Learning Curve

2020-08-18 18:57:48 CONSTRUCTING A VOLUME CHART

Volume is the number of contracts or shares traded. It is the most direct way to measure the amount of market activity.

Instead of using the OHLC data of fixed time periods, we take the OHLC data from a volume block. Hence, on volume charts, each bar (candlestick) represents a fixed volume. For instance, a 233-volume chart will display the OHLC of a 233-volume block for each bar.

You can plot volume charts in the style of a bar chart or candlestick chart.

Not sure what setting to use for your volume chart?

A simple starting point is to use the average volume of your usual trading time-frame. For instance, we arrived at 28000-volume charts in the examples by measuring the long-term average volume of 5-minute ES bars.

TRADING WITH A VOLUME CHART

As a volume chart slows down when market activity is low, it shows less sideways movement. Hence, it tends to show smoother price waves that are conducive for trading. This is the main advantage of a volume chart.

Generally, you can still rely on bar patterns and candlestick patterns in volume charts.

However, using a volume chart has major implications on traditional volume analysis. A trader using volume charts can no longer:

Look for volume patterns that support chart patterns

Use volume to confirm if a break-out is valid

Use volume indicators

Employ volume spread analysis

Nonetheless, if you understand the underlying concepts of the above techniques, you can adapt them for trading volume charts. For instance, to find high volume breakouts, look for price thrusts with consecutive bars moving in the same direction. As each bar represents a fixed volume, the consecutive bars represent a high volume swing.

Naturally, a basic volume overlay is useless. Instead, consider using a time overlay that shows the time taken to complete each volume bar. Open / Comment

2020-08-18 18:57:46 Open / Comment

2020-08-17 16:12:04 Investor Tip:

- Buy only 1 share of Business you wish to Own
- Read Annual Report, Concalls. Understand the Product, Vision & Potential.

With Conviction, Buy Further Shares. Never Hurry.

When Vision is 10+ years, 5 - 15% opportunity doesn't Matter. Open / Comment

2020-08-16 13:49:06 A THREAD ON OPTIONS SYNTHETICS:

With synthetics you can increase your returns as the margin requirements/costs are less. Everyone wanting to become a top trader needs to know this and get their concepts cleared because many people don't know what they're doing

Synthetics are formed by the mixture/combinations of any two of the following three.
1. Calls
2. Puts
3. Futures/Stocks

You don't even need to touch futures/stocks. Whatever kind of payoff graph you want, you can get via options only.

Fut buy + Put buy= Call buy
Fut buy + Call sell = Put sell
Fut sell + Call buy = Put Buy
Fut sell + Put sell = Call sell

Fut buy = Call Buy + Put Sell
Fut sell = Put Buy + Call Sell

Know this very well as this is must to know. Now I'll show you how to increase returns.

Synthetics will be used to handle margin requirements better thereby increasing your leverage.

For eg, you want to buy a stock you have to pay huge margin.

Instead of that you can buy an ATM call and sell an ATM put. Margins are drastically lower via options.

We cannot short stocks in India, we need to trade via futures. Some big traders like Sundar Sir, they don't like to trade in futures as they trade via collateral and mtm loss needs to be paid daily. Synthetics take care of that as u only have to pay the loss when booked.

To achieve the collateral benefits plus lower margins, if you want to sell a stock just do the exact reverse of everything I wrote for buying a stock via synthetics.

Selling a stock = Buying puts + Selling Calls.

Payoff graph will be exact same.

Some option sellers claim to understand options very well and they "HATE" option buying. This one's for them.

They say buy fut and buy put for "hedging".

What they fail to realise is actually they've just bought a call via synthetics.

You do what you want but then you cannot be against option buying if you trade in fut and hedge

If you buy a call profit is unlimited, but if no movement occurs then the option will deteriorate in value.

If you buy fut and buy put, and if stock doesn't move, the put goes to zero and fut doesn't give profit.

For Sell fut + buy call just do the reverse i.e. put buy

One more thing irritates me too much. These "covered call" guys fail to realise that they can achieve the same via only selling puts.

They buy fut and sell call to "hedge" paying two margin requirements.

Selling a put requires only one margin.

Opp for covered puts.

I hope I helped you clear some misconceptions/doubts regarding synthetics. Open / Comment

2020-08-16 13:38:25 Open / Comment

2020-08-16 11:38:06 List Of Bullish ChartPattern

*Cup& Handle pattern
*Inverter H&S Pattern
*Ascending Traingle Pattern
*Double bottom Breakout
*Rounding Bottom Breakout
*Falling Wedge Breakout
*Channel Breakout Open / Comment

2020-08-15 16:36:37 Learning Curve pinned Deleted message Open / Comment

2020-08-15 16:36:28 Open / Comment

2020-08-15 16:36:19 Aurobindo Pharma fundamental Analysis

Numbers in line ; US steady despite injectables drop.
Q1FY21 revenues grew 8.8% YoY to 5925 crore mainly due to 15.6% YoY growth in the US to 3107 crore. EU business de-grew 5.0% YoY to 1322 crore. ARV segment grew 33.6% YoY to 426 crore. API segment grew 6.6% YoY to 780 crore. EBITDA margins remained flat YoY at 21.2% as higher gross margins were offset by higher staff costs and other expenditure. EBITDA grew 9.2% YoY to | 1257.4 crore . Adjusted PAT grew 20.4% YoY to | 780.6 crore. EBITDA was due to lower interest cost and higher other income (including | 22.2 crore in forex gain).

US key growth driver despite recent compliance upheavals
After filing its first ANDA in the US in 2003, the company has come a long way as current ANDA filings are at 604. US revenues have grown from ~US$100 million in 2009 crossing $1.6 billion sales as on 2020. In rupee terms, US sales have grown at 17% CAGR to 11484 crore in FY16-20. US formulations now constitute 50% of total turnover, up from 30% in FY13. Despite calling off the acquisition of Sandoz’ US dermatology and oral solid portfolio, we expect US revenue size to reach 14925 crore in FY22E at a 14% CAGR over FY20-22E on the back of a strong US pipeline with 50-60
products expected to be launched in FY21 itself.

Transformation, capacity optimisation to improve financials
The API: formulations ratio has improved from 43:57 in FY13 to 14:86 in FY20. Another USP of the company is its vertically integrated model with huge capacity, unmatched by most peers. The company owns 28 manufacturing facilities, including eight key formulations facilities in India and abroad. These can be optimised by 1) continuous US filings and launches, 2) incremental launches and filings in the RoW markets and 3) sittransfers and supplies for products covered under the Actavis deal.

Valuation & Outlook
FY21 is looking much more promising with respite for unit IV, decent Q1performance and a stable outlook. Aurobindo has one of the best enduring generics ecosystems among peers (vertically integrated model, lower product concentration) to withstand volatility in the US and other generics space. It has also significantly improved its debt position utilising additional cash freed up from foregoing the Sandoz deal. This also bodes well as the company plans to venture into complex areas like biosimilars, vaccines and complex injectables where capital requirements are higher and precise.
While a few other plants still remain under the USFDA scrutiny, the clearance for a critical plant indicates the company continues to work towards stricter adherence.

Aurobindo Pharma is available at cheaper valuation as compared to its peers one can buy for Target price of 1100 at 15x FY22E EPS of | 73.2. Open / Comment

2020-08-14 17:55:31 Open / Comment