NIFTY, IDFC, IFCI, Heromotocorp and Ranbaxy

As expected NIFTY took U Turn from around 5550. This was evident from huge buying by FII and selling from DII!
NIFTY is moving in the range of 5550 to 6300 for several years now. One day it will break this barrier, but till then this is traders' market and not investors' market. All those who have invested in different Mutual funds looking at the past records must have earned (if at all) lesser than the bank interest rates.

This blog is dedicated to low risk strategies and this is a first week.

Keep selling OTM CALL options of NIFTY. But don't do it together in one go as market might see new intermediate highs. And if it doesn't, anyway you will be in profit.

Sell NIFTY 6300 CALL of August expiry in 22-25 range. Do few lots on Monday.
Sell NIFTY 6400 CALL of September expiry in 32-38 range. Do few lots on Monday and keep on averaging if NIFTY continues upward momentum. There is very low risk in this strategy as chances of NIFTY making new all time top in next two months is very low.

Since FII turned positive, and if NIFTY crosses 5865, there could be further upside for sure. But one has to be very careful, because nothing has changed fundamentally, it seems FII bought primarily only bluechip stocks. Rupee can still go down and cross psychological 60 mark again and NIFTY will not able to sustain new intermediate heights.

Some stocks are may not be affected too much by NIFTY in near future and those are the stocks in news
IDFC and IFCI. The news of banking license will take IDFC to 160-175 range and IFCI will cross 30.

Bull spread strategy
Buy IDFC 130 CALL in the range of 6-6.50/6.60. and sell IDFC 140 CALL in range of 3-3.50.
Maximum loss could be between 5000-6000 and if IDFC closes above 140 at expiry maximum profit potential Rs. 12000 to 14000. Risk reward ratio is good.

More risk takers can buy only 130 IDFC CALL option at 6/- but decide exit point if trades goes in other direction.

Bull spread strategy for IFCI:
BUY IFCI 27.50 CALL around 1.50-1.80 and SELL IFCI 30.00 CALL at around 0.75-1.00.
Maximum loss could be 6000/- and maximum profit potential Rs. 13000/- to 14000/-

In both bull spread strategies of IDFC and IFCI don't forget to book profit if there is more than 10% gain and it is not advisable to hold till expiry.

Heromotocorp:
This stock has crossed ichimoku cloud on Friday. CCI indicator also in buy mode. Next resistance is around 1760.
Buy HEROMOTOCORP 1700 CALL between 28-33,  Maximum loss will be around 4000, hold for target 52/69 for two weeks.

Ranbaxy:
Ranbaxy had lots of problem presently. Buy PUTs.
One can buy 300 PUT in the range of 13-15 or 290 PUT in the range of 9-10. You are bound to get profit.
Those who are really risk averse, must buy 270 PUT at 5/- and forget it, there is high likelihood, when you will remember this option would have become in the money!!


Disclaimer: This blog does not take any responsibility of your profit/loss

IFCI

Today market went up due to short covering, but still there is strong support in 5550/5560 level. Also there was gap earlier which has to be filled in this down trend, it is at around 5525. These are important hurdles to cross for bears.

NIFTY will struggle to cross these barriers before expiry of this month though eventually there is possibility that it cold break it. Due to sudden fall there must be lot of short coverings and also in last two days one can see carry forward positions and hence some buying due to that.

Hold on to old positions for two days. Book profit as soon as you see more than 10/15% gain. Market might move with Rupee direction in near term.

One can buy IFCI 22.50 PUT @ 0.20-0.25.
Low risk of Rs. 1600/- but if stock crosses 21.70 in cash, it will crash, it has no support. Everyday it is falling with volume, did recover little bit today. NIFTY corrected 8% and this stock corrected 50%, if NIFTY corrects further, operators will sell remaining lots of IFCI. This is pure trading recommendation without any in-depth analysis. Low risk and high reward.

Disclaimer: This blog does not take any responsibility of your profit/loss

Few lottery trades for last week

Last few days in this month expiry and if you have generated good profit then few lottery trades.

Buy 45 PUT of JP Associate at 0.20/0.25. Maximum investment 400/- and maximum loss 400/-, unlimited profit potential.
Buy Ranbaxy 300 PUT at 2.50. Maximum investment and loss 1250/- but unlimited profit potential
Buy IFCI 20 PUT at 0.10. Maximum investment and loss could be 800/- but unlimited profit potential.

Choose one or all based on your risk appetite. But invest from the profit gained so far in this month.

This is the time to build good portfolio for medium to long term
Buy HDFC at current levels of 820/830.
Buy GIC Housing finance near 100-102

Disclaimer: This blog does not take any responsibility of your profit/loss.

Rupee movement will drive the market. New ideas AXISBANK and TCS

FIIs are selling and domestic institutions are buying.
It is obvious. If FII buys shares worth USD 100,000 today, Rupee is being traded at around Rs 60 per USD, he will get  shares worth INR 6,000,000. Assume he buys a script A which was prized at 600. He will get 10,000 shares of script A. Tomorrow Rupee slips to 62, even if price of script remains same in value terms his investment in USD will become USD 96, 774. He will lose money, about 3 and half percent. Moreover if stock goes down there will be an additional loss.
Whereas for DII, it is beneficial. If today he buys same 10,000 shares at 600/share it will also cost him 6,000,000. He does not have to calculate future value of 6,000,000. Moreover, if Rupee depreciates, a domestic investor can sell stock and buy USD of same amount to generate 3.5% profit by doing nothing if permitted as business model! In that case, DII does not need to worry still stock slips by 3.5%. For FII, stock must perform better than 3.5% for break even if Rupee depreciates further.

With this, if tomorrow Rupee gives gap down opening at 9 am that will be reflected in opening of stock market at 9.15 am.
So glue to television set and see Rupee movement for first 15 minutes before any trade.

Keep selling real estate, banking. Buy IT, Pharma till Rupee stabilizes. This is no brainer!!!

Hold LT, DLF strategies.
Exit Sunpharma at cost if you could.Or exit if Sunpharma reaches to 915 within next two days.
Exit Ranbaxy option if it goes near 320-315 in cash tomorrow.

In my personal view, NIFTY should able to held at 5620-5610 level till expiry.

Buy Axisbank 1240 PUT at Rs. 15/-. Maximum loss Rs. 3750, unlimited profit potential. Exit if Axisbank goes near 1205-1200 in cash.

Buy TCS 1440 CALL at Rs. 10. If Rupee starts going down TCS again will see 1500 levels before expiry. Maximum loss 2500/-, unlimited profit potential. Exit if TCS goes above 1480-1485 in cash.

For long term:
KTKBANK and Vijaya bank corrected as expected. This is god buying level. Maybe they could go down further by a percentage or two.
Buy Jyotilabs at current level for target of 215.
Buy APTECH if it goes above 64 in cash for target of 85.
Buy TATA GI Beverage if it goes above 155 on EOD basis.


Disclaimer: This blog does not take any responsibility of your profit/loss

New strategies for near term and long term

Market struggled today after Bernanke's speech at Fed.
Big impact on our market, this means there is lot of impact of foreign investors. Rupee is trying to cross 60 and this is panic time. FIIs are withdrawing. When they started withdrawing 10/15 days ago.

Strategy for next two days:
Sell Axisbank future at 1239-1232 and buy CALL 1240 in 15 to 20 range.
This stock is likely to touch 1190 and this is the time to exit both positions.If one could exit within two three days even if stock takes U Turn loss will be very minimum.

State Bank of India.
This is again reaching at buying level. If it goes below 1965 then it will quickly go in the region of 1850-1860. Stay away from SBI for few days for trading purpose but buy for long term near 1900 levels.

Book profit in Ranbaxy, TCS and LT strategies suggested earlier.
Exit SUNPHARMA at cost. Now since news of US case is out, stock might correct from this level to 930-925 level. Exit earlier PUT Buy option trade then.

This is the time to pick companies with good corporate governance and stable management. Invest in these stocks and forget for few months, perhaps for a year. Surely this kind of portfolio will bring better results than bank interest.

Some examples are below:
Buy LT Finance at current level around 80/- for long term. It should reach 135 within next 6 months.
Buy TATAPOWER at current level of 80/- for target of 115 within next one year.
Buy KTKBANK at current level near 135 for target of 175 in next 3 to 4 months.
Buy Vijayabank at current level of 50/-, It does not have much downside potential. It could go up to 42-45 levels but should show at least 20% gain over one year.
Buy IDFC at around 135 for target of 175 in next 6 to 8 months. They are again applying for banking licence and if they succeed, this stock will do very well and anyway it does not have much downside potential from here.
Buy WIPRO at current levels.

Disclaimer: This blog does not take responsibility of your profit/loss

Update and Ranbaxy

Bernanke has not done anything and obviously it seems at least today investors did not like it. Immediately many markets, DOW, Nasdaq, S & P 500, Gold shown down trend.

Perhaps this will continue for next one or two days and reminiscences will be seen in India tomorrow. If this happens, and markets move towards south, it is the time to book full/part profit in all short positions.

Update:
TCS: First target 48 and second 65.
LT: Hols strategy.
SBI: Book profit of 2000 PUT is giving profit of more than 100 points or hold till weekend.
Lupin: Eventually it will come to 880/900 range. Hope it does this before this expiry. But book profit if Lupin goes below 925/930 levels.


Ranbaxy:
Buy 350 Put @ 8-10.
Maximum loss 5000/- but Ranbaxy can slip to 310- 300 levels.  And this trade has potential to give handsome 25 points profit per trade. Target 24/35

DLF: Hold
J M Finance: Hold


Disclaimer: This blog does not take any responsibility of your profit/loss

Hold on to bear positions for two more days.

No adjustments in rates but market did like it seems and went up!  Though market went up, FII were sellers. Surprisingly domestic institutions did lot of buying today.
Hold on to bearish positions. They may still pay off.
Hold SBI strategy, LT strategy.
Set 48 limit to TCS  PUT option suggested earlier.
Hold SUNPHARMA strategy.

Update on old strategies, new strategy for Tatamotors and Cummins in cash segment

Tomorrow could be the day RBI will finally do rate cut expected by the Government. There must be lot of pressure on RBI from all corners for rate cut and it will eventually happen tomorrow. Market should cheer this. One can expect good rally after this announcement.
I am not an economist but major problem before RBI nowadays is of Rupee depreciation. RBI wants to control liquidity in the market. To control further downfall of Rupee, RBI must have swapped sufficient INR in past two days. By doing rate cut RBI could offer that money to banks at lower rates. By doing CRR cut also RBI could allow banks to keep more funds with them and in turn RBI will get rid of accumulated Rupee in past few days with RBI. This seems to be very short term measure and Rupee depreciation will continue after few days. Because money which will flow to banks will again come in to the system and supply of Rupee will again go up. In next 15 days Rupee will again cross 58 mark and FII will start withdrawing.

FII were sellers in cash segment even if market had gone up by more than 100 points on Friday. However, anticipating RBI policy they have bought huge in Future and Option segment. They will start liquidating after Wednesday/Thursday and there is high likelihood that market could again touch 5700/5750 levels very soon.

If Rupee improves investors will liquidate longs in TCS and TCS should touch 1425/1400 till Friday. Set limit 48 to 1460 PUT option.

Exit SBI strategy if SBI goes near 2240 levels in cash. Or at least exit long.
Hold adjusted LT strategy till expiry.

Tatamotors:
Buy Tatamotrs 310 Call June expiry between 1.80-2.15, Target 4.20/6.30
Maximum loss 1800-2000.

Buy Cummines in cash at market price for one month for at least 20% raise from here. This stock is at demand levels and not much further downside expected from here.

Disclaimer: This blog does not take any responsibility of your profit/loss.

Some new ideas for rest of the week

IIP data was not impressive. Now everything depends upon rate cut by RBI on June 17.
Market is having strong support a 5750 level, FITCH revised India rating., all this might result in slight pull back tomorrow, though US markets are down till now.

Some ideas are as below:

Sunpharma:
Sunpharma has to pay half a million USD to Pfizer for pantoprazole settlement, for which enough provision was not there in their balance-sheet, unlike Teva.
Teva made provision of 1.5 mio and they have to pay 1.6 mio.
Sunpharma stock will land first on support around 925. This could be good level to buy the stock for long term!
Buy 980 PUT between 30-32 and book profit at 60-65 level.

Bear spread strategy for Sunpharma
Buy 980 PUT between 30-32 and sell 940 PUT @ 12.
Maximum loss could be 5000/- whereas profit potential of 7000/-

LT
Those who have bought 1400 PUT and sold 1360 PUT, it is advisable to buy LT future around 1400.
This will lock the loss and profit.
Maximum profit could be Rs. 10000/- whereas maximum loss could be Rs. 2500/- If you buy future around 1400 then hold all positions till expiration.

TCS: Adjust target to 48.

Heromotocorp:
Heromocorp has formed double top. It should come down by 100 points before expiry.
Buy 940 PUT of Heromotocorp between 10-14. Low risk of 2500-3000, for target 25-30 within next two weeks. or one can expect stop to close around 900 at expiry.

JM Financial
Buy JM in cash around 28-29 for target 45/- in two months.

Disclaimer: This blog does not take any responsibility of your profit/loss

Update and DLF

Now lot depends on IIP data, inflation data and finally RBI policy on June 17. Market is now in oversold region. Not much down side to be expected from here.

I am still holding LT and TCS.
Look for exit opportunities in LT, today NIFTY took dip of about 80 points but LT managed to close in green. There seems be a lot of strength in the stock and hence risky in holding LT bear position. Normally, it does not happen, it is considered to be high beta stock.
If tomorrow it goes near 1380/1375, it is time to exit.

Hold TCS. It shown first sign of weakness today. Hold SBI strategy till policy announcement.

Lottery stock: Buy DLF 160 PUT @ 0.70-0.90.
DLF has strong support @ 170 region. It should not be broken, but if in case non-favorable RBI policy for real estate, it could go below 170, and then it has no support.
So very good profit potential and risk is only Rs. 700/900

Disclaimer: This blog does not take any responsibility of your profit/loss

SBIN

Market goes up on rumors. So buy on rumors and sell on news might continue this week and early next week. Traders will buy on rumors of good IIP, inflation data on Tuesday June 11 and rate cut by RBI on June 17.

It could even give gap up opening based on global scenario and better unemployment data in US ie more jobs in US for US nationals!! Market can find any reason, when it is driven by liquidity and it if for analyst and columnist to find reason for the same. Also falling Rupee will benefit IT, export oriented Pharma companies, MNC stocks and it will help market sentiments. FII again bought in cash segment on Friday, though volume was low. So best guess is market will move up on Monday.

For bulls to come back, market has to go above 5775 on EOD basis and for bears it should close below 5840 on EOD basis. Any long or short position within the range could be risky. Next trade should be taken on Tuesday after IIP data.


One trade looks promising that is State Bank of India, SBIN.
It is presently being traded near 2015 in cash. After these three events mentioned above it will either go up by Rs. 100 or shall come down by Rs. 100.
So one can buy 1950 PUT in the range of 32-38 and Buy 2100 CALL in the range of 35-40.
If one comes out after all these events ie by next Tuesday/Wednesday, trade will be definitely in profit or in worst case it could be at marginal loss.
Break-even point will be about Rs. 80. Or SBI must close either below 1930 or above 2095 to generate profit at last day of this month's settlement date.
Anytime if trade gives more than 10% profit then it is better to book the profit.


Disclaimer: This blog does not take any responsibility of your profit/loss

No new position on Friday

As expected NIFTY recovered from gap down opening.
Today also most of markets are in red and DOW is in marginal green. NIFTY might give positive opening but shall stay weak till it does not cross 5975 on EOD basis.

Till then it is advisable to hold short positions. Major trend is till down and it will be risky to take counter position.

Hold LT, DLF and TCS with lesser targets, 1375, 188, 1440 in cash respectively. Tomorrow after 2 pm we could see Friday effect. Hence, those like us are holding majority bear positions should somehow manage to held on to those till Tuesday. Market may take confirm downward movement after Tuesday but before that it could go up on hopes of good IIP data, inflation numbers, RIL AGM and last but not least our FM's statement to urge rate cuts!

One can book profit in BATAINDIA and GSK

Disclaimer: This blog does not take responsibility of your profit/loss

DLF

Market may move down, unless RBI announces some descent measures to boost the sentiments. This possibility can not be ignored as last several occasions in recent past, whenever there was slight downward movement in market, either RBI governor or finance minister made some statements and those helped market. So I strongly believe there is not much downside one can expect from here.
Tomorrow maybe gap down opening as today but during the day, it should recover. Today all major markets in world are down but NIFTY managed to end into green. This is positive sign for bulls.

As regards to old recommendations, it is still worth holding LT and TCS till this weekend at least, before we decide whether to book a loss.

Reduce target of TCS to 48 and LT to 55.

Real estate stocks did well today, DLF performed much better than the index.
However, generally stock is in down trend and below is bear spread strategy for DLF. It could lose ground very soon and rest in the region of 185.
Buy 190 DLF PUT at around 6 and Sell 180 DLF PUT at around 3/-
Maximum loss could be 3000/- whereas profit potential 6000/- if DLF closes below 180 at the time of expiry of this month. It is advisable not to hold positions till expiry and book the profit when you gain more than 2% in the trade.

Disclaimer: This blog does not take any responsibility of your profit/loss

BATAINDIA

TCS Update
TCS did not participate in downward trend today. Adjust target to 55.

LT:
Hold for SL of 1445. If it touches 1445 exit all positions. Book profit at 57 in Buy PUT and one can hold 1360 CALL Sell option contract for SL 125 or book profit in the range of 50/55.

BATAINDIA
Buy 860 call in the range of 42-46 and sell 900 call in the range of 25-30. Hold till expiry or till stock crosses 900!
Maximum loss could be around 4250 and has profit potential of about 6000/-

One can buy BATAINDIA in cash segment for two weeks for 5 to 7% gain.


Disclaimer: This blog does not take any responsibility of your profit/loss

TCS

Some of the earlier  recommendations did really well and one should have booked profit.
LT PUT book profit in the range of 67-70.

TCS:
Buy TCS 1460 PUT between 38-40 target 62/63 within next two days.

Disclaimer: This blog does not take any responsibility of your profit/loss

Strategies in LT, ICICI, TATAMOTORS and stocks for cash segment

Market turned down on Friday and such a stiff down side moment was not expected.
One can assign any reason, something is at decade low and something is at year high but it seems on Friday it was simple profit booking day.
FIIs took out 1600 cr in a single day. This was unusual, though in recent days there were some incidences of withdrawal by them it was never in huge quantity.

NIFTY has suddenly reached in the region of 5980. Remember NIFTY turned back three times from 5970- 5930 level to 6100. It could do it again too. Let us not conclude anything on one day drop.

Strategies for June.

L & T
Buy L & T 1400 PUT of June expiry between 45-47.
Total investment will be about 11500/-
To have credit balance in your trading account sell 1360 CALL of LT, June expiry between 85-95. Kindly  do this in limit order as there is not much liquidity in this option contract.
If one could sell 1360 call at about Rs. 90 then there will be credit balance of about Rs. 45/ share ie Rs. 11250/- per lot!

If LT goes down to 1350 level in cash, exit from both trades to gain profit. SL 1450 in cash. It means if LT touches 1450 in cash exit in all trades, there will be about 4000-5000 loss, if it takes 2 weeks to reach 1450.

ICICIBANK

Bear Spread strategy:
Buy 1140 PUT of June expiry at 30
Sell 1080 PUT of June expiry at 11
Maximum loss 4750 Maximum profit if ICICI closes below 1080 will be 10250/-
One need not wait till expiry but can book profit when there is 10% gain.

Tatamotors

Bull Spread strategy:
Buy Tatamotors 310 Call of June expiry @ 16/-
Sell Tatamotors 330 Call of June expiry @ 7/-

Maximum loss could be Rs. 9000 and maximum profit potential Rs. 11,000/-
To have credit in your account Sell Tatamotors 300 CALL of June expiry @ Rs. 6/-
Exit this strategy if Tatamotors goes below 291 in cash.

For cash segment:
Buy GSK at around 2500 for 15 days, and book profit if there is 10% gain.
Buy Britannia at 725 and hold for 15 days,  book profit if there is 10% gain.

Disclaimer: This blog does not take any responsibility of your profit/loss