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.