Stock Market Trading

Banks In India

2009-08-16T20:02:00.000+05:30

Banks in India can be categorized into non-scheduled banks and scheduled banks. Scheduled banks constitute of commercial banks and co-operative banks. There are about 67,000 branches of Scheduled banks spread across India. During the first phase of financial reforms, there was a nationalization of 14 major banks in 1969. This crucial step led to a shift from Class banking to Mass banking. Since then the growth of the banking industry in India has been a continuous process.

As far as the present scenario is concerned the banking industry is in a transition phase. The Public Sector Banks (PSBs), which are the foundation of the Indian Banking system account for more than 78 per cent of total banking industry assets. Unfortunately they are burdened with excessive Non Performing assets (NPAs), massive manpower and lack of modern technology.

India Local Business Listings On the other hand the Private Sector Banks in India are witnessing immense progress. They are leaders in Internet banking, mobile banking, phone banking, ATMs. On the other hand the Public Sector Banks are still facing the problem of unhappy employees. There has been a decrease of 20 percent in the employee strength of the private sector in the wake of the Voluntary Retirement Schemes (VRS). As far as foreign banks are concerned they are likely to succeed in India.

Indusland Bank was the first private bank to be set up in India. IDBI, ING Vyasa Bank, SBI Commercial and International Bank Ltd, Dhanalakshmi Bank Ltd, Karur Vysya Bank Ltd, Bank of Rajasthan Ltd etc are some Private Sector Banks. Banks from the Public Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank, Andhra Bank etc.

ANZ Grindlays Bank, ABN-AMRO Bank, American Express Bank Ltd, Citibank etc are some foreign banks operating in India.

Software Companies

2009-08-16T20:00:00.000+05:30

In the present scenario most of the countries over the world have relied upon Indian software company and firms or Software Companies for the software development activities, as the country possesses a global competency in the IT sector.

The Software development company India comprises of businesses related to the production and maintenance of computer software. The roots of the Software Industry India lies in the IT phenomenon. Services regarding software such as training, consulting and maintenance are a part of this ever-growing industry. The Software companies is witnessing a rapid growth and offers lucrative job opportunities making IT a premium career option for the youth. Infact it is one of the fastest growing sector of Indian industry.

India is emerging as a Global IT superpower. The success can be attributed to factor advantage of high quality of software human resources. The Software Industry has succeeded in converting this comparative advantage to increasing exports. More and more companies are receiving the ISO 9000 certification and the day is not far when India will have the highest number of ISO 9000 companies in the world.

Indian Software Industry is estimated to be worth USD 1.2 billion. Unfortunately the growth has been limited to a few cities around Bangalore, Mumbai, Delhi and Noida.

One problem that software companies in India are facing is that of outflow of IT professionals. This can be looked into by ensuring the conditions for investment and growth in the industry are safeguarded by political stability.

Wipro, HCL, Tata Consultancy Services, Satyam computer Services, CMC, IBM etc are some of the major Software development and software consulting firms or companies in India.

Indian Stock Market Analysis

2009-08-16T19:59:00.000+05:30

Indian Stock Market Analysis is about the correct measurement of the trends of various stocks of the leading companies topping the BSE and NSE stock charts. Indian stock market is a volatile market where the shares of the companies are subjected to changes at any point of time. The major stock indices used in the Indian Stock Market Analysis are NSE S&P CNX Nifty 50 index , BSE SENSEX, and others. From an analysis of the share market of India, investors and traders can decide whether the market is a Bull Market or a Bear Market before investing on the shares of their desired companies..

There are about 22 stock exchanges in India which regulates the market trends of different stocks. Generally the bigger companies are listed with the NSE and the BSE, but there is the OTCEI or the Over the Counter Exchange of India, which lists the medium and small sized companies. There is the SEBI or the Securities and Exchange Board of India which supervises the functioning of the stock markets in India.

Other than some restricted industries, foreign investment in general enjoys a majority share in the Indian stock market. Foreign Institutional Investors (FII) need to register themselves with the SEBI and the RBI for operating in Indian stock exchanges. In the Asset Management Companies and Merchant Banking Companies also foreign investments are welcomed. In fact from the Indian Stock Market Analysis it is known that in some specific industries foreigners can have even 100% shares.

They can invest in Euro issues of the Indian companies and also in the Indian funds that is floated abroad. In the last few years with the facility of the Online Stock Market Trading in India, it has been very convenient for the FIIs to trade in the Indian stock market. Reliance Money, Geojit, Sharekhan, Kotak Securities, ICICI Direct are some of them. From an Indian Stock Market Analysis it can be said that the increase in the foreign investments over the years no doubt have accentuated the dynamism of the Indian stock market.

The Indian Stock Market Analysis reports the most heavyweight company to be the Reliance Industries, followed by, the IT majors like Wipro, Infosys Technologies, Tata Consultancy Services and Satyam, ICICI Bank, Bharat Heavy Electricals Ltd., Dr. Reddy's and others.

Bharti IT contract: TCS, Wipro, IBM, Tech Mah short-listed

2009-08-16T19:51:00.000+05:30

Four Indian IT majors have been short-listed for Bharti Airtel's IT contract, sources told CNBC-TV18's Kritika Saxena.

Bharti does have a large outsourcing deal on the block. The deal is basically for the management of its inter-city fibre network. Sources tell us that this deal spans across five years and is valued at between USD 500 million and USD 600 million.

Sources also tell us that ten IT majors have bid for this deal out of which four IT majors have been short-listed. The names that we are picking up are Tata Consultancy Services, Wipro, Tech Mahindra, and IBM. Now, sources tell us that IBM is likely to have an edge over the other IT firms because IBM is already working on an Airtel deal, which is valued at around USD 150 million and spans across six years.

Wipro and Tech Mahindra follow IBM in their presence in the telecom space. When we contacted Airtel to give us a specific on which other IT companies that have been short-listed, Airtel was unavailable for comment.

We also learnt that the earlier contract that IBM had bagged is likely to be extended over a period of couple of years.

R Amarnath, Executive Director and Head-Corporate Finance, Centrum Capital, sees the Sensex trading between 13,500 and 17,000 between now and December.

He sees an increase in issuance from the primary markets. "We are going to see multiple issues in a fortnight or in a month. The size of the issue will also get bigger as some of the public sector undertakings (PSUs) in the pipeline or some of the larger companies in the pipeline get ready to tap the market."

Expert strategies, stock picks to trade mkts next week

Amarnath feels this will result in India being on the top of everyone’s radar. "There would be a kind of follow through effect to the secondary market as well. You would have greater volatility in terms of sell-offs and as valuations come down, there would be a bit of re-stocking and subsequent buying as well."

According to him, the overall allocations towards India should be reasonably positive. "Though, in the next two months the allocations would be largely taken away by the primary market. Overall, allocations - primary plus secondary - would be lower than what we saw in the last 3-4 months. There is going to be some decline, maybe not more than 20-25% primarily because the macroeconomic signals in the US and even in Europe are tending to be more positive than expected. We could see some bit of a capital remaining there rather than getting reallocated to emerging markets."

Deven Choksey of KR Choksey Securities feels the market to bounce off and probably go above 4,700 would really require big amount of triggers. "The possible triggers in September are: A) the end of the monsoon season, if the deficit gap probably narrow down then possibly markets would look up. B) Outcome of the Reliance’s case possibly would once again allow the investors to look at the leaders favourably. C) The amount of money which would flow into this country in subsequent period through initial public offerings and otherwise would once again bring in liquidity."

He sees the markets trading rangebound. "We would probably remain in the range of 4,400 on the downside and somewhere around 4,660 on the upside. This range at the upper end of the band probably would see some amount of profit booking coming in. At the lower end of the band, probably investors would once again get into and start buying into the market."

On trade next week:

Choksey sees the Nifty going to 4470 or 4400 next week. "Next week again the cues are not going to be different. We still have lack of triggers as far as the upside is concerned. Next week is going to be a week in which probably we are going to see a fall, and may be by the middle of the next week, whatever the fall level is either 4470 or little below that to 4400, we should see the support buying emerging. From such a level, once again you should see a corrective upside in market afterwards."

Sectoral strategies/stock picks:

Centrum Capital's Amarnath advises investors to stay underweight on the commodity space, barring energy. "Though you are seeing the bottoming out of the kind of devastation in the Western economies etc, you are not going to see a pick up in consumption because it is going to be jobless stabilization and then possibly a phase of jobless growth, in terms of the economy beginning to recover. Only then you are going to see job creation coming back again which is several quarters away."

On the IT space, he says, "Decisions being taken by customers on order wins for IT companies will be the next driver. Those would be the positive signals in terms of the growth trajectory possibly accelerating a bit. "

Deepak Mohoni of trendwatchindia advises investors to stick to individual stocks. He is bullish on ONGC. "ONGC is the kind of stock which makes step wise upwards moves. It tends to go in a range for a while and steps into a new level. It’s continuing on its long-term uptrend, and doesn’t decline very much. It is a good portfolio stock as it cushions the portfolio during declines and continues to give good returns also."

Choksey feels investors can look at public sector bank stocks at the lower end of the band. "State Bank of India is on my radar. The stock is right now quoting closer to Rs 1,800. May be one may want to get into this stock whenever it starts getting available below Rs 1,700 levels."

According to him, one will get quality stocks at lower levels when you want to buy. "At higher levels, one would have to play very selectively. "One has to book some amount of profit in some of the companies where the valuations go high."

For traders, he advises Reliance from the frontliners. "Around Rs 1,900 is always a good buy as far as Reliance is concerned." Capital goods stocks, he added, are probably offering good trading opportunity at higher levels. "If you sell at higher levels, they would definitely give you the price at lower levels to trade in this market."

NHPC IPO Allotment Chances

2009-08-13T18:41:00.000+05:30

NHPC IPO Allotment chances looks good at-least for the retail investors. Taking into consideration the final subscription figures of NHPC IPO the retail segment has been oversubscribed by 3.9 times, QIB by 29 times, Non Institutional segment by 57 times and the Employees segment by 0.5 times.

Retail investors category has got oversubscribed 3.9 times, applicants who have applied for more than 3 lots has definitely got a chance to get NHPC IPO Allotment.

NHPC IPO Allotment will be done through lottery basis and when taking in to account the number of applications received under the retail segment, investors have shown good faith and interest in this issue compared to the other big issues which flopped in recent months. NHPC IPO was fairly priced and investors can definitely hold on this stock for medium to long term for good returns.

Market buzz says that the Allotment of NHPC IPO should be good for the retail investors and everyone who has applied in the retail segment for more than 3 lots should be allotted shares. As the Employees part of the issue has only got subscribed by 0.5 times, the rest of the shares will be made available for the other applicants which increases the chances of the allotment in NHPC IPO to retail investors as well.

Investors who have received shares in National Hydro Power Corporation IPO Allotment can definitely reap money on the listing day as the Grey Market premium of NHPC IPO is quoting around Rs. 10 to Rs.13 .

More information regarding the Nhpc IPO Allotment will be updated soon over here, moreover Nhpc IPO Allotment is expected in the last week of August. Keep visiting for more information on Allotment, Listing & Grey Market prices of NHPC IPO.

Good Luck to all the investors for NHPC IPO Allotment.

Stock Market Trading

2009-07-17T21:34:00.001+05:30

Purpose of this article :
Understand basics of Online Stock Market Trading in India.
Provide detail about popular online stock trading companies in India.
Compare and discuss about stock trading websites, their products and services.
Brief Introduction - Online Stock Market Trading

1.Stock Exchange

Stocks (Shares, equity) are traded in stock exchange. India has two big stock exchanges (Bombay Stock Exchange - BSE and National Stock Exchange - NSE) and few small exchanges like Jaipur Stock Exchange etc. Click here to see the list of Stock Exchanges in India
Investor can trade stocks in any of the stock exchange in India.

2.Stock Broker

Investor requires a Stock Broker to buy and sell shares in stock exchanges (BSE, NSE etc.). Stock Broker are registered member of stock exchange. A stock broker can register to one or more stock exchanges.
Only stock brokers can directly buy and sell shares in Stock Market. An investor must contact a stock broker to trade stocks. Broker charge commissions (brokerages) for their service. Brokerage is usually a percent of total amount of trade and varies from broker to broker.

3.Stock Trading

Traditionally stock trading is done through stock brokers, personally or through telephones. As number of people trading in stock market increase enormously in last few years, some issues like location constrains, busy phone lines, miss communication etc start growing in stock broker offices. Information technology (Stock Market Software) helps stock brokers in solving these problems with Online Stock Trading.
Online Stock Market Trading is an internet based stock trading facility. Investor can trade shares through a website without any manual intervention from Stock Broker.
In this case these Online Stock Trading companies are stock broker for the investor . They are registered with one or more Stock Exchanges. Mostly Online Trading Websites in India trades in BSE and NSE.
There are two different type of trading environments available for online equity trading.

1.Installable software based Stock Trading Terminals
These trading environment requires software to be installed on investors computer. These software are provided by the stock broker. These softwares require high speed internet connection. This kind of trading terminals are used by high volume intra day equity traders.
Advantages:

Orders directly send to stock exchanges rather then stock broker. This makes order execution very fast.
It provides almost each and every information which is required to a trader on a single screen including stock market charts, live data, alerts, stock market news etc.
Disadvantages:
Location constrain - You cannot trade if you are not on the computer where you have installed trading terminal software.
It requires high speed internet connection.
These trading terminals are not easily available for low volumn share traders.
2. Web (Internet) based trading application
These kind of trading environment doesn't require any additional software installation. They are like other internet websites which investor can access from around the world through normal internet connection.
Below are few advantages and disadvantages of Online Stock Market Trading :-
Advantages of Online Stock Trading (Website based):
Real time stock trading without calling or visiting broker's office.
Display real time market watch, historical datas, graphs etc.
Investment in IPOs, Mutual Funds and Bonds.
Check the trading history; demat account balance and bank account balance at any time.
Provide online tools like market watch, graphs and recommendations to do analysis of stocks.
Place offline orders for buying or selling stocks.
Set alert to inform you certain activity on the stock through email or sms.
Customer service through Email or Chat.
Secure transactions.
Disadvantages of Online Stock Trading (Website based):
Website performance - sometime the website is too slow or not enough user friendly.
Little long learning curve especially for people who doesn't know much about computer and internet.
Brokerages are little high.

Below is the detail comparison of major Online Stock Market Trading websites in India. This comparison is to help investor to take calculated decision while searching for new trading portal.

1. ICICIDirect

2. Sharekhan

3. Indiabulls

4. 5Paisa

5. Motilal Oswal Securities

6. HDFC Securities

7. Reliance Money

8. IDBIPaisaBuilder

9. Religare

10. Geojit

11. Networth Stock Broking

12. Kotak Securities

13. UTI Securities Ltd

14. Angel Trade

Stock Trading Strategy

2009-07-17T21:32:00.000+05:30

The point of trading is to turn a profit, so why put money in a stock that is not moving? Doing so would mean risk without reward. Furthermore, an open position showing a loss should be cut immediately because small losses are the KEY. At TheStockBandit.com, our objective is to expect profits that outweigh expected losses by at least a 3:1 ratio. Losses are a part of the game, so you must respect them and keep them small. Therefore, only get in stocks on the move with the intention to ride them into profits and exit upon the loss of momentum. It is at this point in the trade that we TAKE THE MONEY AND RUN!!
This strategy is best achieved by buying stocks that are breaking out of tight consolidations on an expansion in volume. This type of move in a stock tells us that the previous area of indecision (consolidation or trading range) has been resolved to the upside and money is flowing into the stock (volume expansion). Volume is the fuel that pushes the stock upward once it begins to move. A lack of volume is a lack of fuel, and the move may be short-lived. Be wary of breakout (or breakdown) moves on light volume as they are prone to failure.
Be in no hurry to put on trades. Trades placed out of boredom lead to bad habits and poor results in the long run. This leads to a loss of trading confidence, which is even more damaging than losing dollars!

Over time (weeks, months, years), be absolutely sure to keep your down days and weeks as small as possible. Growing your account happens when you stay in winners while they run, and cut losers at the first sign of negativity. Big winners are not for offsetting big losers. Wealth comes from big winners, so keep the losers small.
Trading Strategy - What is Your Timeframe?
First of all, decide your timeframe for trading. This is important because it not only determines position sizing, but also where to get out of a trade. Stock picks from the Bandit Broadcast are selected because they are set up for initial moves which are ideal for day trading, as well as longer term moves which are ideal for swing trading. Deciding which approach works for you will help you to determine which exit strategy fits your trading plan best.
Regardless of which timeframe you trade, the key is to keep your risk profile for every trade in check. The stocks listed in the Bandit Broadcast stock newsletter are poised for at least an initial move which is ideal for day trading, as well as for an extended move for swing trading.
The following links will take you to the pages which will outline a specific Stock Trading Strategy to fit your timeframe.

Swing Trading Strategy

If your trade timeframe supports swing trading, here is the strategy we implement for our own trades. This may not be the exact way you wish to swing trade, but it is intended as a guide to help you determine a trading strategy that suits not only your timeframe, but also your personality as a trader. If your timeframe is shorter, please see the day trading strategy page for more information.
Swing Trading Strategy:
When swing trading, your position size will usually be smaller than when day trading due to the fact that you are looking for a larger move. Your stop loss orders should be placed wider than when day trading for this reason. Naturally, your profit targets are farther away, so patience is a necessity.

Stocks often gap, so here are some guidelines for swing trading:

• If a stock gaps 1-2%, enter 1/2 of the intended position size and monitor the stock's behavior before adding to the position.
• If a stock gaps 2-3%, only enter 1/4 of the intended position size.
• If a stock gaps over 3%, it may be best to pass on the trade entirely, as the risk/reward profile of the trade is no longer the same.
Here are a few rules of thumb to help determine exits when swing trading:
• If the prior day's low is taken out on the breakout day (or high for shorts), exit the trade.
• Once a trade is held overnight, place a stop-loss order no further away than below the recent consolidation area, as a move beneath it would signal a failure.
• Once a trade is profitable by at least 10%, never give back more than half of the open profit. This helps to avoid the frustration of letting winning trades turn into losing trades.
• Once a trade is profitable by at least 5%, move the stop-loss order to breakeven on a closing basis.
• Partial buys and sells can be very helpful. If a stock breaks out in a sluggish fashion, consider entering only a partial position. If a trade is exhibiting little follow-through after the breakout, decrease the position size.
• Always monitor the health of the overall market, and the health of your positions. When things aren't acting right, either lighten up or go to cash entirely to preserve capital. It's easy to get back in!
These are some general guidelines for any trader with a swing trading strategy to determine exits that fit their timeframe, and are intended for educational purposes as you seek to define a swing trading strategy that suits your needs.

Day Trading

2009-07-17T21:29:00.000+05:30

Day Trading Strategy

If you are a day trader, your position size is likely larger due to the fact you are looking for a smaller move with your short timeframe. Keeping a tight stop is extremely important when trading larger size, as a day trading strategy gives stocks multiple opportunities to work. For day trading, the strategy is rather simple:

• Always keep your profit objective at least 3 times greater than what you are willing to risk.
• Allow no more than a 1% move against you from your entry point. Ideally, you are in the trade beyond the trend line and out of the trade below it. You can always get back into the trade if the stock returns to the buy point.
• If a stock gaps beyond a technical trigger price, the original trade plan is negated for a day trade so a new plan should be made.
• If the futures (Nasdaq and S&P e-minis) make an intermediate lower high intraday (or higher low when trading the short side), exit half of your position. This implies a weakening market and can make it tougher for open positions to continue working.
• If your stock hits a new low for the day (long trades) or new high for the day if you are short, exit the position. A day trade is intended for initial moves, so there is no purpose in widening stops to accommodate a stock moving in the wrong direction. Get out if the stock breaks a low (or high if short) as you can reenter the trade if it triggers again.
• Once momentum fades and buyers are thinning out, take your profit. This can be done by carefully monitoring the intraday chart and the time & sales window for fading momentum.
Our methods
The only way to win the stock market game is to buy stocks when other people are selling and to sell stocks when other people are buying.

Here, you can find new short-term trading strategies to play against the crowd. We are trying to buy or sell stocks one day before the other people do.

Based on the same list but stock selection method is different. The number of trades is less than for basic strategy but return per trade is larger. Quarterly return of this strategy can be lower than for the basic strategy because of smaller number of trades but risk/return ratio is smaller.
Opposite to the Basic Strategy. Based of the list of potentially bearish stocks. A trader holds stock 2 days.
Using Basic and Sell-Short strategies simultaneously.
Based on a special list of bullish stocks. To buy or sell stocks one can use limit or market orders which can be placed before the market opening.