ITC has been continuously stomping north since 02 Mar 2010. From low of 115 it closed at 168.3 on 17th Sep. In this rise it had completed the five wave pattern of Elliot wave. That was a cue for me to contemplate going short in the scrip. Since it was making new highs every fortnight, it was only by extrapolating that I could come to a fair sell price in uncharted territory. And I arrived at 173 as fair point to short the scrip.
Hence on next trading session on 20th Sep I advised my subscribers at http://www.stockezy.com/ to sell ITC Sep Futures at 172.5/173. I also asked them to buy one lot ITC Sep 170 Put at 1.0/1.5 But after my subscribers took action as per my recommendation the scrip started sideways movement between 174 and 175. But in the last half hour before market close, the scrip bolted to day high of 178. However before market close I advised my subscribers to buy one more lot of ITC Sep 170 Put at 0.75/0.8, which they did.
Finally today we escaped from the clutches of ITC with profit ranging from Rs 2000/- to Rs 5000/-. The Puts had helped us get out of a tight situation. In the whole drama, as it unfolded before our screen, I was simply amazed by the faith that my subscribers reposed on my call, even when their MTM losses were mounting to five digits. I feel grateful that I have a club with members so understanding and dependable that they act on my advice, even during crisis times. It is their support which has allowed me to close 40 derivatives trades at a stretch in profit. You may like to take a peek at the trading room activities in ITC through the following links:-
http://www.stockezy.com/opinions/7461/buy-itc-sep-170-put/
http://www.stockezy.com/opinions/7460/buy-itc-sep-fut/
Tuesday, September 21, 2010
Sunday, September 19, 2010
Performance Of Trading Stock Futures : August 2010
August has been the most frustrating month as far as our stock futures trading is concerned. Its been a month which me and my subscribers at http://www.stockezy.com/ would like to forget in a hurry. There was nothing 'august' about this month of August 2010 as far as trading is concerned.
On 2nd Aug Nifty touched a low of 5351 whereas on 30th Aug day low was 5390. If we compare the closing prices of Nifty on 2nd Aug and 30th Aug, we find them to be 5432 and 5415 respectively. From these figures it is evident that the indices went nowhere in terms of direction in the entire month of August 2010.
Our efficiency in my exclusive club of stock futures trading during the month of August was nothing to write home about. So far on an average we have been doing twenty number of stock futures trades in a month. But in this month of August we managed to enter into only four trades on the long side. Out of these four trades, two trades had to be rolled over to September series. And it is these two abominable trades which seriously pulled down our efficiency. There was huge cost to pay in terms of emotional cost and opportunity cost. If you have missed my detailed analysis of those two rogue trades, here are the links again:-
http://www.stockezy.com/opinions/7405/stock-futures-trading-made-un-ezy-reliance-industries/
http://www.stockezy.com/opinions/7419/stock-futures-trading-made-un-ezy-j-p-associates/
On 2nd Aug Nifty touched a low of 5351 whereas on 30th Aug day low was 5390. If we compare the closing prices of Nifty on 2nd Aug and 30th Aug, we find them to be 5432 and 5415 respectively. From these figures it is evident that the indices went nowhere in terms of direction in the entire month of August 2010.
Our efficiency in my exclusive club of stock futures trading during the month of August was nothing to write home about. So far on an average we have been doing twenty number of stock futures trades in a month. But in this month of August we managed to enter into only four trades on the long side. Out of these four trades, two trades had to be rolled over to September series. And it is these two abominable trades which seriously pulled down our efficiency. There was huge cost to pay in terms of emotional cost and opportunity cost. If you have missed my detailed analysis of those two rogue trades, here are the links again:-
http://www.stockezy.com/opinions/7405/stock-futures-trading-made-un-ezy-reliance-industries/
http://www.stockezy.com/opinions/7419/stock-futures-trading-made-un-ezy-j-p-associates/
Now is the time to carry out performance check of two stock futures trades that were squared off in August 2010. As per established tradition in my exclusive club of stock futures trading at Stockezy, 100% success was again achieved in these two trades. Total profit generated from these two trades was Rs 8,600/- at an average of Rs 4300/- per trade. Details of these trades are given below :-
Ambuja Cement August Futures(Long) :
Bought at 113.5 and covered at 115.3. Lot size = 2000. Investment = Rs 46,000/-.
Profit = 1.8x2000= Rs 3600/-. Return on Investment = 8%
Patni August Futures(Long) :
Bought at 450 and covered at 460. Lot size = 500. Investment = Rs 45,000/-.
Profit = 10x500= Rs 5000/-. Return on Investment = 11%
Now in September we have finally got our bearings and market has also started trending. In September so far we have successfully squared off eight stock futures trades. Two trades are already open, out of which we shall be exiting one of them in next trading session on Monday. We plan to pick up speed of trading in September and hence I call upon all my subscribers to be mentally prepared for the same. Got to catch up for the lost time and opportunity in August, you see!!
Stock Futures Trading Made Ezy - Rcom
Rcom has been been an under-performer since May 2009. In fact the entire telecom sector has been under heavy weather but not as much as Rcom. But Rcom has great potential for long term investors. Hence one can buy at present level of 160/170 and hold for two years for a target of 350. But here we will be discussing strategy for buying for very short term, since we are interested in stock futures trading.
On 7th Sep I recommended buying Rcom Sep Futures at 162/164 to my subscribers at http://www.stockezy.com/ . On 6th Sep the scrip had closed at 163.3 and was near its recent low. The decision on the face of it was fraught with danger. Every TV channel and print media was dead against buying Rcom before 135/140. So if these experts were right then holding a position at 162/164 would mean giving MTM of Rs 60000/- in case Rcom does fall to 135/140. So naturally Trading Room sentiments were one of fear and trepidation which can be felt through this link : http://www.stockezy.com/opinions/7342/buy-rcom-sept-futures/ . Subscribers were concerned and shared their concern in trading room. Sample these reproduced comment threads from above given trading room link:-
On 7th Sep I recommended buying Rcom Sep Futures at 162/164 to my subscribers at http://www.stockezy.com/ . On 6th Sep the scrip had closed at 163.3 and was near its recent low. The decision on the face of it was fraught with danger. Every TV channel and print media was dead against buying Rcom before 135/140. So if these experts were right then holding a position at 162/164 would mean giving MTM of Rs 60000/- in case Rcom does fall to 135/140. So naturally Trading Room sentiments were one of fear and trepidation which can be felt through this link : http://www.stockezy.com/opinions/7342/buy-rcom-sept-futures/ . Subscribers were concerned and shared their concern in trading room. Sample these reproduced comment threads from above given trading room link:-
“
This just came in - BNP Paribas cuts target price on Reliance Comm
(Reuters) - BNP Paribas Securities said on Tuesday it had lowered its target price on India's Reliance Communications to 140 rupees from 175, while retaining its "reduce" rating.
Any thoughts?
”“
RCOM IS 161.90. MANY BROKERAGES HAVE DOWNGRADED PRICE TARGETS.KOTAK EQUITY HAS PUT 125 AS FAIR MARKET VALUE. WHAT WE SHOULD DO
”“
On Monday, if Rcom trades strongly above 167, then hold with stop loss at 165 for tgt of 172/175. Otherwise exit at 167
”After 6 trading sessions of idling within a range of 162 to 165.5, Rcom finally gave way to lower side and closed at 159.2 on 16th Sep. When it was falling below 162 I was advising subscribers to pick up more. Why was I doing so? Didn't the voices of all experts and Fund Managers scare me? Find the reasons below:-
- From 28th June onwards Rcom has been continuously falling. It fell from 206.7 to a low of 155.3 on 31st Aug. In this fall there has been no significant bounce. The wave count as per Elliot Wave Theory suggested that the technical bounce would take place from 155.3.