Saturday, September 18, 2010

Stock Futures Trading Made Ezy - Rpower

Since May 2009 Rpower has been moving sideways between the price range of 140 to 200. That is a very long time for sideways movement. It only indicates that any move outside this range will be ferocious in intensity. In my opinion the move out of this sideways range will be on the upside. This I have inferred from Elliot Wave calculations. Hence if you are a long term investor then Rpower is one space where you should invest at current level of 160.

For trading in stock futures the long term story of a scrip does not help. The daily requirement of mark-to-market (mtm) deters one from holding a position for long term. Trading by retail investors in stock futures can be meaningful at best for short term. Hence the moment I saw near term prospects of making profit in Rpower I gave my recommendations for buying it. On 16 Aug 2010, my subscribers at  bought Rpower Aug Futures as per my recommendations between 154/156.

I had recommended buy of  Rpower for the following reasons :-

  1. Support of 200 day moving average was available at 154.
  2. My customized slow stochastic was at its maximum oversold position.
  3. There had been no technical bounce worth its name from price level of 190. Hence from support of 200 DMA it was logical to expect at least a bounce of 23.6%. That would mean a price level of 163 if the scrip had made a bottom at 154.
However the scrip made bottom at 150.5 with a flourish. It formed the Hammer at 150.5 on 18th Aug which I explained to my subscribers during the course of trading and this can be seen at this link here: From this link I am reproducing the relevant comment thread below:-

@Neelima. I know it is testing ur patience. For the time being just relax. Process of bottom formation at times can b testing to the nerves. Rpower has hammered its short term bottom price at 150.5. Before exploding upwards it is trying to shake away the weak hands. That is one of the ways for market makers to make money. After all futures trading is a zero sum game. If multitude of retail investors and other fishes do not lose money, then how will handful of big fishes gain handsomely??
With hammer at 150.5 in place, the minimum bounce of 23.6% meant a price target of 160. This hammer price was not violated on 26th Aug which gave me the strength to recommend to my subscribers to buy 2 lots of  Rpower 160 Call at average price of Rs 2/- on 30th and 31st Aug.. And as expected Rpower sailed to 161.8 on 6th Sep. Since Rpower 160 Calls were out-of-money call options, one lot of size 2000 shares was available for total capital investment of only Rs 4000/- . But the price increase in these calls was fast and furious once the stock price neared 160. Those who entered these positions realized how easy it is to profit from futures and options at correct entry point.

Thursday, September 16, 2010

Stock Futures Trading Made Un-Ezy : J P Associates

When you start making mistakes, they come in a bundle. After making the mistake of getting overwhelmed by company aura and fundamentals in the case of Reliance (as discussed in my last post, I made the cardinal mistake of 'trading news' in this curious case of JP Associates. I seem to have developed a penchant for not practicing what I am preaching. In fact just 45 days back, I had written a post which did spell out things to be ensured to succeed in trading stock futures. And of course in that post I clearly warned everyone against trading any news - good or bad. Check out this link here :

But when it came to observing my rules, I fell short of expectations. The news, which lured me into breaking my own rules, was that a deal had been brokered between agitating farmers and UP Govt for land compensation rate along Yamuna Expressway. Agitating farmers were demanding higher compensation rate for acquisition of their land by UP Govt. Finally the govt conceded to giving Rs 580 per sq m to agitating farmers. This was a huge plus for JP Group which is developing  Yamuna Expressway and connected infrastructure along this corridor. Now JP Group could progress with Project implementation in real earnest after lingering for nearly nine years.

The potential of this news was so huge that JP Associate Aug Futures surged from 117 to 125 in 3 trading sessions. On fateful day of 23rd Aug I succumbed to the potential of this news and recommended a buy at 121/122.5 to my subscribers at . From that day onwards JP Associates kept sliding down for eight trading sessions. On 31st Aug it made a low of 107.8. The reason for this slide was that a faction of farmers led by a new leader rejected the deal and hankered for still higher compensation rate. They even turned violent and burned earth moving equipment and damaged other assets of JP Group. So much for trading good news!!

Sitting 1600 km away we had to move into damage control mode. On 30th Aug  I advised my subscribers to buy one lot JP 120 Call of Sep series at 2.5/3.5. Again on 31st Aug  I advised them to buy another lot of JP 110 Call of Sep series at 4.05/4.15. Un-ezy trading details, as things happened in trading room on daily basis, are available in this link here :

In last trading session JP Associates Sep Fut made a high of 127.7 . But for me and my subscribers it was one of the costliest lessons learned the hard way - "Never trade News".

Tuesday, September 14, 2010

Stock Futures Trading Made Un-Ezy : Reliance Industries

Harsh lessons have surfaced from trading Reliance Futures. A company which stands at world No 2  in terms of returns to shareholders, has given sleepless nights to my subscribers for about a month for having bought it at seemingly reasonable price level of 1000. This happened at a time when indices were slowly creeping northwards, while Reliance slid south.

Let me begin from the start. On 10 Aug 2010, I had recommended buying Reliance Aug Fut to my subscribers at  at 990/1000. This decision to buy at 1000 level was result of  awe for the company and not any technical reason. On the contrary I had aired my  technical view at the site on 6th Aug. Reproduced  below is relevant comments section of this link which explains it all :-

Mam. I have one lot reliance @ 1017. bought it yesterday. what are your views for reliance? Its been making new lows everyday.
@Shantanu. Reliance is technically in down move. It has strong support at 960. So broadly it will come down to 980 before it manages a technical bounce. So try and get out of this position at around 1020.
But as I mentioned earlier, the fundamentals of the company got the better of my senses and I was as if mesmerized into recommending  Reliance, believing 1000 level to be mouth watering level, against my own technical reading. Result was that on 18th Aug the scrip slid down to 962.4 and from there bounced back to  997.4 on 20th Aug. So much profit could have been realized if only I had not got over-awed by  name of the company. While trading stock futures it is absolutely imperative not to get carried away by fundamentals of a company.  In fact  12 months back I had laid down certain Laws to be observed during trading in stock market. In this trade I violated Law #3 enunciated in this post of mine
Finally on 30th and 31st Aug  when Reliance made a low of 920.9 we had to resort to buying one lot each of Reliance Sept 1000 and 980 Call options. This was to facilitate easy exit from the combined  positions of Futures and options. That was achieved and today in trading  Reliance finally made a day high of 1004, revisiting our buy price level. Uneasy actual trading details are here in this link

Sunday, September 12, 2010

The Truth About Backlinks Inner Circle Review

For the World  Wide Web, Search Engine Optimization (SEO) is like  water to a plant. For  SEO work to be successful on a website, links  need to go in and out of  that website. Back links are also referred to  as inbound links and are  submitted to other sites. There is a company  that knows the importance  of links and according to Backlinks Inner Circle Review, they do this  well.

They stress the importance of back links to reach higher  rankings in  search engines. The more links on other websites, the more  credibility  with search engines and that means the higher one will be  seen in  search engine results. This company will recommend a marketing  strategy  that includes efforts to obtain more popularity for links.

They  build back links that are of quality information and that are  related  to the company website. Search engines will not place a lot of  weight on  links that are not related to the specific website. There is  no use  linking to car tires when your website is all about speedboats. A  site  with only a small number of quality back links, will position  itself  higher for targeted keywords. Sites with several unrelated links  will  not have a good ratings. This is where the experts will assist a  company  to get the keywords and links right.

There are various ways in  which they will assist a company to obtain  back links for their website.  Some of these methods are done free  while others will cost money. The  free options are to place the website  on a large number of directories  that are available on the Internet.  They have knowledge of the reputable  directory sites and will use those  to ensure the website will have  search engine favor.

Link exchange is another method that they  will apply to a company  website. This is when a web master creates a  link on a website, which  points to other webmasters. One-way links hold  more advantages that  two-way search engines will ignore links and  irrelevant links.  Webmasters usually have several websites and some are  not even related  to the other.

Backlink Inner Circle is aware of  this and will irradiate any  problems relating to IP clashes. This  happens when the same IP is  picked up more than once on the same  website. A search engine will  regard this as duplication and ignore one  or all of these links.

One of the best ways to build links is to  use an article directory.  Such a directory contains a huge amount of  articles. It allows one to  publish articles together with links in a  resource box. These  directories ask for quality content, they approve  and publish the  content and in return provide a suitable category for  the website and  provide the links.

The newest method is to post  discussions in forums and blogs. Most  often, these websites already  carry extremely successful links and SEO  optimization, therefore the  moment a company name appears in one of  these pages, it will be  displayed very high in search engine results. Backlinks Inner Circle  knows this too well and is available to assist  companies in all of the  above-mentioned strategies.

Thursday, September 2, 2010