Fortune turns like a wheel.
It turned for us on Monday. On Tuesday, it treated us like some poor folks trying to pose as rich and showed us our place. NIFTY moved up by 100 points and is almost back to where it was on Friday, give or take a few points. NIFTY move yesterday made a fool of every expert on TV and the not so expert writing this blog. All of us expected it to move down. People were waiting for 10300, only to see 10600 at the end of day.
Market repeatedly tells us that it is not predictable. But we venture everyday to be fooled again and again.
It was almost the reverse of the Monday move.
Fortunately it did not do much damage to us. A 100 point move caused a further loss of about Rs. 1000 only from previous day position.
MARUTI , M&M, RELINFRA went wrong. In fact RELINFRA had done very well in the first half of the day when PUT 340 went to Rs. 14 level before turning its back on us.
IDEA proved a wonderful idea early in the day when it went below Rs. 39.00. We had an ITM option for a change and it traded at Rs. 2.50. Our happiness had a short life and with the 100 point up move it finally ended the day at Rs. 1.85. Better than the previous day but not where we wanted it. But we take what the market gives.
TATAMOTORS was again a big loser for the day and helped us to gain some value through PUT 180. SUNTV also stayed negative even with 100 point NIFTY gain.
I am regularly sticking my neck out in these pages almost everyday. Thanks to the market, our method and some luck, it is not getting chopped off.
I am sharing my thoughts about the NIFTY gains today.
Let us look at the Top 5 Gainers:
None of the top 5 NIFTY stocks is among these to gainers.
A rally is led by the leaders. None of the above 5 is a leader by any stretch of imagination. Three of them are Oil Marketing Companies which ran up due to falling Crude Oil Prices. They had the story running backwards on Monday. They had lost heavily on increase in Crude prices.
When the rally is not led by leaders, it usually fails. Whether it fails tomorrow or next week can not be judged.
Like all other experts, I too may fail in this assessment of the market direction but it has worked almost every time in the past. So I trust the market to keep doing what it does.
We have seen that sometime a 100 point fall in NIFTY does not do anything for us even if we are having all PUTS. Similarly we see that a 100 point gain does not do much damage at times. It is a good situation to be in. Gains we can wait for, not losing is really important.
No new trades today.
With US Markets almost flat overnight, Asia negative this morning but SGX NIFTY up about 42 points, we may see enough drama today.
Let us be watchful with the trades we have.
Trade cautiously, trade profitably.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.