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Showing posts from April, 2020

Pre - Market Report (30th April 2020)

US markets closed 2.5% higher Yesterday. Asian Markets are all in Green. Green Colour all Around. SGX Nifty is up 2% & Trading near 9750. Today is the Weekly & Monthly Expiry of Futures & Options Contracts. Tomorrow is a Holiday for our Markets & we are heading in for a long Weekend. Usually on the days as of Expiry , Volatility is the highest. We Witnessed high Volatility in the second half of Yesterdays Trading Session as well. Nifty broke out of from it's Resistance of 9400 & we have Witnessed a large rally of more than 300 Points since then. We are in a large Global rally & our Markets are also taking part in the same. Next resistance is around 9900-10000. Until then "Buy on Dip" strategy should work. Many People are asking me , who is the Hero of this Rally? Who is Responsible for this rally? My Simple answer is "SHORT SELLERS" . Almost Everybody from past few weeks have been giving targets of 7000-6000 on Nifty. Now all

Pre - Market Report (29th April 2020)

US markets closed in a Flat Terrain Yesterday. Asian Markets are also Mostly Flat. SGX Nifty is about 30-40 Points higher trading near 9440. Bank Nifty Outperformed Nifty Yesterday. Yesterday Market Opening , Nifty was Flat whereas Bank Nifty was up 300 Points. The reason is IndusInd Bank , Inspite of Posting Bad Results stock rallied 17% Yesterday. IndusInd Bank Profits fell more than 75% but still it was the Star Performer Yesterday. I always say it's very Difficult to predict and trade on results because Market gives Unexpected Movement. Many Short Positions were built in IndusInd Bank as all were Expecting negative results. All the Shorts were taken to cleaners and due to short covering the stock rallied even more. Axis Bank Declared results Yesterday & the results were average. Any Big Movement on this stock will again have an Impact on Bank Nifty. As Im been saying from quite some time now , i dont expect to go much lower in this Expiry. Economy is Weak , Coro

Pre - Market Report (28th April 2020)

US markets closed a percent higher Yesterday. Asian Markets are Mostly Mixed. Yesterday RBI Announced to provide ₹50,000 crore special Liquidity window to support Mutual Funds. Financial Sector Outperformed Yesterday on the back of this News. SGX Nifty is about 40-50 Points higher now. Nifty Traded in 70-80 Point Range Yesterday. Traded in Positive Terrain for the whole day Yesterday. As I mentioned in Yesterdays Blog im not Expecting the Markets to go much lower from here. Markets are Constantly Expanding their range on the upside & the Downside from here seems to be Minimal. IndusInd Bank declared it's results after Market hours Yesterday & it was below the Street Expectations. We are in a Buy on Dips Market and all the Dips should be bought into. The Market will reward your Patience on the higher side. Ignore all the Predictors giving you 5000-6000 targets on Nifty. They just sound smart but never make money. OPINIONS don't make Money , Actions do. Focus

Pre - Market Report (27th April 2020)

U.S Markets closed 1% higher On Friday. All Asian Markets are Mostly Trading Positive. China has Declared Wuhan as Corona Free City. On Friday Nifty closed 1.5% lower but Bank Nifty closed 3% lower.  Bank Nifty fell exactly double of Nifty. Financials are in a Bear Market & due to the Franklin issue the problems seems to Worsen . FII's are still Holding more than 60% long Positions in Index . So I don't expect Markets to fall heavily from here . Nifty has been Consolidating from past few weeks. The Range at which it was Consolidating was between 8800-9300. Now this Range seems to be Expanding & it's Expanding on the higher side. The Range has Moved to from 9000 to 9400 on Nifty now. Many Quality Stocks are Trading near their 52 week highs. Reliance has almost given more than 70% return in last 1 Month. Facebook - JIO deal comprised than 25-30% return out of those 70% . This is common in Bear Markets as Majority of the Smaller Businesses & High Levera

Investing vs Trading : What's The Difference?

Why Trading and Investing are so Fundamentally Di ff erent  There is a popular misconception that trading and investing could be used interchangeably with one another. But as professional traders and investors can attest to, they are both radically different. It’s easy to mix the terms when both activities share the same objective ie, to make money in the stock market.  But their opposite approaches to achieve that objective is what makes them so distinct. To put it in its simplest form, traders trade Tickers and investors invest in companies. Let’s break this phrase down in more detail by focusing on three main concepts associated with each activity.  Primary Philosophy:  Although investors could sometimes bleed into what a trader does and traders could bleed into what an investor does, the main philosophy to take away is that one is purely based off  fundamentals  and the other is based on  technicals .  Investors primarily look at the stock market from a fundamental stan

Pre - Market Report (24th April 2020)

US markets closed Negative Yesterday after Trading Positively for the first half. Asian Markets are all Trading Negative. This is due to the News released by WHO, that Gilead drug has failed for the Corona Virus Trial. Just a few days back all the World markets were up as Gilead claimed that its drug Remdesivir can be used to cure Corona Virus infection. SGX Nifty is now -1.5% & Trading below 9180. Yesterday as well , Nifty failed to break 9350.  Now Nifty has failed on 4 Occasions to break the Stiff Resistance of 9350. Volatile moves continue to be Witnessed between 8800 and 9350 for Nifty. Franklin India has wound up 6 Debt Schemes due to Illiquidity in the Bond Market. Most Investors feel Debt Funds are a better alternative to Fixed Deposits & infact Debt Funds offer high return. Debt Funds are highly risky as one needs to carefully Analyse which Bonds has the Debt Scheme Invested into. Debt Funds are less risky as Compared to Equity is a

Pre - Market Report (23rd April 2020)

US markets closed 2% higher Yesterday. Asian markets are also Trading Positive. SGX Nifty is almost flat as of now. Reliance was the Lone Contributor for Niftys massive rally Yesterday. Reliance Single Handedly contributed more than 100 Points for Nifty rally Yesterday. Markets took a sharp U- turn Yesterday from levels of 8900. This is a peculiar Range Bound Market & only those who focus on risk reward Trades make money. Short Covering in second half of Yesterdays market also took the Market higher & we closed nearly at the highs of the day. Yesterday was a TRENDING Market but Everything happened within the range. From last few weeks Bank Nifty was Significantly Underperforming the Nifty. Yesterday Bank Nifty caught up & alsmot Outperform the Nifty. Expecting a Sideways day today as well. Option Sellers coming to the table for Expiry makes it even more Difficult for Option Buyers to make Money. Option Buyers if they find any Trades are advised to trade April En

Pre - Market Report (22nd April 2020)

US markets ended 2% lower Yesterday. Asian Markets are also Trading Negative. Brent Crude is now below $20 per Barrel. SGX Nifty is now Trading Near Yesterdays low ie , 8900. Yesterday Reliance recovered 7% from lows & Stabilised the Markets by the day end. Today , there is news that Facebook is going to acquire about 10% stake in Reliance Significantly to cut Debt. Talk of the Town is Reliance Industries & it will be under the radar for Today's Trading Session. Financial Companies ( Banks , NBFC's) are in a Bear Market of their own. Bajaj Finance was down 10% Yesterday after already witnessing a 50% cut from it's All time high. Insiders know certain things from before & price action on the Stock happens before we hear the news in Indian Stock Markets. U.S Markets previously recovered more than 50% from retracement levels. Indian Stock Market retracement comes near about 9800 on Nifty. Markets are Still Rangebound & ha

Pre - Market Report (21st April 2020)

US markets were down around 3% Yesterday. Asian Markets are also Trading Negative. SGX Nifty is in Negative about 1.5%. Yesterday WTI Crude prices crashed to minus 37 dollars. Due to Excess Supply in Past Few Months & also due to no Demand the crude Crash came as a Shocker. This means if you buy one barrel of Crude oil, you do not have to pay instead you will be paid if taken Physical Delivery. Donald Trump has Tweeted this & World Markets continue to be under Pressure. Companies Dealing with Business outside India could likely be under Pressure today. IT Stocks , Automobiles could be under Pressure due to Trumps Tweet. ICICI Bank closed 5% lower Yesterday due to news that is has given about 750 Crores loan to an Oil Trading firm which has likely become an NPA. Bank Nifty closed Negative due to the same. Markets may continue to Consolidate and the Bias has shifted in favour of Bears. Due to the Latest Developments etc Markets are likely to

Pre - Market Report (20th April 2020)

US markets ended 2% higher on Friday. Asian Markets look Weak Today. SGX Nifty is Trading near 9250 as of now. No Positive news related to Corona Virus Front. Cases in India are at its Highest almost Every day. Most Countries have come up with plans to open up their Economy. Opening up the Economy sounds good but the issue is what if the Cases start to Multiply after opening up the Economy. HDFC Bank has declared it's Results over the Weekend & the results look Mixed. Private Banking Index was up 7% on Friday & there was a good amount of short covering in these Stocks. Too early to say that we have made a Bottom near 7500 on Nifty. Expect Markets to remain Rangebound for some days. Markets Seem to be Consolidating in a Range & the best way to trade these Markets is to Trade near the Boundaries. There might be a RANGE Expansion is this week but for some days Markets Seem to Consolidate. India VIX has Crashed from it's highest peak level o

Are you a Perfect Trader?

The Perfect Trader is patient with entries and exits, they are focused on what works not personal opinions. They do not worry about missed trades, the Perfect Trader does not boast while winning and does not become depressed while losing. They are never too proud to admit when they are wrong and exit their trade.  They do not give unsolicited advice to other traders because they know everyone trades their own system and their own plan.  They are not angered by the market action with losses because they take full responsibility for all their trades. They keep a detailed record of all their trades to learn from winners and losers.  They love trading and never stop learning and getting better. The Perfect Trader always protects their capital through risk management, always trusts in their methods, always has faith in themselves and method,  and always perseveres.   They Understand they cannot be right on each & every Trade. What's Important is to be Net Profitable

Pre - Market Report (17th April 2020)

  U.S Markets closed 1% lower Yesterday & Asian Markets & Mixed. Heavy News Flow lined up for Today Morning. RBI Governer , MR. Shashikanta Das to address the Media today at 10 AM. Dow Futures are now Trading 800 Points higher. Reports Suggest that Gilead Drug is showing Effectiveness against Corona Virus about its Drug Remdesivir. Trump Announces Guidelines to Re - open the U.S Economy. SGX Nifty up 300 points as of now ie, 8.35 AM IST. Traders should be vary of such heavy News flow & it's Implications on the Stock Market. This week was Excellent for Option Writing as VIX moved Lower. Today could be a highly Volatile Trading day Considering such heavy News flow. Nifty facing a Resistance near Zones of 9300 & if it crosses this level the next Resistance level is closer to 9500. For me Personally it seems like a no trading day as of now Considering such heavy News flow and when there is Analysis Doesn't work Market just responds and moves ac

Pre - Market Report (16th April 2020)

U.S Markets were down 1.5% Yesterday All Asian Markets are also Trading Negative. SGX Nifty Currently trading 1% Negative. Retail Investors are behaving Smart. They are selling at higher levels and buying at lower levels. From last 10 Days DII's have sold more than 7000 Crores. Retail Shareholding in HDFC Bank has also increased Significantly Number of retail shareholders in December 2019 quarter was 8.7 lakh whereas March 2020 quarter was 12.5 lakh, a jump of 40-45% Yesterday was a bit Unusual. All Nifty 50 Quality Stocks fell. In last wave of selling all Quality Stocks fall. It would be fair to say that Investors should not expect any returns in Year 2020. Corona Virus Pandemic will leave us with many Unsolved issues. (If this ever leaves) Government has Announced that Few Selected Activities would be allowed after April 20. These include Farming , E-commerce , Fisheries etc. Yesterday despite the Market falling so quick Put Option Premiums were not ri

Pre - Market Report (15th April 2020)

US Markets closed 2.5% higher Yesterday. Trump has Announced that he is almost ready with a plan to open the Economy. US Markets have been trading positive based on the Expectation. SGX Nifty up 2% & Trading near 9300 as of now. India has announced 19 day lock down extension upto 3rd May. PM has also Announced that Certain Relaxations will be provided in Certain areas to open the Economic activities after 20th April. This Week is lined up & packed up with many Major Events and Market will be looking at this very closely. MET to give it's first Monsoon forecast today at 1 pm. Results of TCS , HDFC Bank & Wipro lined up for this week. This rally we have Witnessed from 7500 levels on Nifty has weak legs & it's Unlikely that it would Sustain for long period. This is the best time to book profits for Traders / Investors who have entered near 7500-8000 zones on Nifty. It's already up more than 20% . In March series Markets have Traded in one Direction

To Trade or Not to Trade : The Most Important Question

In trading activity alone does not make money, the right activity at the right time is what makes money. Many times the right thing, is to do nothing. In your actual trading you have to do four things very well to make money. You have to know when to get in. Only enter trades that have the highest probability of success and the best risk/reward ratio. Buy the best monster stocks during up trends. Short the fallen leaders when the game changes and they are under the 50 day. Buy the monster stocks at the gift of the 200 day moving average. Short down trending junk stocks. Go where the trends are. You have to know when to get out. When your trade reverses through a key support get out. When the market trend changes get out of your long positions. When your stop loss is hit, get out. When the stock reverses and hits your trailing stop, get out. You have to know when to stay in. If you enter a stock with the potential to trend let it run as far as it will go. Do not se

Pre - Market Report (13th April 2020)

US markets were up 2% on Thursday. Friday was a Universal holiday on account of Good Friday. Asian markets are Trading flat. SGX Nifty is likely to open on Negative side by around 0.5% . Lockdown is likely to be Completely Extended in India. Official Announcement from the Central Govt is awaited. People's Bank of China has acquired 1% stake in HDFC Ltd. We have Witnessed a reversal rally in Indian Stock Markets and this rally seems to be peaking out near 9400-9500 levels. Fitch Ratings on Friday lowered India Growth Forecast to 2% .  This is the lowest for last 30 Years. Investors should look for Companies which will survive this Crisis.  50% of the listed Companies would be out of Business. Choose Quality Companies & stick to it. I wont be Surprised if Investors get Negative returns for at least an Year from here as things look seemingly poor on Economy front. Investors should be prepared for at least 1-2 Years of Underperformance & stick to comp

The Trader Survey : Ten Questions to ask Yourself

Here are ten questions to ask yourself to see where you are along your own path in the trader’s journey. Are you willing to exit your trade if it gets to a predetermined price level that indicates you are wrong about it? Are you structuring trades through position sizing and stop losses so that if you are wrong you will lose no more than 1% to 2% of your total trading capital on any one trade? Are your entries and exits quantified? Are you consistently trading a specific method or methods that all your trades fit inside of? Do you have a written trading plan that gives you rules to follow while the market is open? Are your trades based out of specific price action? When you trade do you always do what you planned on doing before the market opened? (Homework) Is your #1 priority in trading to make money? Do you review your Trades everyday after Market hours , note down the Mistakes & learn from a loss? Have you done adequate historical back

The Difference between Gamblers & Traders

Yes, the vast majority of traders are gamblers, maybe the majority of market participants are in fact gamblers. The traders that are gamblers trade with no plan and without understanding the odds are stacked against them. Whether it is buying far out of the money options with no method for profitability or randomly chasing stocks on a whim, gambling is when you risk money with the odds against you and have no edge. The losses of the gamblers is where the majority of the profits come from to the winning traders in the markets who have an edge. Now the other side is the traders that consistently win by using an edge that gives them an advantage over the other traders. The winning traders are not trading against the casino they are trading against the gamblers. They have become the casino, like the casino they know the odds are in their favor and they will be profitable in the long run. Like the casino has table limits they have risk management to not over expose themselves to

Pre - Market Report (9th April 2020)

US markets closed 3% higher Yesterday. U.S Markets have recovered almost 45% of what they have lost due to Corona Virus Crash. SGX Nifty is up 140 points in the Pre - open. Interesting Observation which I got is Indian Markets are Blindly copying the U.S markets from past 2 days. On Tuesday U.S Markets were up 8% our Markets also ended 8% higher. Wednesday the U.S Markets were up 2-3% in first half & then closed flat by End of the day. Same Happened in our Markets Yesterday. Will we do the same today? Until how long will this continue?  Nobody Knows. Nifty is likely to move between 8000 to 9000. This seems to be a range where Markets would keep Consolidating. If 9000 Breaks & Sustains then we should expect higher levels on Nifty. Yes we are in a Pull Back / Short Covering rally & I think this has enough legs to last further. Markets have again become Very Volatile. Yesterday Bank Nifty made a swing of 1500 Points just in a span of one hour. I see there is Bearis

Pre - Market Report (8th April 2020)

US markets closed on a Flat note Yesterday. Asian markets are also Trading Flat. SGX Nifty is also down 2%. Even with no Positive News , No Lifting of lockdown , Nifty Futures hit 10% Upper Circuit Yesterday. This came out of Nowhere and nobody expected the same. Got many Texts Yesterday from People who Carried Put Options & lost huge. Thats why I am Repeatedly saying almost on a daily basis to not carry any Positions as Markets are opening with huge gap ups and gap downs almost on a daily basis. Yesterday was a Move that would satisfy the Bulls in short term & also improve Investor Confidence. According to me , the reason for such huge rally was Short Covering. Markets were highly Oversold and shorts were not getting any sort of support/ follow through in past few days. Yesterday they dint have any Option but just to exit their positions to cover their Shorts and this led to huge rally. Again those who Carried long Positions Yesterday are likely to

Pre - Market Report (7th April 2020)

US markets closed 7.5% higher Yesterday. All Asian Markets are also Positive by an Average 2-4% . SGX Nifty at around 8.30 AM is up 400 Points. This Pre - Open rally is Indicating that Markets are not reacting very highly on Negative news as we Witnessed in the Month of March. Those who feel that just by buying Put Options and holding it in Bear Markets can give you profits each & everytime , this is not the case. The Rallies in Bear Markets are very sharp and Fierce. We are in a highly Volatile Bear Market & if one doesn't manage risk Properly you will lose everything in Trading. I have been advicing from almost 2 weeks now that this is a good time to build Portfolio and Accumulate Stocks for long term. Investors first aim should be to pick Companies which will sureshot survive after this Tragedy. These type of Investments will give you good returns in coming Months. Do not start looking for Fancy Names and new Companies. Companies which are down

The Secret to Trading Success

It’s not whether you’re  right  or  wrong  that’s important, but how much money you make when you’re  right  and how much you  lose  when you’re  wrong .”  -George Soros One element of trading that is over looked as traders chase hot stocks, trends, and chart patterns is the importance of taking trades that have the potential to be big wins OR small losses. Big losses will kill your account quickly and small wins will do little to pay for those losses. Our trades have to be asymmetric where our downside is carefully planned and managed but our upside is open ended. This is a crucial element  for trading success and has to be understood and planned for . The risk/reward ratio is used by more experienced traders to compare the expected profits of a trade to the amount of money risked to capture the profits. This ratio is calculated mathematically by dividing the amount of profit the trader expects to have made when the position is closed (the reward) by the amount the trader

Importance of Trading Plan

Successful traders have a plan to win. By carefully putting the odds in their favor for the long term, successful traders will overtake gamblers who rely on random trades and a prayer. If you want to win in any area of life, you must be disciplined, study, and do the hard work. There are no short cuts, and especially not in trading. You need to enter the markets prepared and with a detailed plan to enable success. Here are the components of a trading plan: The Components of a trading plan: 1.  Entering a trade:  You must know clearly at what price you plan to enter your trade. Will it be a break through resistance, a bounce off support, or a specific price, or based on indicators? You need to be specific. 1. Exiting a trade:  At what level will you know you are wrong? Loss of support, a price level, a trailing stop, or a stop loss? Know where you are getting out before you get in. 3.  Stop placement:  You must either have a mental stop, a stop loss entered, a time stop alon

Pre - Market Report (3rd April 2020)

US markets were up 2% Yesterday & Majority of Asian markets are Positive. SGX Nifty is almost Trading a flat terrain now. On Wednesday we Witnessed selling in Bluechip Stocks like Kotak Bank , HDFC Bank etc. This seems to be a phased manner selling by ETF's. Nifty & Bank Nifty both ended Negative by 4% on Wednesday. World Bank has Approved 1 Billion $ Emergency Financing for India to Combat Covid 19. Crude prices are up by 25% as talks on talks between U.S & Saudi Arabia to cut the Production to 10 Million Barells. Honourable PM. Mr. Narendra Modi has announced to post a Small Video by 9 AM today of his Official Twitter handle. This might change Complexion of the Market today. FIIs and DIIs are turning to be net sellers almost on a daily basis now. VIX was down 6% on Wednesday which signifies that at least some buying has begun and Panic selling is stabilising. Expect India VIX is likely to trade below 50 by End of April. I expect the Lockdown t

How do I manage my Emotions while Trading?

The hardest thing about trading is not the math, the method, or the stock picking. It is dealing with the emotions that arise with trading itself. From the stress of actually entering a trade, to the fear of losing the paper profits that you are holding in a winning trade, how you deal with those emotions will determine your success more than any one thing. To manage your emotions first of all you must trade a system and method you truly believe will be a winner in the long term. You must understand that every trade is not a winner and not blame yourself for draw downs if you are trading with discipline. How do I control my Emotions while Trading? Impulsivity is the problem that 90% of the Traders face. They either enter into Traders too early or exit too early.  As soon as Market opens there is an Urge to Trade. Something (Ticklish feeling) happens within your Body & Traders ( Including Me) cannot Control themselves entering into random Trades.  How do I control Impuls

Pre - Market Report (1st April 2020)

US markets closed 2% lower Yesterday. Asian Markets are almost flat. Coming few weeks are highly Critical related to Corona front. Both in U.S as well as in India. Yesterday , a good News came from China front that their PMI data for the Month of March has Increased.  This shows that Companies after getting out of Lockdown can expand their Business & create demand Immediately. The level of VIX shows the level of Panic. VIX is reducing Considerably both in U.S Markets as well as our Markets. Yesterday India VIX was down more than 10% . This is a good sign. SGX Nifty indicating a 1% negative opening as of now. Bank Nifty lot size for F&O Contracts will be Increased to 25 shares per lot from July onwards. Today is Weekly Expiry on Options so there might be some sharp Irriational rallies in 2nd half of the Trading Session. The Plan is to do just Option Selling today. As Time Value keeps reducing the Option Premiums & it's a low Volatile Market as c