Thursday, March 31, 2016

Profit Realized - SBI Apr Futures

We have again got it right on target. In yesterday's post I had advised you to exit SBI Apr Futures within the first 30 mins of trade today. Check the blog post here.  I think we all could exit this position around 198.

In today's session SBI Apr Futures opened at 198.45 and it made a day high of 199.3, which makes me sure that all could at least exit near 198.

Time to calculate profit. We bought this lot of SBI Apr Futures at 190 ( check my recommendation here) and sold it at 198.

Profit from one lot of 2000 shares costing Rs 75000/- is (198-190= 8)X2000 = Rs 16000/- This trade has given Return on Investment as 16000/75000X100 = 21.3% in 4 trading sessions.

 For the moment let us wait and watch how things pan out in the markets. Today derivatives March expiry trades have been executed and tomorrow will be a fresh start with April contracts.

Tomorrow we will not enter trade. But if SBI Apr Futures is available at 186/188, then we should go ahead and buy it.

Wednesday, March 30, 2016

SBI Swings to Victory - Has Vijay Mallya Helped?

In today's trading session you have come out victorious after enduring tough conditions and some scary moments.

In last post I had assured you that there was no cause to worry about one position of SBI Mar Futures bought at 196. I had also asked you to square this March contract at 197/198. 

Well today SBI Mar Futures reached a day high of 198.7

By squaring off one lot SBI Mar Futures you have realized a profit of Rs 4000/- since it was bought at 196 and sold at 198 and the lot size is 2000.
That is not all. Icing on the cake is position of SBI Apr Futures we had picked up as recommended in this post. We bought this position at 190 on 28 Mar 2016.

Today SBI Apr Futures closed at 198.7 and this means that this position is presently offering you an unrealized profit of (198.7-190 = 8.7) X 2000 = Rs 17,400/-

I think we need to lock in such profit at the earliest. So now my recommendation is that as markets open tomorrow we should exit this position within first 30 mins of trade.

I wonder what gave fillip to banking sector in today's session. Could it be promise of Vijay Mallya to return Rs 4000 crores to banks by Sep 2016? Yes I do wonder!

Tuesday, March 29, 2016

Markets on Uncertain Grounds - Traders Should Buy Dips

Volatility has come swooping down on Indian markets.

But I think that is good news for traders. As things stand, every dip should be bought. There is every reason why you should be on buying binge.

What should you buy? I think banks are going to give good returns if you buy the dips. Reason is not far to seek. RBI is most likely to cut rates by at least 50 basis pts.

Expectation of our Finance Minister is also that the rates should be lowered by RBI. And when Arun Jaitley expects something, RBI Gov is most likely to deliver accordingly..

As for position of one lot SBI Mar Futures held, do not despair. It was bought at 196. Check here
This position should be closed at 197/198 by Thursday.

However keep holding the position of SBI Apr Futures which we bought on 28 Mar 2016. This position was taken as per my recommendation given on 23 Mar 2016 in this post. One should hold this position for a target of 205.

RBI Monetary Policy Review is on 05 Apr 2016 and rate cut is what will give boost to banks. Let us wait and see what Raghuram Rajan does to propel banks and Indian economy in this coming RBI Review Meet.

Wednesday, March 23, 2016

SBI on Track to Target and Beyond

Today Indian Markets closed flat, and so did SBI. Although SBI closed a trifle in the negative territory, it still is on course to target of 202. So do not panic.

I am asking you not to panic because with global markets in some kind of uncertainty, you might find SBI touch 190 level in intra-day trade. But just don't bother. In fact if that does happen it will be an opportunity to pick up one lot of SBI April Futures.

I am asking you to pick up one lot of SBI April Futures near 190 because expiry of March Futures will take place on 31 Mar 2016. In case SBI does not fall down to 190 level then just sit tight and book profit at 202 in one lot of SBI Mar Futures that you are holding.

The other scenario is if SBI opens on Monday with a gap up and closes near 202. Then be sure that SBI is going places. Then we may even see SBI trade at 220 on expiry day.


Tuesday, March 22, 2016

SBI Still Swinging Up - Hold For Good Gains

In my yesterday's Post I had recommended you to buy SBI March Futures at the opening price available at market opening. I believe you would have bought at 196 or thereabouts.

If you have bought at 196, then you would be sitting on some unrealized profit. Today SBI March Futures closed at 197.65. One lot of SBI March Futures containing 2000 shares would have costed you about Rs 80,000/-

So your unrealized profit in today's trade from one lot of SBI would be (197.65-196= 1.65)X2000 = Rs 3300/-. Keep holding your position till given target of 202, which was mentioned in yesterday's post.

Keep enjoying the swing in SBI March Futures!

Monday, March 21, 2016

Swing in Place - Did We Miss SBI Move Today?

In my pre-market opening post today, I had indicated that SBI is ready for further gains. But while giving a buy price to re-enter SBI Mar Futures, I became extra cautious. I wanted an entry at 184.5/185.5. That was not to be!

SBI did not breach 192 on the lower side in today's trade. So I have to accept that we missed a wonderful opportunity to profit, even after predicting the move correctly. It happens when you are ultra cautious and want to enter trade at day's low.

Well be that as it may, the important question that begs an answer is - what now? I would suggest that tomorrow also go long in SBI Mar Futures for a target of 202. Swing is visibly in operation, so just go ahead and buy SBI Mar Futures at opening price that you get.

SBI Looks Good for Further Gains - Buy on Dip

Banking pack is looking good to go further north. Leader of the pack is surely SBI. As I had mentioned in my earlier post that SBI may reach 200. Check it out here in the last paragraph.

But it is important that you exercise some caution. It will be prudent to buy at dip. Some cooling in prices will make this fresh entry a very compelling buy.

So look for entering SBI March Futures at 184.5/185.5. This will ensure that even if market turns negative, you will certainly get a profitable exit when you enter at this conservative price.

The other stock which looks appealing to buy, from swing point of view, is Ultracemco. This stock closed at 3119 in Mar Futures and seems ready to go beyond 3150. You can consider buying Ultracemco Mar Futures at 3100 for target of 3155.

Saturday, March 19, 2016

Target Achieved in SBI - Time to Assess Profit

Remember I told you last Tuesday to buy SBI Mar Futures at 184/185 in this post. In this post I had mentioned that SBI was the right candidate for swing trading.. I had given the target as 190.

Yesterday, I had revised the target to 189.5. Check it here. Frankly speaking I had revised the target down because in yesterday's trade SBI reached a high of 189.7 and then dropped like a ton of bricks to day low of 184.5, which was a bit unnerving. I did not want a repeat of what happened yesterday and hence gave a conservative revised target.

Now lets analyze as to what happened to SBI in today's trade. SBI Mar Futures opened at 186.5, made a day low of 185.7 and then went on to make day high of 191.4, finally closing at 190.8. If you had closed your position at 189.5 as recommended yesterday, you still would have made a good profit in three days.

Profit Calculation

Bought at 184.5 , Sold at 189.5
Lot size : 2000 shares
Profit =  (189.5 - 184.5 = 5) X 2000 = Rs 10000/-

This profit has been achieved in three trading sessions with capital investment of Rs 80000/-. Hence Return on Investment (ROI) is 12.5% in 3 days. This the power of swing trading.

Thursday, March 17, 2016

SBI Erazes Day's Gain - Are We Still Good to Reach Target?

What a dramatic last hour of trade it was? Everything that was achieved through the day's trade was just washed away in the final leg. The swing that SBI was enjoying for the last two days was blown away.

Though SBI closed flat compared to last trading session, it is with a heavy heart that I have to announce that the dream of seeing today's close near 190 has vanished. If not for the last hour of trade, SBI would have closed near 190.

Why I am so insistent on 190 - you may well ask. Because a close near 190 would have ensured that the swing strengthens. This in turn would have signaled that the target gets extended to 200+. I had already mentioned it in my last post.

Well all is not lost. But now we need to be careful though. Exit your trade at 189.4 if tomorrow's opening is not strong. But in case you are lucky to get a gap up opening near 190 then wait for the extended target of 200 to book profit

Wednesday, March 16, 2016

Swing in Place for SBI -Target in Sight

Those who bought SBI Mar Future at my recommended buy price of 184/185, would be sitting pretty. Yesterday I had given this call in my last blog post.

If you had bought just one lot of SBI Mar Future at 184.5 (average of the buy range given), you would be happy with the closing price. In today's trade SBI Mar Future closed at 185.9 and thankfully near its day- high. Since there are 2000 shares in one lot, you are presently sitting on an unrealized profit of 2000 X (!85.9-184.5) = Rs 2800/-

For this call I had given a target of 190. Let us see what happens tomorrow. Lot depends on what happens to Fed rate decision which will be taken at US Federal Reserve meet tonight.

Read very carefully what I have to say now. Following scenarios may develop tomorrow in trade :-

  • If SBI opens with a gap up, then target of 190 will be achieved swiftly.
  • If SBI opens flat, then price may either go up to 190 with great effort, or it may go down to 182 with equal difficulty.
  • If SBI opens with a gap down, then you may find price tumbling to 178.
Whatever be the scenario, target of 190 is very likely to be achieved. However if tomorrow SBI Mar Future closes near 190, then you may like to hold this position for an extended target of 200.

Take the Swing this Wednesday - Find the Most Eligible Candidate

Short term trading through the instrument of stock futures can be most rewarding and tension free if you can identify and trade the swing in prices. Swing trading can even allow you the liberty of trading without stop loss - provided you identify and join the swing at the appropriate time.

This Wednesday you can trade the swing in Bank Nifty. And the most eligible candidate in the banking counter is State Bank of India.

If you are going to trade March contract of SBI in NSE, then my suggestion is to buy in the range of 184/185 for a target of 190. SBI closed at 185.8 in yesterday's trade.

There is a caveat though. This trade in SBI Mar Futures needs to be initiated if Nifty opens flat or slightly positive. But in case Nifty opens deep in the red, then buy SBI Mar Future in the range of 181/182, target remaining the same.

Enjoy the swing!!!