From last two weeks my nifty shorting calls went wrong for me and stock long calls fetched me the money all in all a neutral fortnight. As I mentioned in February “It’s the time to build the portfolio” markets went on for a strong rally.
In my view, the medium term trend is positive till Nifty holds the 3050. For short term all the indicators and oscillators were in over bought zone which indicates some profit booking should happen in this week and if so it will be wild!
So, here the strategy to follow:
1. Go short nifty around the 3440-3470 targetting the T1: 3310 T2:3250 if results are bad one can aim the T3:3065
Huge risk taking investors can only go for this call (the medium term trend is up and this call is against the trend)
If Infy guidance comes positive then one should exit from the shorts and initiate the fresh longs at that time.
With thanks
Be and make
4 comments:
Dear Be and Make,
I am a regular follower of your blog since Oct 2008. I am able to book profits/limit looses based on your recomendations on Market Outlook and RPL posts. Thanks for all your posting.
Wanted to know if it good to book profits (in RIL shares held in cash) and short NIFTY around 3525 (Fibonacci retracement of 38% from its low of 2555 made on March 2009)?
Thanks
Dear Ganapathy – Thanks for your good words. If you gone through my recent views on “building portfolio” it clearly tells my views.
I am repeatedly saying that now the trend is ‘Buy on dips’!
Markets are at over bought zone so some profit booking should come for sure! It doesn’t mean that one should sell all his stocks. If wish to catch the corrections better to buy the puts or short the nifty/stock instead of selling the stock.
So that you can minimize your losses, if you are a long term investor then this strategy will fetch you good money.
If you are a trader then you should exit at each resistance level and re-enter on every dip is the right strategy, but (as I am long term investor) I prefer the first one.
With thanks
Happy investing
Be and Make
Dear Be and Make,
Thanks for your response.
I am also a long term investor, however missed to book profits during 2008 fall as I have not seen a bear market (missed to read through your blog earlier). Anyway it was a good learning.
I am going with your views. Holding the RIL shares in cash, however hedged my position by shorting NIFTY futures around 3480 level. Probably will come out the shorts if NIFTY reaches 3150 OR RSI of RIL/NIFTY drops lower from 70.
Once again thanks you very much for your suggestions.
Regards
Ganapathy
Dear Be and Make,
I missed to add a link in my earlier comment. I read this today morning which was interesting.
'Traders, Not Investors, Fueling This Stock Rally: NYSE Chief'. URL: http://www.cnbc.com/id/30263011
Post a Comment