Dow Jones Bleeds - Will Nifty Arrest The Global Downtrend?

Dow Jones in its last trading session made no attempt to recover from low and kept its steady southwards journey in trade yesterday. It looked almost like a surrender of the bulls to bear hug. That does not augur well for global markets. What spooked US markets which resulted in Dow closing 120 points in red on 28 Oct 2009? Nothing out of the way. Just the same old stuff, same old conditions, same old story. It seems global investors are pulling out money from equity markets and parking it in Dollars. Hence increased demand for dollar and that's how you can see the Greenback rise against all currencies except yen. But wasn't it just the opposite situation last week? There was unambiguous opinion across the planet that dollar was losing its sheen and was likely to depreciate against all major currencies. Well news flows as per market behaviour and not the other way round.

The long and short of all this is that Asian markets are trading deep in red today ie 29 Oct 2009. That sends shivers down the collective spine of bulls in India. With bulls quivering, bears will naturally seize control. That is how the situation would seem to any of us for today's trade. Moreover its expiry day for derivatives today and hence there will be lot of nervousness on the part of traders. However it seems to me that Indian markets will arrest the downward trend in global equities by showing the way up, starting today. News will follow later to justify the move and that is why I can't put a finger to any reason at the moment. All I can say is that the Elliot Wave calculations suggest an upward move from here in Nifty and Sensex. Remember we still have an upside Nifty target to reach at 5280 before this year ends or maybe just at the beginning of New Year.

Whatever be the case it will be nice if you can pick up any or some of the shares suggested below:-

• Punjlloyd buy at 180/185 for a target of 225 in short term.
• Canara Bank buy at 324/327 for a target of 357 in short term.
• DCHL buy at 45/47 for a target of 62 in short term.
• Dena Bank buy at 61/63 for target of 70 in short term.
• Dr Reddy buy at 950 for target of 1050 in two weeks.
• Voltas buy at 141/144 for target of 168 in two weeks
• Crompton Greaves buy between 340 and 350 for a target of 425 in short term.
• IDBI buy at 113/115 for a target of 128 in short term.
• IOB buy at 113/114 for a target of 126 in short term.

Day Trading - Status of 23rd Oct Positions

On 23 Oct 2009 before the Indian markets opened, I had given buy recommendations for six stocks futures. for quick reference visit this link here : http://archana-archdeb.blogspot.com/2009/10/why-day-trade-today-recommendations-for.html

Now let us run a cross check on the status of these positions. Out of the six recommendations one buy price of DLF Oct Fut was not met in trade. For rest of the five positions here is my outlook for each position:-

1. Centurytex Oct Fut. This position had an intra-day low of 488.35 and closed at 493.2. If you have bought around 495 you should be holding your position for next trading sessions. In worst case scenario it will give you 498.5 where you may exit without any injury. But if you are a little brave hearted then you should keep the position for a target of 550 till expiry. Maximum downside risk is 467. This I am advocating because this scrip is still maintaining its swing, and has also completed two long term bullish patterns, viz 'Cup and Handle' and 'Rounding Bottom'. Its actual worth is 920/950 in one year's time.
2. LITL Oct Fut. This position had an intra-day low of 510.3 and closed at 513.75. If you have bought around 513 then you should be holding this position for next trading sessions. You will get an opportunity to exit between 533 and 541. Its actual potential though is 620 in short term.
3. Nagarconst Oct Fut. The position had an intra-day low of 156.95 and closed at 159.2. If you have bought around 164 then you should be holding the position till minimum target of 170. Its actual worth is 220/240 in medium term of about six months because it has completed the long term strong bullish pattern of 'Rounding Bottom'. However before surging to 240 level it may retest the levels between 120 and 140.
4. HDIL Oct Fut. The position made an intra-day low of 370.7 before closing at 375.85. If you have bought around 375 then you should be holding the position till minimum 390. The scrip is worth 500/515 in medium term of six months.
5. Punjlloyd Oct Fut. The position touched an intra-day low of 255.2 and finally closed at 259.55. If you have bought at around 270 then you should be looking to exit at 277.

Why Day Trade Today - Recommendations For 23 Oct 2009

Why didn't I give any day trading recommendations on 22 Oct 2009? Yesterday I had given no recommendations for trading in stocks futures. In fact I had not posted anything and remained just a silent spectator throughout the day. For compulsive traders in the market it will seem to be almost a Herculean task - not do anything on a particular day. But then it is one of the qualities you will have to consciously develop if you want to survive in futures trading over the long run.

I still haven't answered my question.Why I didn't give recommendations to trade futures yesterday was because I was not certain. I didn't like the general sentiment developing across global markets. Whenever there is doubt creeping up in your mind just stay away from market. Let it do whatever it wants to do. The worst that will happen is that you will miss out a profitable trade or two. But then that is erring on the positive. At least this scenario cannot burn a hole in your pocket, nor take your peace of mind away. No sleepless night!

But today is different. The US markets have again taken the lead to show the direction and mind of the markets. Asian markets are pleasantly trading in green at 8.30AM IST and all seems to be fine up above.For day trading, today my recommendations are as under :-

1. Buy Centurytex Oct Fut at 495/500 for a target of 534. If you plan to keep it for tomorrow then this position should give 561 in couple of day's time.

2. Buy LITL Oct Fut at 513/518 for a target of 568. In case you hold the position till expiry then it should give you a target of 588 to 600.

3. Buy Nagarconst Oct Fut at 164/167 for a target of 171.If you plan to carry your position then you can see a target of 171/180 and finally 188/190 being achieved in couple of days.

4. Buy HDIL Oct Fut at 375/380 for a target of 400.

5. Buy Punjlloyd Oct Fut at 270/274 for a target of 286. If not today then you can keep it for tomorrow.

6. Buy DLF Oct Fut at 445/450 for a target of 465. You may plan to keep your position open also for a couple of days for a target of 500 plus

Day Trading Recommendations for 21 Oct 2009

For day trading today ie 21 Oct 09 the following are my recommended scrips :-

1. HDIL Oct Fut. Buy one lot (lot size 774) of HDIL Oct Fut at 375/377 and square off after taking a profit of Rs 10/15.
2. DLF Oct Fut. Buy one lot of DLF Oct Fut (lot size 800) at 447/449 and square off after taking a profit of Rs 15/20.
3. Nagarconst Oct Fut. Buy one lot of Nagarconst Oct Fut (lot size 2000) at 160/162 and cover it after taking a profit of Rs 4/5.
4. ICSA Oct Fut. Buy one lot of ICSA Oct Fut (lot size 2000) at 200/202 and take profit of Rs 5/6.
5. Punjlloyd Oct Fut. Buy one lot of Punjlloyd Oct Fut (lot size 1500) at 276/278 and take profit of Rs 8/10.

Recommended buy prices given above are little defensive in nature. They are not aggressive buy prices because there is need for taking caution today. US markets having closed in red and Asian markets at 9.25am 21 Oct 09 also in red, it is prudent to buy at little lower levels. It may so happen that these buy prices may not be met in trade today. But then that's fine. Day trading also means that on some days you need to sit out and watch the market.

I am yet not giving sell recommendations because as of now the market momentum is still up. So we will respect that, till it is confirmed that sell orders can be safe for day trading in futures. Until then it is better to stay on the buy side of bullish stocks, observing due precautions.

NTPC Stake Sale - Trading action

For entering trade today in stocks futures I had given recommendations on 19th Oct, both for day trading and swing trading. For easy reference please check these two links -

http://archana-archdeb.blogspot.com/2009/10/swing-trade-for-19th-october.html and http://archana-archdeb.blogspot.com/2009/10/day-trading-recommendations-for-19-oct.html

However you may also add NTPC to the list because of the news flow yesterday.

NTPC has been accepted by Indian Govt for disinvestment. The cabinet has agreed for 5% stake sale of this state owned thermal power generation company, the largest in India valued at around Rs 1.7 trillion. Presently Govt owns 89.5% shares in the company, rest being held by the public. In 2008-09 the company had a profit of about Rs 78,270 million to a revenue of about Rs 4,21,820 million. The sale of shares of NTPC could net Rs 86,000 million to the Govt. This sure is sentiment enhancing news and one that could propel the stock northwards in today's trade. So my recommendation would read as follows :-

NTPC OCT Fut. Buy NTPC Oct Fut at 213/214 for day trading. You should target 220 as the initial sell point. However break above 220 should see the scrip sailing to 230 in 2/3 trading sessions.

Day Trading Recommendations for 20 Oct 2009

In the last post I had given recommendations for entry into swing trading when Indian stock markets open today ie 20 Oct 2009. But if you cannot stomach the waiting game while holding position in Futures then the best answer for you is to day trade. So the swing trading recommendations given in the last post ( http://archana-archdeb.blogspot.com/2009/10/swing-trade-for-19th-october.html) can be utilized as day trading opportunities with small profit targets of 3 to 5%.

Apart from that, given below are some more scrips in which you may like to day trade today:-

LITL. Buy LITL Oct Fut at 550/552 for a target of 580/585. You may have to wait for one more trading session for this target.

DLF. Buy DLF Oct Fut at 448 and cover the position at 500. This target may take one more trading session to materialize.

Nagarconst. Buy Nagarconst Oct Fut at 164/166 and cover your position at 174/176. In case you are unable to square off position today then hold for just one more trading session as BTST position.

Swing Trade for 20th October

Today I am going to recommend another bunch of scrips for swing trading This will be our second attempt to trade some scrips who qualify for swing trading. The first attempt gave nearly 40% return on an investment of Rs 1.5 lakhs in 04 days. Check this out through the link here - http://archana-archdeb.blogspot.com/2009/10/culmination-of-swing-trade.html

Today's recommendations :-

Tatapower. Buy Tatapower Oct Fut between 1370/1390 for a target of 1490/1510 in 4/5 trading sessions.

Centurytex. Buy Centurytex Oct Fut at 526/528 for a target of 560/564 in 4/5 trading sessions. In fact you may see the target being met in today's trade itself.

Day Trading Tips : Mahurat Trading

Be prepared for some surprises this Diwali Mahurat Trading. You will need to be careful of sharp volatility. I will be recommending October Futures of few scrips for trading today. But in case you find that your buy position remains open by the end of Mahurat Trading, then you can keep the position for next trading session. What I mean is that you need not panic with your buy positions taken today at my recommended price, in case you cannot exit in profit. Hold them as BTST positions. Here are your trading tips for today:-

Nagarconst. You can buy Nagarconst Oct Fut at 170.5 for taking quick profit of Rs 3/4. The next entry buy point will be 165/166 which you can keep holding for a gain of Rs 10/12.

HDIL. Buy HDIL Oct Fut at 378/382.5 for a target of 390. There is a strong possibility that you may not get the buy price in trade today, but then it is better to be safe than sorry especially while dealing with Futures.

LITL. Buy LITL Oct Fut at 526/530 for an upside profit of Rs 15/20. While going down you can again re-enter at 502/506 and keep it for 2/3 days. Of course you may decide to quit if such a position gives you profit of Rs 30/- plus.

ICSA. You can buy ISCA Oct Fut at 203/207 for a gain of Rs 8/10/-.

Century Textiles. Buy Centurytex Oct Fut at 511/514 for profit of Rs 15/20.

Relcapital. You can buy Relcapital Oct Fut between 907/915 for a profit of Rs 20/25.

Punjlloyd. Buy Punjloyd Oct Fut at 280/282 for profit of Rs 7/10.

Culmination of Swing Trade

Today has been the last trading session for swing trade recommended in my blog post dated 12 Oct 2009. What a swing it has been!!! For quick reference please click the link given below.

http://archana-archdeb.blogspot.com/2009/10/swing-trade-for-12th-october.html

If you have been trading the swing as per my recommendations, then today you must be laughing all the way to your bank. Lets evaluate the performance of the swing trade recommended in the link above. I had recommended buying October Futures of three scrips, viz HDIL, Nagarconst and Asian Paint. Out of these three, Asian Paint could not be bought since the recommended buying price was not met in trade. For the other two scrips lets calculate your total profit from this swing trading strategy as of today, since I had advised you to keep the trade for 3/4 trading sessions.

HDIL. Recommended buy price of HDIL Oct Fut was between 352 and 362. Supposing on 12th Oct you bought your position in HDIL at 357.5 (day low was 357.2) then you would have sold today at 398.5 (day high was 398.95). Lot size is 774.

Profit per share = 398.5-357.5 = Rs 41/-

Total profit = 41 x 774 = Rs 31734/- less brokerage.

Nagarconst. Recommended buy price of Nagarconst Oct Fut was between 164 to 166. Presuming you bought one lot of Nagarconst at 165.5 (day low was165.1) then you would have sold on 14th Oct at recommended price of 179.5, which incidentally was also the day high. Lot size is 2000.

Profit per share = 179.5 - 165.5 = Rs 14/-

Total profit = 14 x 2000 = Rs 28000/- less brokerage.

Grand Total Net Profit = 31734 + 28000 = Rs 59734/- less brokerage = Rs 59000/-

So now you would agree that the swing trade did give you handsome return. Your total capital investment was around Rs 1.5 lakhs and the return on your investment (ROI) was 39.3% in just four days. If you have liked my swing trading strategy then do give your comments and follow my blog for more of such trading insights and game plans. Hope my recommendations continue to enrich you consistently by way of startling wealth creation.

I have also been giving day trading recommendations every day before the start of the market. Please check out today's recommendations or click on the links given below.

http://archana-archdeb.blogspot.com/2009/10/day-trading-recommendations-for-16-oct.html

http://archana-archdeb.blogspot.com/2009/10/taking-stock-day-trading-tips-for-16.html

Happy Trading! Happy Diwali!

Taking Stock : Day Trading Tips For 16 Oct 2009

With the market having closed for today, its time again to take stock of the day's trading recommendations given in the last post before the market opened (http://archana-archdeb.blogspot.com/2009/10/day-trading-recommendations-for-16-oct.html ). Those who traded my tips would have realized handsome profit from today's trading. If you have benefited then my appeal to you would be to post your comment as also to join my blog as a follower. It will give me immense pleasure to know that there are retail investors who are making money from stock market based on my recommendations. So lets now start stock taking of today's proceedings :-

Nagarconst. Recommended buy price of 174 for Nagarconst Oct Fut was not met in trade today. So no profit no loss.

HDIL. Recommended buy price of HDIL Oct Fut was 378/379 . Supposing you bought at 378.5 then you would have covered the position at 398.5 (recommended sell price was 397/400).

Lot size = 774; Profit per share=398.5-378.5= Rs 20/-

Profit= 20 x 774 = Rs 15480/- less brokerage.

LITL. Recommended buy price of LITL Oct Fut was 531/532. Supposing you bought at 531.5 then you would have squared your position at 563 as per target given.

Lot size = 638; Profit per share = 563-531.5= Rs 31.5/-

Profit = 31.5x638 = Rs 20097/- less brokerage.

ICSA. Recommended buy price of 208/209 for ICSA Oct Fut was not met in trade today. So no profit no loss.

Total Net Profit = 15480+20097 = Rs 35577/- less brokerage = Rs 35000/-

Day Trading Recommendations For 16 Oct 2009

In case you are convinced that Sensex and Nifty still have 5 to 10% upside left before correction then do participate in day trading of strongly bullish scrips. But you must be very quick in taking trading decisions during the day and lock small profits. Consider the following scrips for day trading today:-

Nagarconst. Buy Oct Fut of Nagarconst at 174 and book quick profit by exiting around 178. Even with this small target you can make Rs 8000/- since the lot size is 2000. If the scrip comes down to 168.25 you can again buy and exit quickly at Rs 170/171. Finally you can buy again at 164/165.

HDIL. Buy Oct Fut of HDIL at 378/379 for a target of 384/385 and then 397/400.

LITL. Buy Oct Fut at 531/532 for a target of 544/550. In case the scrip shows lot of strength then you can get target of 563 and then 575/579. Going down, the level to enter trade will be 513/514 for quick profit of Rs 10/-.

ICSA. Buy Oct Fut of ICSA at 208/209 for a quick target of Rs 6/10.

Taking Stock : Day Trading Tips For 15 Oct 2009

Market today surprised most of us. From a moderately strong first half an hour, it petered out into a bearish slide. It gained some lost ground in the last hour to close flat for the day. Nifty lost 9 points and Sensex was 36 points down at close. Since the direction of the market was opposite to what was expected, day trading tips given in the last post for today did not do much. In fact the net business would show no profit no loss. Lets evaluate the day's accounts :-

LITL. Supposing you bought at the recommended buy price of 534, the scrip closed at526.7. If you have closed your position then the loss in this position with lot size as 638 should be around Rs 5000/- including brokerage (7.3x638=4657).

HDIL. If you bought HDIL Oct Fut at 378 then there is loss of about Rs 600, including brokerage, from this position as the scrip closed at 377.55 and lot size is 774 (0.45x774=348).

Punjlloyd. Presuming you bought one lot of Punjlloyd Oct Fut at 290 then you would have booked a loss of about Rs 1800 including brokerage. This is because the lot size is 1500 and the scrip closed at 389.

Nagarconst. In case you bought Oct Fut of Nagarconst at 175.5 and exited at 179.5 then with a lot size of 2000, you would have made a profit of about Rs 7700 including brokerage (179.5-174.5=4x2000=8000).

Net Profit= 7700-5000-600-1800= 300. In other words like a flat market closing the account book also closed flat with no profit no loss.

Day Trading Recommendations for 15 Oct 2009

With Asian markets trading in positive territory and US and European markets closed on strong bullish sentiment we are also expecting some decent up move for Indian markets today. In the back drop of this scenario , given below are some of the day trading picks for 15 Oct 2009:-

LITL. Buy Oct Fut of LITL at 534/535 for initial target of 553 and then finally 579.

HDIL. Buy Oct Fut of HDIL at 378/379 for initial target of 390 and then final target of 400.

Punjlloyd. By Oct Fut of Punjlloyd at 290/291 for initial target of 314 and finally 325.

Nagarconst. Buy Oct Fut of Nagarconst at 174/176 for initial target of 180, then 185 and finally at 190.

Happy Trading and Happy Diwali !!!

Sultans of Swing

On 12 Oct 2009 we started on our journey in swing trading through the blog post titled 'Swing Trade For 12th October' (http://archana-archdeb.blogspot.com/2009/10/swing-trade-for-12th-october.html). We still haven't completed that journey since I had suggested to hold the positions for 3/4 sessions and as of yesterday we had completed only two sessions. Today when the markets open in about a couple of hours time we will enter the 3rd trading session for our swing.

So what's the big deal to chronicle all this. There is reason because one of two open positions has already achieved its target. Oct Fut of Nagarconst was traded at the recommended buy price of 165.2 or at worst at 166. Target given was 179.5 for squaring off that position. In yesterday's trade the day high of Nagarconst was 179.5. Those of you who had bought this futures position would have closed your open position. This one position alone must have fetched you net profit of Rs 28000/- in 2 days.

But we still have one open position of Oct Fut in HDIL left. As per recommendation you would have entered trade at 358 and yesterday the position closed at 379.15. Target given for this scrip is 400. In all probability the target should be achieved in today's trading session. In case the scrip fails to reach 400 and you feel it is going to fall, then exit trade without hesitation. The arithmetic is simple. Even at yesterday's closing price you are making a profit of Rs 16000/- plus. Any time in today's trade you fear that the scrip might correct, or you are not feeling comfortable with its movement, just cover your position. You already are sitting in a neat profit of 28000+16000= Rs 44000/-. This profit has accrued in two trading sessions with capital investment of Rs 1.5 lakhs (approx). Wouldn't you agree that Nagarconst and HDIL have been Sultans of Swing!!

So all the very best in today's trading with the open position of Oct Fut HDIL. With global markets having closed in green and Asian markets presently trading also in green you should be able to add at least Rs 10000/- more to your existing profit of Rs 44000. Keep your eyes glued to HDIL.

Taking Stock:Day Trading Tips For 14 Oct 2009

In the last post on 13 Oct 2009, I had given some recommendations to buy Oct Futures on 14 Oct 2009. Now that the market has closed for the day its time to take stock of the day's happening vis-a-vis those recommendations. Throughout the day the market showed remarkable strength with Nifty closing 64 points up (+ 1.27%) and Sensex adding 205 points to yesterday's close i.e. 1.2% up. However even in this belligerent bullish mood, we found some sectors and scrips dipping into red, which was little disheartening. Be that as it may, let us now evaluate the performance of our day trading picks :-

HDIL. Buy for Oct Futures of HDIL was given between 369 and 376. Day low was 373.4, day high was 382.35 and it closed at 379.15. Since the lot size is 774, in the worst case scenario you would have made Rs 2438 (379.15-376=3.15x774=2438). And if you were lucky you would have made Rs 6000 plus.

Nagarconst. Buy price recommended was 165/167 but day's low was 169.1 and so there was no trade. No profit no loss!

LITL. Recommended buy price of 501/509 was not met in trade today since the day low was 516. Again no profit no loss!

Net Profit from day trading on 14 Oct 2009 ranged from Rs 2000/- to Rs 6000/-plus.

Day Trading Recommendations for 14 Oct 2009

If you have missed the boat on 12th October for swing trade then don't be disappointed much. Here I shall be providing day trading advice so that you may join the same trades on 14 October, in case you missed the 12th October swing. In addition I am also recommending something extra for day trading on 14 Oct 2009.

HDIL. Buy Oct Fut of HDIL anywhere between 369 and 376 for a target of 385. If you find the market as well as the scrip displaying unusual strength then you may decide to wait for target of 400 also.

Nagarconst. Buy Oct Fut of Nagarconst at 165/167 for a target of 171. You may also like to wait for 179.5 as exit point, provided the scrip and the market is flexing strong bullish muscles.

LITL. This scrip was not in my swing trading list of 12th October. For day trading on 14th October buy Oct Fut of LITL anywhere between 501 and 509 and look to square up your position at 540. In case you find very strong bullish sentiments prevailing in the market then you may like to wait for a target of 585.

Tracking Swing Trade Recommendations For 12 October

Today's price action has confirmed that the swing is in place for the recommendations given in the last post for swing trade for 12 Oct 2009. Lets track the performance of the stocks futures recommended:-

HDIL. Lets assume that you have taken position today at 358. Position closed at 372.1 after making day high of 376.4. In case you are holding position for target of 400 as recommended, then its fine. But if you have done day trade, you would have profited Rs 14/- to Rs 18/- per share. As the lot size is 774 your intra-day profit should range between Rs 10000/- to Rs 14000/-.

Asian Paint. Day low was 1510 and so missed trade by Rs 10. Hence no profit no loss.

Nagarconst. Assuming you bought one futures position at 165.2, it went to high of 168.4 and closed at 167.3. If you are holding position for a target of 179.5 as recommended, then its good news. But if you have day traded then you would have made a profit between Rs 2/- to Rs 3/- per share. Since lot size is 2000, your profit should range between Rs 4000/- to Rs 6000/-.

Overall Day Profit = 10000+4000=Rs14000/-(minimum); 14000+6000=Rs20000/-(max), less brokerage.

Swing Trade for 12th October

For last two trading sessions I have been giving recommendations for day trading some stocks futures and I hope you have made reasonable money from these recommendations during each day. Today I shall be giving some recommendations for swing trading with targets. However my suggestion will be that if you happen to make considerable profit within the day itself then do take that profit and square off your profitable positions.

HDIL

On 9th Oct I had recommended a buy for HDIL Oct futures at 357 and the scrip made a low of 356.1 before closing at 358.2. In case you had closed your trade on that day then its time to pick it up today anywhere between 352 to 362 for a target of 400 in 3/4 trading sessions. But if you are still holding it then ride it till 400. However if you achieve a target of 386 in today's trade then do grab it with both hands.

Asian Paint

Buy Oct Fut at 1500 for a target of 1700 in 3/4 sessions. However if you can get 1570 in today's trade then do take it.

Nagarconst

Buy Oct Fut between 164 to 166 for a target of 179.5 in 3/4 sessions. You may decide to exit trade if you can get a price of 171 in today's trade.

Day Trading Report Card For 09 Oct 2009

The report card for day trading recommendations given for 09 Oct 2009 in my last post reads as follows:-

1. HDIL bought at end of day at 357 and closed at 357.2. Since it was for day trading, the position was to be squared up with no profit no loss. (Day low 356.1)

2. Nagar Const bought at 164 and squared up between 169 and 172 ie at 170.5. This trade gave a profit of Rs 13000(6.5x2000). (Day low 162.05)

3.Canbk bought at 343 and closed at 342.85 with a loss of Rs 120(0.15x800). (Day low 340)

4.ICSA bought at 205 and closed at 202, giving a loss of Rs 3600 (3x1200). (Day low 202)

Net profit = 13000-120-3600-1000(brokerage)= 8280, say Rs 8000/-

ICSA Oct Fut on both days did give return ranging from Rs 2500 to Rs 4000. But on both these days profit was not taken and finally ended up taking loss at the end of day. Futures' Day Trading lessons need to be drawn from this ICSA trade.

Lesson No 1

If you are day trading with multiple positions of different scrips, and if you have made handsome profit in one position, then protect that profit for the day by exiting other positions which are giving normal profit.This should be done even when these positions may not have reached the targets you have in your mind for them.

So Futures It Is - Day Trade FOr 09 Oct

In my last post on 08 Oct 09 before Indian market opening, I had recommended three future stocks for day trading. Two were on the buy side and one was a sell. The report card reads like this:-

Ambuja Cement. Recommended sell at 96.25 or 100. No trade, so no profit no loss.

ICSA. Recommended buy at 206 to cover at 210. Trade took place but cover target not achieved. The position closed at 205.5 and therefore a loss of Rs 600 (lot size 1200).

BHEL. Recommended buy at 2470 with target of 2500. Trade took place and target achieved with a profit of Rs 4500 ( lot size 150).

Net Profit Rs 3500 approx after taking into account brokerage.

Day Trade Recommendations For 09 Oct 2009

Buy HDIL Oct Fut at 357 for target of 375/386.

Buy Nagar Const Oct Fut at 164 for target of 169/172.

Buy Canbk Oct Fut at 343 for target of 352/358.

Buy ICSA Oct Fut at 205 for target of 211/214.

If Your Future Is In Futures - Then No Options

There are many attributes you require if you want to be a successful Stock Futures' player. You need deep pocket, strong heart, accurate judgement, nimble footed, firmly flexible mind ( sounds oxymoronic !) , et al. But above all these you need Lady Luck on your side. And those who have that, they should not fritter away the opportunity to indulge in the game of stock futures. For such individuals some wonderful opportunities exist as of today which are presented as under. Take a look.

Ambuja Cement

In case initially market shows weakness on 08 Oct 09, then sell Oct futures at 96.25 for an intra-day target of 94. Since lot size is 4124 you can decide to book quick profit at 95 also. The other scenario is that the market shows initial exuberance of Reliance 1:1 bonus share and opens with bullish strength; then sell Oct futures of the scrip at 100 and cover your position at 97.5/98.5.

ICSA

If market opens with bearish look then buy Oct futures at 200.5 and then cover the position intra-day at 210. Since lot size is 1200 you can decide to exit position at 206 also. However if market opens with a bullish flurry then buy at 206 and sell at 210/217. With a little help from the market on 08 Oct 09 you may even see ICSA touch 221.

BHEL

With weak market opening buy Oct futures of BHEL of lot size 150 at 2415 and then cover it intra-day at 2465/2500. On the other hand if market opens on a strong note then buy Oct futures of the scrip at 2470 for a target of 2500/2560. With strong market continuing through the day BHEL may touch 2600 also.

Contrarian Picks - For Risk Takers

Contrarian investing can at times pay handsome dividends, provided it is weighed properly against various considered inputs. The general consensus of the market is not to be discounted but at times you stand to gain immensely by taking just the opposite stance to that of majority of market participants. When financial institutions were falling like nine pins and every shade of investor treated them like lepers, Warren Buffett took a contrarian view. He went ahead and bought $ 5 bn preferred stocks of Goldman Sachs. One year down the line he grew richer by $ 3 bn.

There have been many instances of taking calculated and considered risk by contrarian investors and succeeding with a bang. Laxmi Mittal of Arcelor Mittal fame bought distressed steel plants around the globe when steel as a commodity was in slump and prospects looked bleak. Result of that brave contrarian investment decision is for all to see.

Coming to Indian markets as of now, to my mind there are some distressed stocks one can consider for contrarian investment. It should be done with a view that one is ready to average the same scrips at lower levels and hold for long term if short term view does not work out. Under no circumstances should one discard the stocks at loss if the trade goes unfavourable. Lets see some of these scrip in succeeding paragraphs.

Unitech

Buy the scrip at current market price ( closing price on 06 Oct was 98.75) for initial target of 160 to 180. If trade goes awry then keep accumulating from 83 to level of 60 in small packets and hold till its long term target of 320/330.

Suzlon

Buy the scrip at current market price (closing price on 06 Oct was 87.15) for initial target of 140. In case trade goes in opposite direction then start accumulating from 77 to the level of 70 in small packets and then hold for for its long term target of 320.

Rcom

Buy the scrip at 250 ( closing price on 06 Oct was 268.3) for initial target of 350. In case trade goes in opposite direction then start accumulating from 220 to the level of 180 in small packets and then hold for its long term target of 600.

Nifty - Crystal Gazing for Coming Week

Nifty still looks good for some more upside. That's little odd to say at this juncture what with Dow closing in the red for last four trading sessions. The fall in Dow has been against the back- drop of some bad data released last week. How can you expect consumption in US to rise when the unemployment rate hit 26 year high in September 2009? With confidence ebbing down, liquidity is sure to dry up. So my assessment that Nifty still has some headroom will seem a little out of place. But there are reasons for my foretelling so. Lets take a look of some of the reasons which prompts me to suggest that odds are in favour of bulls for some more time :-

• Though Dow has been falling of late, but it is likely to take support from its trend-line and expected to move up to 10500 level as discussed in my last post.
• Nifty has resistance at 5300 which it should now test.
• Nifty is presently sailing near its supply zone of 5137-5300 which could be used as a Bear-Trap by bulls.
• Such a strong move up has to culminate in a strong sell signal in majority of indicators and patterns which should also include candlestick pattern and maybe an exhaustion gap. We have yet to witness any of that in Nifty's graph.

The correction will take place but it will take place when you least expect it. If Dow despite last week's bad economic data surges towards 10500, then it will be very difficult to stop Nifty from touching 5500.

Dow Jones - Amazing Bull Charge

From the level of sub 1000 in 1971, Dow Jones (Dow Jones Industrial Average) has recorded its all time high of 14000 plus on 11 Oct 2007. In other words Dow has notched up around 13000 points in 38 years, or simply put it blossomed 14 times. That is an average annual return of 36.% which is not bad at all. In this journey northwards there has been some major corrections. Leaving aside a quick and serious dip in 1988, Dow has given overall good returns to its long term investors till year 2000.

Periods of excellent returns have been many but from year 1995 to 2000 Dow went ballistic and notched up roughly 8000 points. This leg of journey saw Dow cover ground from 4000 to 12000. To my mind this has been the most audaciously steep rise in a span of 5 years.

Then in year 2000 it started its tumble and lost nearly 5000 points in 3 years, scaring the wits out of investors with all pervasive climate of gloom and doom. Just when people thought everything was lost, Dow again picked itself up and almost did an encore of 1995 bull run in next 5 years. From year 2003 to 2008 Dow repeated its stellar performance of period 1995-2000. However this time around it managed to notch up about 7000 points, traversing the distance from 7177 to 14279.

No sooner did the 5 year period of joy for bulls got over that we became spectators to one of the worst mauling by bears on Wall Street. In next to no time Dow Jones lost approximately 7800 points. You can remember the ferocious agility when you recall this major index on planet earth lost more than half its worth in about 18 months. Phew! What devastation that would have caused to millions of investors !!

Since Mar 2009 Dow Jones is on a recovery path. In fact it has recovered almost 50 % of lost ground. Now the question that begs our attention is whether Dow is finally out of the woods or not. I am presenting some pointers which may help you to decide for yourself :-

• Last correction of year 2000 lasted 3 years and we have completed only 2 years since this correction began in Oct 2007.
• Bottoming out process is generally a long drawn affair for such a vicious fall. That indicates some more time may be required for Dow to finally recover and surge ahead for another bull charge.
• Already news flow is turning negative in US, showing ugly signs of loss in confidence data.
• 50% pullback to the bear phase means Dow Jones should reach 10360, which it nearly has. So one can expect a fall from level of 10500.

In all likelihood history would like to repeat itself. So you can say that Dow Jones may take another year to fully recover from the bear mauling. Till that time I guess we should be ready to witness another bout of selling which may take Dow down to 6500 level and maybe even lower. In the best of conditions expect Dow to touch at least 8500 level in coming months.

Power of Wind - Coming of Age

In this century, apart from water, we are bound to face tremendous problems in power generation to meet the exploding power requirement? We will have to explore alternative sources to oil for meeting the burgeoning demand. All avenues have to be explored seriously - from nuclear to hydro to even ethanol. I say seriously because that's what the situation warrants. And that is exactly what the West is currently doing - seriously investing mega bucks into developing alternative sources of energy. Why the sudden seriousness? To find answer to that please take note of the following points:-

• US alone has to import oil worth $ 10 trillion to meet its demand over next 10 years.
• US economy can ill afford such ugly oil bill with real economy in tatters and debt situation getting out of control.
• With demand rising the existing oil fields may not be able to cope up with it, which can trigger a runaway oil price situation.
• The Wall Street Journal reported that output from existing oil fields is dropping by about 4.5% every year and by up to about 18% in some of the biggest oil fields in the North Sea, Alaska and the Gulf of Mexico.
• New York Times reported that many of the major oil exporting countries may have to begin importing oil within a decade to meet the rising energy demands from within their borders.

The scenario as sketched above has prompted US President Barack Obama to give Wind Energy a top priority for his administration. US is deftly positioning itself in Wind Energy to be ahead of the pack in the next revolution after IT. Researchers at Stanford University concluded that even if 20% of available wind can be harvested, it will meet the global energy demand seven times over. This is how serious US is about wind energy:-

• Green Chip Review estimates that by 2020 wind capacity in US will have grown by 360%.
• US Department of Energy recently confirmed that 20 % of America's electricity requirement can be met through wind energy by 2030. Presently only 1% is being met through wind energy.
• The wind industry in US is about to explode 20 times.
• New York mayor Michael Bloomberg has unveiled plans to outfit dozens of the city's skyscrapers, waterways and bridges with wind turbines.
• A cluster of wind farms south of Los Angeles will soon supply a large part of its electricity.

With so much seriousness how can the serious investors stay away. Bill Gates has picked up 9% stake in a wind energy company. Also consider the following investments in US:-

• British Petroleum is teaming up with Clipper Windpower to build a 5050 megawatt wind farm in eastern South Dakota.
• The Blackstone group, one of the top US private equity firms, has committed $ 1.6 billion to construct an offshore wind farm.
• Shell and TXU Energy have joined hands to build a 3000 megawatt wind farm in Texas.
• J P Morgan has already invested $ 4.4 billion into more than 40 US wind farms.
  

It seems that wind energy has finally arrived on the scene. Since 1990s cost of generating electricity from wind has dropped by about 80% and it is further getting more and more cost efficient by the day. That is why this industry is growing worldwide at a fast clip of 30% year on year. Experts feel that over next 5 years the number will further go up to 50% per year, thereby generating some $ 300 billion in revenues.

If you believe in this next revolution in offing, then do invest in some wind energy companies for at least 5 years. Returns can be astronomical!