30subhankarji: excellent study and narration of Tata...subhankarji: excellent study and narration of Tatasteel chart: <br /><br />Pl keep posting such views regularly so that decisions may be taken timely. Regardsharkara.blogspot.comhttps://www.blogger.com/profile/13606261383904617941noreply@blogger.com