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.

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.

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

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!!!

Impending Doom In World Equity Markets

US equity markets are poised to crash, and with it the world markets will collapse. Tracking the movements of Dow Jones Industrial Average, for clues to such an event unfolding, is the blog "Trading Opportunities In Stock Markets". Check out this blog for it will help investors in India to exit before there is serious wealth erosion of retail investors. Join this site for getting daily information on Dow movement and its implications. Here is the link below :-

http://shurojit.blogspot.in/

Safe Investing!

Markets Have Corrected - Time To Buy Again

Those who have been waiting for my post since 31st May, would realize that I have been quiet for a reason. There has been bloodletting in Indian markets and in such situations its better to witness from the sidelines. That is why I have been giving no recommendations for the last two weeks. I wanted the dust to settle down before we take up the fight again. Now the time has come to start buying in Indian stock market. You may well ask - why? There are many reasons which I shall elaborate in succeeding paragraphs, but the primary reason is technical in nature. You see, there is this Golden Ratio of 61.8% which is generally found in all aspects of nature. This has been expounded by an Italian mathematician named Fibonacci. Today Nifty has retraced exactly 61.8% of its earlier up-move  from 5477(10 April 2013) to 6229(20 May 2013). See it in the chart given below:-

That's the technical aspect for starting your buy tomorrow. The other reasons for buying which will have sentimental and fundamental effects on Indian markets are listed below :-

1. Rating Agency Fitch has revised the outlook for India from Negative to Stable.
2. Rupee has reversed its falling trend and has risen 1% against the US Dollar.
3. Finance Minister will announce measures to rescue Rupee tomorrow.
4. Globally Dollar is weakening as is evident from the Dollar Index

So there you are! Come tomorrow be mentally prepared to start shopping in Indian stocks of substance. Nifty is expected to open  with a gap up tomorrow and should cruise to level of 5850. Today Nifty closed at 5760. Happy Trading! 

Storm It Was - A Terrifying One At That!

It was not Nifty or Sensex falling today, but the manner in which they fell. Simply wiped out the species called bulls from the market. It was terrifying to say the least. It was a super storm. In my last blog-post I had a premonition that a storm was in the making. Check out this post here.

I was wondering why an expiry day was so dull. It was as I was contemplating - a lull before the storm. Bulls were being made to climb up the gum tree. It was a perfect setting for a Bull Trap. Well done Bears!.

That said, I am not fully convinced that the gruesome sell off had anything to do with GDP numbers as is being publicized. GDP numbers were in fact a tad better than market expectations. And if expected GDP numbers did not rattle the markets yesterday, then why the sell off today. It doesn't stand to reason. The combination of following can be the reason for such determined sell off:-

1. RBI Governor hinted that rate cut is not likely. And since this rally was June rate cut driven, hence the sell off today.
2. PM hints at cabinet reshuffle, so an air of uncertainty hangs in air. And markets loathe uncertainty.
3. The relentless slide in Rupee against Dollar, indicating that tapering of QE-3 in US is on the cards. This will result in tightening of liquidity in markets for all asset classes. 

That said we had Chamblfert June Futures hitting its stop loss at 58. Hence we had to book loss of Rs 8000/- .Sadly there seems to be Policy Paralysis for Fertilizer Companies, even when the monsoons are approaching and clarity on subsidy is awaited from Govt. With non-Urea fertilizer prices being so high, farmers will adopt Urea as their preferred fertilizer. Let us see what Govt decides to do in an agrarian economy - further snuff out agri-based industries or give incentive to boost them. Time will tell!

I am planning to run a series through this blog on all profitable Indian industries that Govt has succeeded in butchering through its quaint policies. God knows what sadistic pleasure is being derived by the GovtOthrough such policies. We shall evaluate later, so keep checking out this space.

Lackluster Expiry - Is It Calm Before Storm

An uninspiring expiry day!. Markets did nothing much throughout the day and very stock specific action ensured that markets closed in green. But the actual fact cannot be gauged by the green tick in Nifty or Sensex. The actual story of the broader market was that it sold off. There were more declines than advances. Metals and Infrastructure bore the brunt of selling, even as Indices rose from red.

But it was surprising that there was hardly any volatile movement on an expiry day. No mad surges to cover positions and hence it was overall a boring session for an expiry day. However the slide in the Indian markets was not as pronounced as the overnight global qualms. With Dow having closed 106 points on worries of tapering Quantitative Easing (QE-3), one could have got more jolt in Indian markets. By that standard there was calm in our markets today.

Be that as it may, we have a position on the buy side still standing. It is Chamblfert June Futures which closed down today at 56.1. In case you forgot, I had recommended its buy yesterday in this post.
Those holding this position should hold it till 50. All the best!.