Indian Markets Chug Along - But Bulls Beware of Trap

Nifty closed today up 17 odd points. It seems that bulls are having a field day and there is relentless buying with no topping over in sight. But stop!. Before we conclude any such thing, I have a different take of the situation. Its a set-up for a Bull Trap. Not in the classical sense but the final effect is going to be the same. The newly converted Bulls are going to be trapped thinking that there is plenty of steam still left in the market to make profit on the upside. But just the opposite is going to happen latest by coming Tuesday i.e. 21st May. By the way, selling in Nifty could also begin on Monday in the later half of the trading session. If we look closely at daily chart of Nifty, we find 'Hanging Man' candlestick created in today's trading.

 

So on Monday (20 May 2013) as  markets open, we should sell Nifty June Futures. I am recommending June Futures because we should get better momentum on the downside with June series. On Monday I expect a gap to be created on opening. Whether it is gap down or gap up, we should sell Nifty June Futures. This means that your sell could be anywhere in the range of 6180 and 6230. First Target for your sell will be 6000 and 2nd Target will be 5900.

If you have any queries then do ask through the comments section.You can also write your thoughts and suggestions for improvements. Share your thoughts and we will all be that much more informed. All the best for trading on Monday!

Short Selling - Get Ready To Take Another Shot

Markets are cruising along in overbought territory and we need to ready ourselves for another try at short selling. The last try was when I had given a call for shorting Nifty on 10th May. Check Here. And on 13th May Nifty had fallen 132 points intraday. But on 14th May I had warned of bizarre market movements with wild illogical swings and volatility in this post here. The very next day on 15th May Nifty rose 138 points intraday. Hope you can sense the true meaning of bizarre market movement. Lets look at the daily chart of Nifty.

What you see on a particular day in market is just some weird and calculated posturing by big players and not the true direction or trend of the market. So do not get carried away by these bizarre market movements. Selling is round the corner and if I am not mistaken it will start within next couple of trading sessions. I feel tomorrow's trading session will give us the final signal for selling. From that angle tomorrow is a very important trading day, which will define the market's direction in short term. Keep vigil!

Selling in May Has Started - Nifty On Course To Target

Selling in May has started as I had predicted on 10 May 2013. We are about to witness a bizarre game of Distribution. Those who are uninitiated to the term "Distribution", it is a technique of selling by big players wherein they try to mask their intention to sell large quantities by selling in small tranches. This ensures that the prices do not get depressed suddenly and they are able to get good average sell price of their overall quantity. In this process they also intermittently try to artificially spike up the prices by buying back portion of their sold quantity.

This is a normal process of selling that happens in the market as a precursor to Bear Run. Then why am I calling it bizarre? The other day I was telling a friend of mine about what I perceive would happen in the market looking ahead. I am of the firm opinion that in days ahead we are in for some serious selling in the market. In normal times, the distribution phase is meant to suck up the retail investors by tricking  them into buying when actually they should be selling. Conditions in market are so created which convince the retail investors to buy. But at the present moment there is hardly any retail participation and even the domestic institutions are well nigh non participants in the market. That leaves the very big fishes comprising of all shades of FIIs. It is these big players who will try to hoodwink each other to get the best selling prices. So in short you will witness some very complex market movements and illogically high volatility. One day it will seem as if the Bears have taken total control and the very next day you will inexplicably find Bulls racing ahead in full steam.

But don't worry. As long as you are with me through this blog, you will be guided to weather any storm in the market. You will recall that on 10 May 2013 I had advised to sell Nifty May Futures in a post titled Sell In May & Go Away - Should We This Time?   And in the very next trading session on 13 May 2013, Nifty May Futures dropped from intraday high of 6119 to intraday low of 5986. In today's session Nifty May Futures has made a Doji and closed at 6006.

However, in my recommendation I had given the first target of 5870 for Nifty. It seems we are on course to achieve this target. Those who have sold Nifty as per my recommendation, can hold on to their position till the given first target. But they should keep stop loss at 6090, owing to expected high volatility. And once the first target is achieved then they should hold their position for the second target, but with apt trailing stop loss so as to protect their profit till then.

So far so good in trading Nifty since we are sitting in profit. Lets see whether the coming sessions vindicate my stance. Happy trading!

Sell In May & Go Away - Should We This Time?

In Western markets there goes a saying "Sell in May and Go Away". And this adage has generally been holding its worth even in Indian markets most of the time. But this time around Dow Jones has been surprising everyone by making all time highs everyday in May. Does that mean that things will be different this May and the adage will be proven wrong? Will it be foolhardy to sell in this month of May 2013?

I do not think it is unwise to sell now in May 2013. Of course you will have to time your 'Sell' differently for different stock futures. As for record breaking streak of Dow Jones, it seems the bullish exuberance has already been overdone for the time being. I am not for once saying that Dow Jones has peaked. I am only saying that Dow has overstayed in the untrodden territory of All Time High for a bit too long. So for the present moment Dow will have to cool down somewhat in rest of May.

I have been reminding you in previous posts that we will be selling May series. And the time has come for some action tomorrow. The first 'Sell' candidate is Nifty itself.  Lets have a look at Nifty May Futures daily chart.:

 We can see that Nifty has the following weakness in daily charts:-

• V-shape recovery which needs to correct so as to provide stability for further move up.
• There is formation of Bearish Engulfing candlestick pattern, if we see the candles of the last two trading sessions.
• Support for this V-shape up-move will be at 61.8% or 50% retracement. This means that  5800 and 5725 are the support areas for Nifty.

So we can sell Nifty between 6060 and 6090. Even if Nifty has to move up from here without correcting, it will still have to touch down to 5970 before going up, Hence selling Nifty now is low risk and high return proposition. Sell Nifty May Futures between 6060 / 6090 for first target of 5870 and second target of 5725.

There are other 'Sell' candidates also, but we can keep our exposure at low risk by selling only Nifty for the time being. But in case anyone needs to reconfirm a view on selling any other stock futures, he or she can do so by simply asking my opinion in the 'Comments' section. Remember its May and we can make merry by selling stock futures in May. So go right ahead and take action. All the very best!

Note For Those Who Are New To Stock Futures Trading

Since my recommendations to make money from stock market will be for very short term, it is advisable that you leverage your profit by entering futures trade of the recommended stock. But those who are uninitiated to stock futures trade, will have lot of mental apprehensions. For newbies I would like to touch upon rudimentary issues regarding stock futures trade. Read on to know the details/nuances of stock futures trade:-

1. Stock futures is traded almost in the same fashion as you trade that particular stock in the cash segment. Only difference is that when you buy a stock you get delivery of the stock in your Demat Account. But when you buy futures of that stock, you do not get physical delivery of that stock. Instead the buyer only enters into a contract with the seller.
2. While placing 'Buy' order for stock futures, quantities  need to be filled as fixed by the Exchange for each stock, called Lot Size. So if you have to buy Relinfra futures, you have to buy minimum one lot and the size of the lot is 500 shares. That means you have to buy minimum 500 number of Relinfra futures or buy in multiples of 500.
3. You can buy any of the three contracts of Relinfra-  May contract or June contract or July contract. Each contract expires on the last Thursday of that particular contract month. Thus May contract will expire on 30 May, June contract will expire on 27 Jun, and July contract will expire on 25 July. After you buy a particular month contract, you have the liberty to sell that contract anytime from that moment till expiry of the contract
4. Let us see how much money you have to invest to buy one lot of Relinfra Futures, consisting of 500 shares. You will have to pay about  20% of the total value of one lot. If current price of Relinfra June Futures is say 400, then the total cost of one lot of 500 shares will be 400x500 = Rs 2,00,000/-. But while buying one lot of Relinfra June Futures, you will only pay 20% of Rs 2,00,000/- which works out to Rs 40,000/-. In other words you can buy one lot of 500 shares of Relinfra June Futures for Rs 40,000/-, and this is the leverage you are getting to trade in stock futures. Suppose after buying one lot of Relinfra June Futures at 400, you find that the price has shot up to 420. and you sell it. Since you have sold one lot of Relinfra June futures at 420, you will make a profit of 20x500= Rs 10,000/-.

That is how simple stock futures trading is. But initially if you are little hesitant in filling the 'Buy' order form, you may seek the help of relationship manager of your broking firm. The advantage of stock futures trading is not only in the leverage that you get in terms of capital requirement, but also in the following areas:-

• You can quickly get into market and as quickly get out and yet make substantial return on investment. This means that for any position you take in the market, you can plan to have a very short exposure so as to cut down on risk of long exposure in uncertain times.
• Even when the market is falling because of a downturn or Bear Run, you can make money in stock futures. This is possible because you can take a sell position even before you buy. So this means that you can first sell one lot of Relinfra June Futures and later when the prices drop sufficiently, you can buy back one lot of Relinfra June Futures. Suppose you 'SELL' one lot Relinfra June Futures today at 400, and after couple of trading sessions you find that Relinfra June Futures is trading at 380. You can buy back your sell position at 380 and thereby make a profit of 20x500= Rs 10,000/-. Thus you can actually make profit in Bear market through trading Stock Futures. You do not have to keep waiting for start of a Bull market to make profit.

There is always a catch in all rosy pictures and the catch here is MtoM (Mark to Market). After you take a position (either buy or sell any stock futures), you need to keep your trading account sufficiently funded for MtoM. Supposing you Sold one lot Relinfra June Futures for 400 today and at the end of trading session Relinfra June Futures closes at 410. That means at end of the day you have incurred a notional loss of 10x500= Rs 5000/-. This Rs 5000/- is the MtoM requirement for today for the Sell position you have taken in Relinfra June Futures. And this much amount should be there in your trading account for you to keep holding this Sell position in your account. You may contact your broker to get more details on MtoM.

 We have seen that trading stock futures is simple enough. So get ready to enter into 'Sell' positions in May series to make profit. I will be giving you 'Sell' recommendations very shortly.

Vigneshwara Developers' Acquarius Business Park At Gurgaon

Got hold of this Walk Through Presentation on Aquarius Business Park, Sector 74, Gurgaon which is being developed by Vigneshwara Developers. Watch it critically and do let me know your thoughts.

If you recall, in my 21 Apr 2013 post on Real Estate Investing  I had discussed why we should invest in Property now and had recommended Vigneshwara Developers as my trusted builder. Disclosure is that I am a very happy and satisfied investor in projects of Vigneshwara Developers. Further in a post on 03 May 2013 I had put forward strategies for investment in real estate. Click Here to access post. Vigneshwara Developers offer 12 % Assured Return Plan and pay you  from the day you invest in their property. To get their Sales Presentation and other details you may contact their General Manager Marketing at this number : 09359210404

Reality Check For Investing In Real Estate

Time has come for looking towards Real Estate as an investment destination. But investment in stock markets at the present juncture is fraught with dangers and may give investors sleepless nights. I would like to qualify my statement here. I am only saying that stock markets will be difficult for investors, and not traders. Traders in stock market can still make money, but the same cannot be said for stock market investors.

While stock market investing can be an exercise in futility, investing now in real estate can turn out to be quite rewarding. At this point there is an overhang in stock markets, whereas real estate market is poised to gather steam. The only problem with investment in real estate is that the requirement of initial capital is dauntingly high. So in the succeeding paragraphs I am going to discuss strategies which can help investors to surmount this high barrier of capital requirement in property purchases.

Scenario # 1.
Let us consider options for those who do not have adequate capital for investment in real estate but have a residential property/flat which they have rented out. It is generally seen that a residential property/flat worth Rs 1,00,00,000/- (Rupees one crore) will fetch them a rent of about Rs 30,000/- (Rupees thirty thousand) per month. Now if they were to sell this residential property they would have Rs 1 crore in hand. They should invest this 1 crore in 12% assured return scheme in a commercial property. Then they will get a monthly return of 1% which works out to Rs 1,00,000/- (Rupees one lakh) per month. This means by shifting over from their residential property to commercial property they stand to gain Rs 70,000/- thousand per month as income. And if they judiciously choose their commercial property ( preferably IT Space) as per guidelines I had earlier given in this blog-post  http://archana-archdeb.blogspot.in/2013/04/investors-time-to-consider-shifting-to.html , then they will also get an exponential appreciation of their property over time. Hence we find that through the strategy outlined above, they will substantially increase their monthly income and also enhance chances of improved appreciation of their property.

Scenario # 2. 
Now  I will consider a strategy for those who do not have adequate capital for real estate investment and are staying in their own house without any other property. They can sell their house and invest the proceeds in a similar manner as in Scenario # 1 above. Supposing their house sells for Rs 1 crore. By investing this amount in assured return commercial property, they will have a monthly income of Rs 1 lakh as outlined in Scenario #1 above. They can shift to a rented house of similar status as their original house for which they will need to pay Rs 30,000/- as rent. That means after paying the rent, they will be left with Rs 70,000/- as spare income per month. Now they can go for buying a new residential flat under construction from a reputed builder by taking loan. EMIs for this loan can be easily met with the extra Rs 70,000/-. in hand, with lots of money to spare. I am saying this because till completion of  the flat, they will only be paying only the interest component of money disbursed by bank so far, called Pre-EMIs. And once the new residential property is ready for possession, they can move into their new flat, thereby saving the rent amount of  Rs 30,000/- they paid per month. So when the EMIs actually start, they will have Rs 1 lakh as income coming to them per month which will easily cater for these monthly EMIs. With this strategy they will have two properties(commercial plus residential) to appreciate in time, instead of just one residential property. Of course here they will have to initially pay 20% of the basic sale price (BSP) of the flat before sanction of  loan from a bank.

A reputed builder in Gurgaon who is selling commercial property(IT Space) with 12% assured return and whom I can vouch for is Vigneshwara Developers. For complete details you may contact their General Manager(Marketing) at this number : 09359210404

And yes, be ready for my next set of trading calls of May series which will be on the sell side. You will get my recommendations in this blog one day prior to entering the trades. Take care!!!

Stock Markets Rally - But How Much Did We Profit?

Today has been the day of reckoning. For today was expiry day for stock futures and if you would recall we entered into trade on 15 Apr 2013 on my recommendations given for 12 stocks on 14 Apr 2013 in a blog-post which you can access here http://archana-archdeb.blogspot.in/2013/04/execute-your-trading-plan-now.html

Now let us evaluate how much each of the 12 stock recommendations were worth. Out of the 12 stocks, only 11 could be traded as Ibrealest buy price was not achieved. Since the recommendations were for stock futures of April contract all the trades got closed, today being expiry day. Read on below to find out the score of each buy recommendation of 11 stock futures :- 


1. UNITECH (Lot size - 10000)   
Bought at 24.25
Sold at 30 
Profit = 5.75 (30-24.25) x 10000 = Rs 57,500/-

2. JPASSOCIAT (Lot size - 4000)   
Bought at 70
Sold at 80 
Profit = 10 (80-70) x 4000 = Rs 40,000/-

3. AMBUJACEM (Lot size - 2000)   
Bought at 173
Sold at 190 
Profit = 17 (190-173) x 2000 = Rs 34,000/-

4. LT (Lot size - 250)   
Bought at 1355
Sold at 1490
Profit = 135 (1490-1355) x 250 = Rs 33,750/-

5. JSWENERGY (Lot size - 4000)   
Bought at 56.5
Sold at 64 
Profit = 7.5 (64-56.5) x 4000 = Rs 30,000/-

6. ACC (Lot size - 250)   
Bought at 1140
Sold at 1260
Profit = 120 (1260-1140) x 250 = Rs 30,000/-

7. JPPOWER (Lot size - 8000)   
Bought at 24.5
Sold at 27.5
Profit = 3 (27.5-24.5) x 8000 = Rs 24,000/-

8. RELINFRA (Lot size - 500)   
Bought at 340
Sold at 380 
Profit = 40 (380-340) x 500 = Rs 20,000/-
 
9. BHEL(Lot size - 1000)   
Bought at 178
Sold at 192
Profit = 14 (192-178) x 1000 = Rs 14,000/-

10. VOLTAS (Lot size - 2000)   
Bought at 79
Sold at 85
Profit = 6 (85-79) x 2000 = Rs 12,000/-

11. DLF (Lot size - 1000)   
Bought at 243
Sold at 253
Profit = 10 (253-243) x 1000 = Rs 10,000/-

Keep a lookout for the next set of recommendations for the May series in this blog.

Feeds Through Feedburner Not timely - Will Be Terminated Henceforth

I have realized that feeds that you get through Feedburner in your mailbox are delivered to you quite late. This is creating problems for some of you to access market information from this blog in a timely fashion. Not getting timely actionable information is detrimental to entering market in a profitable manner as per my recommendations.

Hence from now onwards, I am going to switch off feeds from Feedburner to your mailbox, so that you stop getting delayed market information for trading. Those who want to take action in stock market as per tips provided in this blog, will now have to directly access the blog. For ease in accessing the blog you may download for Free my toolbar which is provided on the right hand side of the blog. This is Alexa toolbar (powered by Google) and is quite handy. You may also download my toolbar from the link provided below:-
https://s3.amazonaws.com/com.alexa.toolbar/atbp/EwM6Yb/download/index.htm

So go right ahead and download my toolbar in order to directly access this blog. I will keep giving you timely recommendations with precise entry and exit points of selected stocks so that you can make smart profits on a weekly basis. The present recommendations of 12 stocks, which I had given on 14 Apr 2013 in this blog-post http://archana-archdeb.blogspot.in/2013/04/execute-your-trading-plan-now.html, will  expire tomorrow i.e. on 25 Apr 2013. I will give you an update/result sheet of my present recommendations after market hours tomorrow.

I firmly believe that the present market conditions are going to provide immense profit making opportunities for short term traders. Hence you will be greatly benefited to enter trade in stock/index futures. Those who have realized the profit making potential of my recommendations can look forward to many more of my recommendations in this blog to make money out of stock market.

Investors - Time To Consider Shifting To Buying Real Estate

Investors in Stock Market will have a tough time with fierce volatility expected in 2013-2014. What we are witnessing today is not correction, but beginning of a deep correction, if not a long term Bear Run. Frankly speaking, a deep correction or a cyclical Bear Run have almost the same devastating effect on investor money. Such market conditions are beneficial only to smart traders and that too in the futures market, because when the market is trending down then the futures trader can go along-with the market and sell  futures position. As the market slides lower, such a trader can make profit by buying (squaring off his position) at lower level. In this manner a trader can make profit when the stock market is correcting/ in the grips of a bear hug.

In second paragraph of my blog-post on 14 Apr 2013, I had emphasized this fact that the present time is not conducive for Investors in stock market. This time in the stock market is only for traders. You can access that post here :http://archana-archdeb.blogspot.in/2013/04/execute-your-trading-plan-now.html

Commodities Market
If it is not stocks, then can you invest in commodities? The answer is 'No'. The commodity prices also have nose dived and they are just precursor to even worst things to emerge in the commodities front. Gold which was considered by investors as safe haven, is no longer so. We can expect 2013-2014 as very bad years for investors in Gold. Single day historical drop in gold prices of more than Rs 1500/- is just telling us that Bear Phase in Gold has started. After a Bull Phase of nearly 12 years, one can easily conclude that the Bear Phase will last at least two years.

Property Market
The only place left in India to invest now is the property market. That too in select places where the growth potential is maximum. With lot of policy easing lined up by the Govt (as Finance Minister is making us believe) to attract foreign capital, property market is set to boom. What will help is softening of commodity prices, which in turn will lower inflation and that will give impetus to RBI Governor to lower rates. On the sidelines, the current account deficit (CAD) in India will improve with price of oil cooling off and gold losing its luster with investors thereby lowering demand and import bill. All said and done, real estate market is ready to take off and that is the place to park your money, if you are an investor.

For investing in real estate, three most important things to be kept in mind are as follows:-

1. Your property investment  should be in a place with high potential of economic activities.
2. The location of the property should be such that it has very high connectivity, by Road, Rail and Air.
3. If you are looking at a property purely from investment angle, then it makes more economic sense to buy a commercial property, since the returns will be mush higher than residential property.

Besides what is given above, in places where you know Metro Rail is going to expand in a couple of years, such locations have an exponential potential of  giving you high returns. Place like the new Commercial Business District(CBD) of Gurgaon towards Manesar is one such sweet spot for investors and lot of builders have started executing their grandiose plans there. After a detailed survey and analysis, I would recommend one such builder and his not to be missed offer of Assured Return of 12% till completion of the project or five years whichever is later.

State of the Art commercial property is Aquarius IT Park at Sector 74 Gurgaon, being developed by Vigneshwara Builders and the only builder in this commercial business district of Gurgaon who has been given the permit to build a rooftop helipad. Those investors who are interested to get the exact details should contact their General Manager (marketing), Mobile No : 09359210404.

Best of Investing!!!