5 stocks for next week-April 9th-13th 2018

5 stocks for next week-April 9th-13th 2018
by Gautam Upadhyaya 04/06/2018

1)Titan Ltd - Buy

Stock

Titan Limited

Recommendation

The stock is trading in a strong higher top-higher bottom chart structure. Tracking the hourly chart, the stock has given a falling trend-line breakout backed by a strong uptick in volumes, indicating continued upward momentum.

Buy/Sell

Range

Target

Stop Loss

Buy

931-941

1,005

899

NSE Code

Market Cap (in Rs cr)

52-week High /low

200-day EMA

TITAN

83,500

963.15/1,460

738


 

2) Hero Moto Corp Limited – Buy

Stock

 HeroMoto Corp Limited

Recommendation

The stock has resumed its upward journey and has restarted trading in bullish higher top-higher bottom chart structure on the daily chart. It has also given a channel breakout with rising MACD histogram, indicating a positive bias for the stock.

Buy/Sell

Range

Target

Stop Loss

Buy

3,750-3,780

3,900

3,665

NSE Code

Market Cap (in Rs cr)

52-week High /low

200-day EMA

HEROMOTOCO

75,500

4,200/3,180

3,612



3) Berger Paint Limited - Buy

Stock

Berger Paint Limited

Recommendation

The stock has given a bullish flag pattern breakout on the daily chart. Tracking the ADX index, +DI is trading above the 25-mark and is greater than the ADX and –DI line, hinting a continuation of the upward momentum.  

Buy/Sell

Range

Target

Stop Loss

Buy

263-266

284

255

NSE Code

Market Cap (in Rs cr)

52-week High /low

200-day EMA

BERGEPAINT

25,800

285.75/230.8

250.2



4) SunTv Limited - Buy

Stock

SunTv Limited

Recommendation

The stock recovered from its recent low by forming a bullish hammer candlestick pattern on the daily chart. It has also given a price breakout above its 200-day EMA, indicating a positive bias going forward.

Buy/Sell

Range

Target

Stop Loss

Buy

880-890

960

851

NSE Code

Market Cap (in Rs cr)

52-week High /low

200-day EMA

SunTv

35,200

1,097.05/652.3

868


 

5) Balkrishna Industries- Buy

Stock

Balkrishna Industries Limited

Recommendation

The stock is trading with a strong uptrend and has managed to give a bullish symmetrical triangle breakout on the daily chart. Tracking the ADX index, +DI is trading above the 25-mark and is greater than the Adx and –DI line, hinting a continuation of the upward momentum. 

Buy/Sell

Range

Target

Stop Loss

Buy

1,205-1,225

1,290

1,158

NSE Code

Market Cap (in Rs cr)

52-week High /low

200-day EMA

BALKRISIND

23,500

1,236/1,002

982


Research Disclaimer

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Significance of having a flexible financial plan

Significance of having a flexible financial plan
04/06/2018

A financial plan is the key to achieving a financially secure future. A financial plan accounts for all of your long-term and short-term financial goals. However, as life is uncertain, your financial plans can be negatively affected by events that are out of your control. Because of these unexpected circumstances, having a flexible financial plan is of utmost importance.

While you cannot control the impact of these events on your financial plans, what you can do is make the latter flexible enough so that the impact is mitigated.

Here are some reasons to have a flexible and adaptive financial plan:

Can factor income change in investments

Everyone hopes to receive a constant rise in their overall income each year. However, the main problem with this increase is that it is unpredictable. You can switch jobs after some years with a higher salary than the previous job was giving, or rent a portion of your house. If your financial plan is flexible, you can invest the extra income towards your investments and can earn more returns. Higher returns will eventually result in securing your financial goals in a lesser amount of time.

Can afford medical emergencies

Every financial plan requires you to consider your health. However, it is entirely possible that while creating the financial plan, the amount of money you thought would be enough for a medical emergency turns out to be inadequate. You have to keep in mind that there is also a fair possibility that you or a family member can be diagnosed with a disease that results in huge treatment costs. This is where a flexible financial plan helps you minimize financial burdens like huge hospital bills.

Mitigate socioeconomic volatilities

Far from our ability to control are the economic and political changes that occur over time. Government policies like interest rates, direct and indirect taxes, and unexpected policies like Demonetisation can negatively affect your financial plans.

For most people, financial plans are based on the assumption that they will earn a particular return on their investments. However, government-introduced changes can prove these assumptions wrong.

Keep up with inflation

One of the most disastrous and continuously changing factors affecting any economy is inflation. Inflation undermines the value of money as it increases the price of products and decreases the purchasing power of a currency. This jeopardizes the whole idea of having a financial plan.

The best way to minimize the effect of inflation is to pump more money into your investments over time, i.e. increase the amount you’re investing over time.

Brace through uncertain life events

Life is full of surprises, both good and bad. Apart from the ones mentioned above, many other factors can have a big impact on your financial plans. Events like the birth of your children, their education, and their marriage can also create a financial burden on you. It is possible that your child goes to a foreign university for his college. In such situations, you would have to spend more money.

Whatever life throws at you, you can tackle it with a flexible and adaptive financial plan. You can make different funds for different needs and a rainy day fund for other emergencies. This way, you ensure that all headwinds are braced with tact.

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Basic Money Mistakes Every Individual Makes and How to Avoid It

Basic Money Mistakes Every Individual Makes and How to Avoid It
02/07/2018
Untitled Document

"Your salary has been credited to your account." Who doesn't get excited about this message? But remember, a wise man once said that it's not your salary that makes you rich, it's your spending habits. You live life king size in the first week of the month. By the time it's the last week, you tend to survive on the bare minimum. Your happiness can turn into financial mayhem if you are not careful about your money habits. Here are four common money mistakes that you can avoid.

Living beyond your means: It is said that rich people stay rich by living like they are broke. And, broke people stay broke by living like they are rich. Today, each one of us is living a materialistic life. It is believed that the more you own, the more successful you are. The state is such that people have started resorting to loans for living as per the societal standards. However, this is an ill-advised way of living and would lead you to a financial mess. To avoid this, you should stick to a budget. The 50/20/30 rule may help. As per this rule, 50% of your monthly income must be for your monthly expenses, while 30% can be kept aside for your entertainment and leisure. And, you must save and invest the remaining 20%.

No robust retirement plans: Death is certain and so is retirement. Have you saved enough for your old age? Saving for the recurring expenses from your peak working days could be your best bet. Start keeping aside some percentage of your hard-earned money for your future, and let the compound interest do the miracle for you. Many in the organized sector have the privilege of getting retirement plans from their company. Make the most of it by contributing as much as possible.

Not saving for emergencies: Life is full of surprises- good and bad. If preparing for good times is necessary, be prepared for tough times, which are inevitable. Without any financial support, you are more likely to fall prey to high-interest loans. Thus, having an emergency fund is like having a cushion that can act as a buffer until the time you get back on your feet.

Emotions-driven investing: Investing based on the daily headlines could be troublesome. A glad tiding may make you want to invest without a lot of thought. On the other hand, an unfavourable news may make you panic and run away. Either way, you may lose out on opportunities. Emotions may either cause you to take more than you can handle or could deter you from doing something that is beneficial for you. Thus, it is advisable to keep emotions and money matters separate.

Conclusion: Managing money could be a tricky affair, especially when you are at the start of your career. To err is human. But not learning from the mistakes can be devastating. Use these tips and avoid making these basic money mistakes in your daily life.

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How can I invest in Indian stocks as an NRI?

How can I invest in Indian stocks as an NRI?
03/07/2018

With the rupee’s strength dwindling in comparison to major foreign currencies, non-resident Indians (NRIs) may look at investing in their home markets in order to reap high returns. If you are among these NRIs looking to capitalize on the falling rupee, all you need to do is follow the below steps:

Eligibility

First of all, you must find out whether you are eligible to invest as an NRI. By definition, an NRI is an Indian citizen who -

  • Has been in India for less than 182 days in a financial year
  • Has been in India for less than 365 days in the past 4 financial years

Once you have figured out your eligibility criteria, you can get down to the brass tacks.

Step 1: Opening an NRE (Non-resident Rupee)/NRO (Non-resident Ordinary Rupee) savings account

An NRI has to open either one of these accounts to be able to invest in the Indian markets. The major differences between the two accounts are as follows:

Parameters

NRE

NRO

Repatriation

All funds along with interest earned may be repatriated without paying
any tax on the interest amount

Only $1 million may be repatriated per year, including interest

Tax Treatment

It is tax-free

It is subject to Income tax, Wealth tax, and Gift Tax

Joint Holding

Only NRIs may jointly hold this account

Both resident Indians and NRIs may be joint account holders

 

Step 2: Get a PIS permission letter from the bank

PIS (Portfolio Investment Scheme) permission letters allow NRIs to purchase/sell shares and debentures under the Portfolio Investment Scheme. It stands as an approval from the Reserve Bank of India (RBI) to invest in the stock markets. The bank where you open your NRE/NRO savings account takes care of this process.

Step 3: Open a trading & demat account, connect it to the PIS

Finally, you will need to open a trading and a demat account to start investing. The following documents are a must for opening the accounts:

  • Copy of PIS permission letter
  • Copy of FEMA (Foreign Exchange Management Act) declaration
  • Copy of PAN card
  • Overseas address proof – (driving license/foreign passport/bank statement (not more than 2 months)/notarized copy of rent agreement)
  • Passport size photograph
  • Proof of bank account (cancelled cheque leaf of NRE or NRO savings bank account)
  • Declaration of P.O. Box in your residing country
  • FATCA (Foreign Account Tax Compliance Act) Declaration Form

Note: Copies of PAN card, passport, the power of attorney, and foreign address proof must be notarized by the Indian Embassy, the Consulate General, or through a public notary in the NRI’s country of residence.

Step 4: Trading

  • To begin trading, you must first allocate funds from the NRE/NRO bank account to the PIS
  • The bank notifies the brokerage firm about the allocated funds. These funds are then updated to the trading account
  • Upon purchasing a stock, the brokerage firm sends the buy contract note to the bank at the closure of business. The bank then debits the PIS account and credits the firm
  • Similarly, on selling a stock, the brokerage firm sends a sell contract note to the bank at the closure of business before crediting the PIS account with the proceeds.

Preferable avenues for investment

  1. Real estate: NRIs can only invest in commercial or residential properties. Proceeds from the sale of agricultural land, etc., must be deposited in an NRO account
  2. Direct equities: PIS account is mandatory for investment
  3. Term deposits & NCD: A safe and viable option for risk-averse NRIs
  4. NPS: Ideal for those retaining their Indian citizenship and planning to come back
  5. Mutual funds: These do not need a PIS account for investing, but FATCA rules impose certain restrictions on US and Canadian citizens

Do remember!

  • You cannot hold more than 10 % stock in any listed Indian company
  • For short-term capital gains (STCG), a taxation of 15% is made on any gains on stocks sold before 1 year
  • For long-term gains on stocks held for more than a year, profit on which is less than Rs1,00,000 the tax is exempted
  • To map both NRE/NRO accounts with the trading account, you need to get two client IDs from the broker
  • Profiting from the F&O segment is considered as business income according to the Income Tax department

Happy Investing!

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Secrets of successful trading

Secrets of successful trading
01/08/2018

People who are new to stock markets are often enthusiastic about trading and look for quick and easy ways to become rich. These factors usually restrict their understanding of the market, and they lose out on tactics of trading. Below are ten trading secrets for the newbie traders.

1. Limit the capital investment

Most of the beginners are eager to earn quick money. They have a perception that investing a lot of money during initial days can help them earn money. The most valuable tip for any beginner is that he should spend a limited amount of money as capital initially. It is better to set a percentage limit to the capital invested in one company or trade.

2. Do not expect early profits

The mindset of most of the beginners is to earn short term gains. It acts as a hindrance in rational decision making. Hence, beginners should make sure that they carry the right attitude for trading, not expecting quick profits.

3. Keep a trading journal

Staying updated with recent events and news is essential in the stock market. Trade journals are the best source for gaining knowledge. A trader should get into the habit of reading these journals and relate them to their daily trading.

4. Risk analysis

Risk analysis is critical to evaluate which stocks or securities should an investor invest in. Beginners tend to give less importance to risk analysis. Hence, they are not aware of the impact of loss in trading. It is imperative for traders to understand risk management right from the very beginning so that they can hedge losses.

5. Invest time to understand different techniques

People who start to learn trading are familiar with limited techniques. They become complacent with this procedure and fail to learn new methodologies. To be a successful trader, it is a must to evolve different skills and techniques.

6. Avoid penny stocks

Penny stocks are traded on the stock exchanges and provide high return along with high risk. These stocks have a small market capitalization and lack liquidity. New traders should be cautious of these stocks as they can easily get tempted to buy these stocks in order to earn high returns.

7. Control over emotions

It is very common for beginners to get carried away by emotions. It restricts their rational thinking and they lose focus on their trades. One needs to be in control of emotions irrespective of profits or losses.

8. earn the basics first

A lot of people start trading without actually knowing the basics of the stock market. They are not aware about how the market functions. Lack of knowledge narrows the focus of trader to a single strategy which he is aware of.

9. Avoid leverage

It is always advisable to not use the leveraged money (borrowed) while investing. It increases the price of trading and limits the understanding of the trader.

10. Diversification

Diversification is the process of investing in different instruments in order to minimize risk. It is useful for beginners who lack knowledge about specific sectors. It is always wise to diversify your investments across different sectors and industries. 

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How long should long-term be in investing?

How long should long-term be in investing?
02/08/2018

You would have often come across advertisements suggesting that lazy vacations or travel abroad is possible through long-term investments. They might be a lucrative option for many, but most people would still be confused by what constitutes a long-term investment? Investing in order to take care of the expenses of a marriage may take 5 years, while investing for a house may take 15 years and children’s college fees can possibly take nearly 20 years. All these are examples of long-term investments of varying lengths.

The textbook definition

For taxation purposes, investments in listed stocks and equity mutual funds are considered to be long-term if the holding period is more than one year. The holding period is defined as the period from one day after the investment has been made to one day after the investment has been encashed.

The ground reality

Going by the book, any investment above one year is a long-term investment. However, this definition could be quite inadequate for practical purposes. Most investors would look at a long-term investment as a way to even out losses and maximise gains. In fact, long-term investments are preferred because they help us to ride out the investment cycles and achieve parity, if not profit.

The bottom-line

Most analysts would agree that a better definition of a long-term investment would be “An investment that has a higher probability of maximising returns over a 10-year period as compared to alternatives.

To support this, you can draw upon some hard-hitting research on the basis of BSE data. Using this, you can also find a median which you can use a benchmark.

Before you begin, let’s take a couple of parameters into consideration-

  • Growth isn’t permanent. Disruptive companies continue to create ripples until bold becomes the new normal.

  • When things get worse, they usually don’t stop until they hit rock bottom. Rebounds are rare.

  • All data considered are for capital aggregation investments. Income generation schemes such as bonds, debentures, etc are not as influenced by time, as by interest rates.

  • FDs and other fixed return investments are not dependent on time as well, and so are ignored.

  • Let us first define some popular investment return targets. Let us choose the figures for 8%, 10%, 12%, 15%, and 16.2%-the last one being average market return for last 33 years.

  • The data taken into consideration uses month-end values for Sensex from April 1979 to October 2012. 

The probability of achieving these returns within a time period comes to something like this:

Year

Probability of achieving 8% returns

Probability of achieving 10% returns

Probability of achieving 12% returns

Probability of achieving 15% returns

Probability of achieving 16.2% returns

3

36%

58%

53%

50%

48%

4

31%

64%

59%

53%

52%

5

29%

68%

63%

56%

53%

6

23%

72%

66%

61%

59%

7

21%

76%

74%

66%

62%

8

20%

78%

74%

67%

61%

9

19%

78%

76%

68%

64%


The six-series’ mentioned in the graph are in order of the six rates of investments that have been set as targets.

This takes into consideration some high-performing and a low-performing stock. And as can be seen from our initial premise, the investments top out around the 10-year period.

Statistically speaking, a period of more than 10 years may be considered only for academic interest as a decade is really as far as you can see.

From analysis, you can notice the following facts-

  • The high-performing stocks started to peak after the 5-year mark.

  • They continued an appreciable rate of growth till they crossed the 7-year threshold.

  • After the 7-year threshold, they flattened out to a plateau.

  • The low-performing stock, on the other hand, continued to drop steadily.

  • The dip became more and more pronounced after the 7-8-year time period.

  • Thus, you can take an optimum measure of the 6-7-year period as the best median in which to invest for the “long-term”.

In general, a 10-year cycle would help us to reach a plateau after which our stocks’ value would either fall or remain constant. Within this phase, it’s better to cash out in the 6-7-year period and invest in the next big thing.