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!!!

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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!