Blog Posts by Shrikant Chouhan

  • Approach of investor while using technical indicators

    By Shrikant Chouhan | Strategic Moves – Fri 18 May, 2012 2:41 PM IST
    Investor and trader should focus on basic do’s and don’t while using technical indicators:

    Moving Average Convergence Divergence (MACD)

    Do’s
    •    The basic rules for trading the MACD would enter trend positions by referring only to the signal line calculation. Buy when the signal line moves above zero, and sell when the signal line falls below zero.
    •    Watch for Kiss of life and Kiss of death patterns to catch a big move.
    •    Price is supreme, confirmation of prices is important to initiate position.
    Don’t:
    •    One should not try to pre-empt the patterns or the crossover will happen.

    Relative Strength Index:

    Do’s:
    •    A popular method of analyzing the RSI is to look for a divergences (both positive and negative) to get alert not react.
    •    Look for stock coming out of Overbought and Oversold regions.
    •    Act on divergences only on price confirmation (preferably averages) to initiate trade.
    Don’t:
    •    Basic mistake is seen when stock enters overbought zone, people refrain from long side andRead More »

  • Basic technical tools for picking up lucrative stocks

    By Shrikant Chouhan | Strategic Moves – Tue 17 Apr, 2012 2:30 PM IST

    Rather going into more details about its construction first we will understand how oscillators are useful to support our analysis of price reading for the short term and long term.  Now a days these oscillators are readily available with the software of technical analysis.

    MACD    : Developed by Gerald Appel in the late seventies, the Moving Average Convergence-Divergence (MACD) indicator is one of the simplest and most effective momentum indicators available. The MACD turns two trend-following indicators, moving averages, into a momentum oscillator by subtracting the longer moving average from the shorter moving average. As a result, the MACD offers the best of both worlds: trend following and momentum.

    The MACD fluctuates above and below the zero line as the moving averages converge, cross and diverge. Traders can look for signal line crossovers, centreline crossovers and divergences to generate signals. Because the MACD is unbounded, it is not particularly useful for identifying

    Read More »

  • Using technical tools to make lucrative investment decisions

    By Shrikant Chouhan | Strategic Moves – Thu 5 Apr, 2012 11:56 AM IST

    Everyone uses technical analysis to identify “when to buy/sell” along with fundamentals which normally supports to the theory of “why to buy/sell”. But I feel that in the market, buying or selling always starts on the basis of futuristic fundamentals, which is difficult to guess based on current fundamentals.  Of course, with the help of macroeconomics we can come on a broader conclusion but then there always remains the scope for “if and but” that many a time makes it difficult for analysts to take a concrete decision, whether to buy or sell  in an euphoric scenario like the rise of 2008 and the recent fall of 2011. 

    The constant macroeconomic change affects major corporates of the country. In our opinion they are at the top of the hierarchy of the market participants.  Based on their comfort or uneasiness they start reacting to it. Then the action of corporates’ spreads into other layers of participants like insiders, operators, mutual funds/ Institutions in a step by step mode. By

    Read More »

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