Stock Futures Trading Made Ezy - Ultra Tech Cement

Stock futures trading is rather a simple way of making money by retail investors. For continued success while tradng stock futures there are few things to be kept in mind;-

1. Do not enter into more than one position at a time, whatever be the lure.
2. Look for established clear momentum or strong swing.
3. Do not think of trading intra-day. If your target is achieved intra-day it is bonus, but do not have that as a compulsion.
4. Do not trade any news, good or bad.
5. Have an amount of Rs 1 lakh in your trading account to successfully trade stock futures.

I have been giving stock futures recommendations in http://www.stockezy.com/ as a Guru. On 19th July one of my subscribers first bought Ultra Tech July Futures at 825.25 as per my recommendation. On 21 July he exited at 846 with a profit of Rs 5250/-.

Again on 27th July my subscribers entered this scrip at 826 as per my recommendations and booked intra-day profit ranging from Rs 2500/- to Rs 6000/-.

On both the occasions we had entered trade in Ultra Tech purely on technical reasons. Ultra Tech was falling at rapid pace and even the general market was weak. But the termination point of second down wave as per Elliot Wave principle was calculated with help of Fibonacci retracement. This gave us our buy price from where technical bounce was sure to take place. And so it did!

We could have opted for higher target but fundamentally cement sector is weak in monsoons and general market also had a negative bias. So we took precautions and exited at a guaranteed  level, thereby eliminating all risk factors attached with holding for higher target. Yesterday the scrip reached high of 878, thereby achieving its resistance level of 30 day moving average. But by exiting early we still could manage to extract average of about Rs 8000/- from two trades in one scrip. That works out to 19.5% return on investment of Rs 41,000/-.

Links to actual trades are given below :-
http://www.stockezy.com/opinions/6656/buy-ultracemco-july-futures/
http://www.stockezy.com/opinions/6810/buy-ultracemco-july-futures/

Tensions In Kashmir - Problems And Solutions

Kashmir is a land blessed by nature. It is not just the landscape, even the populace is genetically blessed by the Almighty. The all-pervading natural beauty that one encounters in the entire valley is breath-taking. From Pehalgam to Gulmarg, Sonamarg to Baramullah, you can explore any nook and corner and you will be spellbound by the sheer opulence of nature. Anything and everything is in bountiful as far as natural beauty of the countryside is concerned. In the same vein one finds a population endowed with the best of physique and sharp, strikingly beautiful features. It compels one to ruminate that nature has been rather partial to Kashmir and Kashmiris in terms of beauty as compared to rest of India.

When we mingle with the common people, there is a sense of pure and pristine simplicity which is hallmark of hill people. And if you look back thirty years, Kashmir was the place where there was absolute peace. It was like how Leh and Ladakh is today. Then what exactly went wrong that in three decades a place symbolizing heaven on earth is pushed to a spot where even the devil shudders to trod? How is it that such peace loving populace has turned so violent that Kashmir never seem to leave the newspaper headlines. We will try and evaluate plausible reasons, away from the politics of power brokers and terror merchants.

1. Till the time Kashmir was peaceful, there was no wedge between the minority Hindus and majority Muslims. But the Hindus controlled the actual wealth as they were landlords and affluent businessmen in the Valley.
2. Most influential Hindus were the Brahmins who were called Kashmiri Pundits. With dominance in wealth and position in society, there existed a fiduciary relationship of master and servant between many Hindus and Muslims.
3. Such relationship however generates excesses in behaviour, leading to certain conditions of exploitation in day-to-day life. Over a long period of time these conditions give rise to  feelings of simmering anger amongst the exploited.
4. These are the same conditions which existed in Tamil Nadu between the Brahmins and the lower castes, which led to the movement of ethnic cleansing of Tamil Brahmins and culminated in formation of DMK(Dravida Munnetra Kazhagam).
5. So the ground was ripe to sow seeds of discontentment and this was done by foul politics and politicians in 1987 state elections.
6. Seizing an opportunity, as Kashmir went through political turmoils after the 1987 elections, terror mongers swung into action and spread the message of hatred. Land of peace and  tranquility suddenly erupted into one perennial volcano of guns, conflicts and violence.

Situation being as it is now, there is an urgent need to find remedial measures to bring life to normalcy in Kashmir Valley. Some of the measures suggested are listed below :-

1. Deal with militancy with a swift and heavy hand. Weed out the militants without any political colours and compulsions. After all, there are not more than 5000 militants in the entire valley.
2. Give a better deal to the population by going full steam for real development on ground. For that the first step is to shore up infrastructure development of the Valley which should match any International standards.
3. With infrastructure development there should be a case to turn places in Kashmir into Special Economic Zones where industries should be allowed to proliferate. This will bring economic prosperity to Kashmir by way of exponential increase in employment opportunities.
4. Give extra push to spreading professional education amongst Kashmiri youths so that they become endowed and empowered.
5. After making Kashmir safe by flushing out militants, make sure that it becomes a tourist destination of the world by providing the right kind of world class infrastructure and tourist comforts.

The only way out of this logjam of militancy and terrorism is to spread prosperity in the Valley with fundamentally strong policies and plans. These policies and plans should get translated into equally swift and sound execution on ground. For that politics and rhetoric have to be kept at bay. The price that Indian Government has to pay for all this will be much smaller compared to the price it pays every year in terms of losses in man and material.

Stress Test For European Banks : Not So Stressful Though

On 23rd July 2010 results of  Stress Test for 91 banks of the European Union were declared. Of these 91 banks only seven banks failed the stress test. And Spanish banks topped the list with maximum number of failures. Five banks from Spain, one bank from Germany and one from Greece comprised the list of seven failed banks.

One year back similar Stress Test was conducted in US for 19 of its banks. Out of 19 US banks, ten banks failed the stress test conducted in May 2009. It was estimated that these banks would require an infusion of $75 billion to be credit worthy in case of another depression. That was stressful. But here when there is concerns of Sovereign Debt Default in European continent there are only seven banks out of 91 tested which failed. Estimated requirement of capital is just $ 4.5 billion to cater for any rude surprises by way of economic downturn. Isn't it wee bit surprising? It only points to a fact that the tests were not conducted rigourously. The rules applied to test the banks have been lenient. That's the only explanation one can offer.

Stress Test is like an X-ray. It tells us where all the banks and banking system have to be repaired in order to be strong enough to withstand an economic tsunami. In times of trouble if the banks fail, then what is left to bank upon for common citizens of a nation? But the European Union passed off this opportunity to find precautionary measures to safeguard itself against another economic downturn. If the doctor doesn't diagnose the patient correctly then how on earth can you prescribe the right medicine? Critics are  already saying that the stress tests on European banks were so easy that even Lindsay Lohan would have passed it.

So what could be the reason that European Union opted for losing credibility for its banks in the eyes of global investors? The tests were intended to reassure investors and help ease pressure in bank funding. This was urgently required since Sovereign debt crisis in many European nations undermined confidence in the banking system. Has the European Union achieved that goal with a Stress Test bereft of stress? I wonder not!! US investors have already lost faith in the European Banks as is evident from investment data available from various Mutual Funds. For the last two years exposure in European Banks has been drastically reducing in portfolios of US Fund Managers. Some have reduced it by as low as 60 to 80%. On top of that, this Stress Test has evoked some very caustic remarks from US Fund Managers.

Charles de Vaulx, a portfolio manager at International Value Advisers LLC said the stress tests would not change the firm's outlook on European Banks. "We find the European banks still under capitalized," de Vaulx said. "The lack of a test for sovereign risk means the test was too soft and not credible." After announcement of stress test results US markets shrugged off the results as a non event, and marched northwards on  expectations of better corporate earnings.

Gravitating Towards Trade War Scenario : Fallout of Depression

US President Barack Obama has fired the first shot to initiating Trade War. Last week he goes on record saying "Simply put, export growth leads to job growth and economic growth," This President Barack Obama opined while setting up an industry panel to achieve his ambitious target of doubling American exports in next five years. "This isn't just about where American jobs are today. This is where American jobs will be tomorrow", thundered the US President.

After having failed to create new jobs for US citizens through the usual route of driving domestic growth via fundamental economic activities, President Obama has now set his sights on achieving US economic revival by focusing on enhanced exports. To achieve the same he has already started advising competing exporting nations to go slow on their exports. Sample this reaction from a German official to President Barack Obama's advice "With his arguments that we should become a bit less reliant on exports and allow the others to catch up, he's just trying to weaken us. Well, we're not going to take his advice."

But if we know the style and functioning of  US President, he is not going to go back in his new agenda of doubling exports to rekindle US economic recovery, just because Germans do not like it. On the other hand European nations are not going to accept whatever US President has set as his national goal. It is no longer the period just after World War II that European Union will kowtow to US diktat. US will find it very tough to arm twist European Union on reducing its exports, whatever be the Union's present state of economic crisis. And that may set off some kind of trade war, which can be the next level of global concern.

The spectre of the European Central Bank raising interest rates to damp inflationary pressures in Germany is receding away. European Central Bank will find it very difficult at this time to raise rates when many European nations are still struggling with their respective debt-ridden economies. Credit crisis in Europe has at least ensured that the stimulus package will not be withdrawn for several months, which means that present low interest rates are here to stay for quite sometime. This is excellent news for Germany's export-orientated industry since continuation of low interest rates means high inflation, which in turn means that exports will fetch more money to German exporters.

In a scenario where exports are so lucrative, do you feel Germans are going to pay any heed to the wishes of President Obama? And therein lies the danger of a global trade war, in case US decides to pull out all the stops to attain its national agenda of doubling exports at the cost of its exporting competitors.

Trading Stock Futures : Performance Update Mid July 2010

Last performance update of trading stock futures was published on 6th July 2010 in a post titled "Stock Futures: Performance Update For June 2010". In that post it was seen that we had achieved 100% result in June 2010 trading Stock Futures. That means all the four Buy trades which were closed in June gave profit. In June we had traded lightly because market conditions were not conducive for aggressive trading on any side, long or short. However we still managed to generate a profit of Rs 23317/- from these four successful trades.

July though is different. There were enough indications for markets to move northwards and so I had given  full throttle to initiating buy recommendations. Now mid way through July 2010, its time to generate a performance report to assess where we stand against all stock futures recommendations which have been executed so far. By the way, let me preempt the findings by disclosing that so far in July we have maintained the track record of June by delivering 100% success. Take a look at the details of trades executed in July 2010 in Stock Futures  recommended by me at http://www.stockezy.com/ :-

Aban July Futures(Long) :
Bought at 670 and covered at 890. Lot size = 250. Investment = Rs 33500/-.
Profit = 220x250= Rs 55000/-. Return on Investment = 164%

KS Oils July Futures(Short) :
Sold at 58 and covered at 57.25. Lot size = 4000. Investment = Rs 46000/-.
Profit = 0.75x4000= Rs 3000/-. Return on Investment = 6.5%

Aban July Futures(Long) Rolled Over From June Series :
Four lots bought at average of 864 and covered at 890. Lot size = 250. Investment = Rs 1,48,000/-.
Profit = 26x1000= Rs 26000/-. Return on Investment = 17.5%

Bajaj Hind July Futures(Long) Rolled Over From June Series :
Bought at 116 and covered at 118. Lot size = 2000. Investment = Rs 46,000/-.
Profit = 2x2000= Rs 4000/-. Return on Investment = 8.6%

GMR Infra July Futures(Long) :
Bought at 59.2 and covered at 60.2. Lot size = 4000. Investment = Rs 47000/-.
Profit = 1x4000= Rs 4000/-. Return on Investment = 8.5%

Bajaj Hind July Futures(Long) :
Buying at dips, investment of Rs 46000/- in this scrip was rotated by buying and selling four times between 1st July to 14th July.
Each time profit of 5500/-, 3400/-, 2000/- and 4400/- respectively could be realized.
Total Profit = 5500+3400+2000+4400 = Rs 15300/-. Return on Investment = 33.26%

Balrampur Chini July Futures(Long) :
Buying at dips, investment of Rs 67000/- in this scrip was rotated by buying and selling three times between 2nd July to 13th July.
Each time profit of 5400/-, 3000/- and 8000/- respectively could be generated.
Total Profit = 5400+3000+8000 = Rs 16400/-. Return on Investment = 24.4%

Cummins India July Futures(Long) :
Bought at 596 and covered at 602. Lot size = 500. Investment = Rs 59000/-
Profit = 6x500= Rs 3000/-. Return on Investment = 5.08%

McDowell July Futures(Long) :
Bought at 1296 and covered at 1310. Lot size = 250. Investment = Rs 64000/-.
Profit = 14x250= Rs 3500/-. Return on Investment = 5.4%

Patel Engg July Futures(Long) :
Bought at 417 and covered at 425. Lot size = 500. Investment = Rs 41000/-.
Profit = 8x500= Rs 4000/-. Return on Investment = 9.75%

Tech Mahindra July Futures(Long) :
Bought at 736 and covered at 760. Lot size = 250. Investment = Rs 37000/-.
Profit = 24x250= Rs 6000/-. Return on Investment = 16.2%

Bharti Airtel July Futures(Long) :
Bought at 273.5 and covered at 278.5. Lot size = 1000. Investment = Rs 54000/-.
Profit = 5x1000= Rs 5000/-. Return on Investment = 9.2%

JSW Steel July Futures(Long) :
Bought at 1075 and covered at 1084. Lot size = 250. Investment = Rs 53000/-.
Profit = 9x250= Rs 2250/-. Return on Investment = 4.2%

Renuka Sugar July Futures(Long) :
Bought at 70.1 and covered at 71.5. Lot size = 2000. Investment = Rs 28000/-.
Profit = 1.4x2000= Rs 2800/-. Return on Investment = 10%


Total profit from 01 July2010 to 14 July 2010 = Rs 1,50,250/-