Tweeting stock picks .. using FnO tricks – part 2

Hi there !

Over the last month the markets have seemed to be turning up. And we’ve been trying to do some stock picks of late using simple F&O data analysis with no rocket science:). We have been tweeting these stock picks on twitter.com/myfno,  and oh boy ! are we happy or what –> 8 out of last 10 picks given nice returns.

Just thought we should share these ideas with the myfno community & look forward to your views so we can all build F&O knowledge along the way

If you’ve been following us on twitter, hope you would have liked the below stock picks , if not, there should be more to come to choose from:) Wish us luck !

pics

Just to reiterate & to add a disclaimer here –> we love to design & build great softwares & are NOT in the business of stock recommendation / advisory. We are doing this stock picking purely at a goodwill and to showcase what the power of F&O data could do. 

Tweeting stock picks … using simple FnO tricks

Hi there !

Over the last month the markets have seemed to be turning up. And we’ve been trying to do some stock picks of late using simple F&O data analysis with no rocket science :). We have been tweeting these stock picks on twitter.com/myfno,  and oh boy ! are we happy or what –> 8 out of last 10 picks given nice returns.

Just thought we should share these ideas with the myfno community & look forward to your views so we can all build F&O knowledge along the way

If you’ve been following us on twitter, hope you would have liked the below stock picks , if not, there should be more to come to choose from 🙂 Wish us luck !

Just to reiterate & to add a disclaimer here –> we love to design & build great softwares & are NOT in the business of stock recommendation / advisory. We are doing this stock picking purely at a goodwill and to showcase what the power of F&O data could do. 

Latest pick –>

lets see where it can go
now lets see where it can go from here

RELIANCE

BHEL

COALINDIAJISJALEQS LTFH

CROMPGREAVE

NTPC JSWENERGY


IBREALEST

APOLLOTYRE

Sector Analysis of FnO data – How to see the bigger picture ?

One of the best ways to pick a winning trade is through a top down approach . First identify the sector showing a trade opportunity and then look for the best stock in it.

In MyFnO, we have always strived to figure out how we can deliver that extra edge using F&O data.

And today we are proud to introduce to be seen for the FIRST time anywheresectorTrends
Sectorwise Charts with aggregated F&O data of price, oi, volume, rollover, basis, iv, pcr, delivery
(P.S. avaliable in PLATINUM plan only)

 

Computation methodology used ->

  1. For Open Interest (OI), Future Volume, Delivery, we calculate in Value terms (INR cr) and add up the Total of all the sector components so that they can be compared on a common base.
  2. For others like basis,iv,pcr,rollover we take the Average at any tick point of all the sector constituents
  3. For price we compute a simple average index where the initial price of each stock in the sector is rationalized to base 100

This sectoral data can now be beautifully analyzed across various modules in MyFnO

Our favourite one is the “Trends” page where you can get a clear understanding of the action happening across sectors in one screen all together.  Click below image to see full screen

Sector Trends
Sector Trends

Now you can also see a full Sector Chart for the first time with aggregated F&O data & Technical indicators combined together in one screen !

sectorChart


 

In Markets page , you can also see Sector wise TopX gainers/losers across aggregated sector data like price%, oi% , avg premium/disc %, avg Rollovers % / delivery% etc.

sectorMarkets


In Sectors page itself you can see % changes of various F&O aggregrated parameters across any time frame/interval.. be it Days/week/Month or any custom N days.. or even intraday of 5/10/15/hourly changes. so you know where the action is taking place. You can also use this interval chg in other screens like Markets, Heatmap, etc. whereever applicable

sectorSectors


In Changes page you can see smooth trends with colored heatmap where it is then easy to identify regions of sector weakness/ strengths and turnarounds

SectorChanges

 


In Ranges page you can lookout for sectors where F&O data reaching extremes of the period ranges and especially if there is a gap or divergence of 2 parameters like price & oi

SectorRanges


In Compare page you can actually compare for eg. F&O data like Sector avg Rollover % across ‘monthly’ time frame in a easy to analyse graph

SectorCompare


 

So as you can see there are various ways to see the bigger picture in action happening across sectors. It is all out there for you to see. Just waiting for you to spot it !

Pairs Trading – the art of making profits

What Is Pairs Trading?
Pairs trading (also known as statistical arbitrage or spread trading), has the potential to achieve consistent profits through simple and relatively low-risk positions. The pairs trade is market-neutral, meaning the direction of the overall market does not affect its win or loss.

The goal is to match two trading symbol that are highly correlated, trading one long and the other short when the pair’s price ratio diverges “x” number of standard deviations (i.e. the zscore). If the pair reverts to its mean trend, a profit is made on one or both of the positions.

How to decide on a good pair trade is explained step-by-step in a easy to understand one-page pic –>

pairs


Click on any pair box to drilldown into more details to analyse it furthur->

pairszoom

NOTE: the Buy/Sell signal above implies for the stock ‘A’


Why Pairs Trading?
Pairs trading is a market-neutral strategy that boasts several advantages:

Controlled risk
Since one position is long and the other short, an automatic hedge is created, so even if market or the sector goes down, the losses on the long position will be offset by the gain in the short position.

Profit regardless of market direction
Another attractive feature of pairs trading is the ability to profit whether the market is going up, down or even sideways. This is because the strategy does not depend on market direction, but it’s the relative performance of the two instruments that determines each trade’s outcome.

No directional risk
Because profits depend on the relative price change between the two instruments, rather than from the direction in which each moves, directional risk is removed.


What are the risks involved ?

No strategy can be without risks, else it would be a money-making machine.

What we are trying to bet on is that if a stock outperforms relative to the other, and they generally have always moved together in the recent past, the underperformer should eventually catch up towards the mean & we could make a profit.

But what if the outperformer continues to outrun the other stock because of some specific news or event in that stock? So we must have stop losses in case the crossing of our SD line continues to break through & run away.

And that is why if you observed in our pic above.. the buy /sell signals which the MYFNO.com app auto-generates are only after the ratio AFTER crossing outside the 2SD lines comes BACK inside the band .


Will suggest you to first get confidence in this concept , by trying out some paper trades before actual venturing into real trading . You can also track the pairs you identify to a favourites Pairslist in the myfno app or even enter dummy trades to track in the its portfolio module. All tools in one app 🙂

So happy pair trading  !!

The PutCall graph – finding the option strike tipping point

The PutCall data at various strikes if seen as bar graphs ( especially the ‘change’ data) can give a birds-eye view of how the open interest is building up across Put/Calls at various strikes / expirys and where the buy-sell pressure should take place at which tipping point .

all explained in our one-pic selfies –>


putcall

 

 

 

putcallchg

markets look to sustain now & can rise from here as the putcall ratio seems to be turning up again ! 🙂

Powerful Alerts – F&O + Technicals in one screen !

We’ve now built a powerful yet simple ALERTS screen in myfno.com (under the ‘INFO’ menu) where you can get important alerts of F&O indicators +  Technical signals together in one screen during the live market also 🙂

  1. High/Lows (day/week/month/year) for F&O data like
    Price,  OI (Open Interest) , IV,  Basis,  Rollovers
  2. Volume spikes , bulk deals in futures/options
  3. Long/Short buildups
  4. Rankings changes,
  5. Technical signals –  MACD / Stochastic / RSI  etc.
  6. Candles – ( buy /sell patterns )
  7. Moving averagecrossovers /breakdowns )
  8. Trend reversals ( small/medium/long term)
  9. Pivot levels cross ( support/resistance levels)
  10. VWAP levels (above/below cross)

alerts

You can see these alerts filtered for any scripgroup/sector/watchlist

You can also show alerts just for Stock only (summarized F&O data of all 3 month contracts) or even individual contracts of Futures / Calls / PUts by pressing their respective underlined letters or choosing under the ‘Show’ menu

You can also customize your view to just show your specific set of alert categories.  This can be done by clicking the  + / –  buttons besides the category header to add/remove 5 rows at a time. and then you can save this view for re-use

Finally, you also have the power to do a quick find in the ‘find box’ by typing words to match in the set of alerts displayed eg.

  • you can type ‘year‘ to display only yearly high lows or
  • you can type a symbol say ‘ACC‘ to see all recent alerts of this stock or
  • type ‘cross’  to see all crossovers