Another day of NIFTY going down.
And it was sudden. All the decline happened in just last one hour of trading. If we believe the experts on Business Channels, the cause for the mayhem was the summoning of CEOs of ICICI Bank and AXIS Bank by the Special Fraud Investigation Office.
But everything crumbled. Tata Motors and Lupin made new 52 week lows. These stocks are not connected to PNB scam in any way.
Indiabull Housing Finance was up by 3% at one point during the day. It gave up all the gains and ended up in the red.
Certainly there is more to this fall than meets the eye.
NIFTY move was as in chart shown below:
With such a down move, there was no chance of BUY SELECTIONS doing well and they did not.
For most of the day, SELL SELECTIONS were either slightly negative ( Lupin, SBIN ), sideways ( Tata Motors, Maruti , Bajaj Auto ) and positive ( Ibulhsgf) and then the last hour happened.
Let us review how the selections have performed.
The images below show the comparison with respect to Closing Price on 27/02/2018 and the same on 06/03/2018.
Buy Selections:
Reliance did not do well but Tech Mahindra is just holding its head above the water.
It is natural that with NIFTY declining by almost 3%, SELL selections should be doing well.
Sell Selections:
All of them have done well.
The point to be made is that all these selections were made just by looking at the data and coming to a conclusion about the relative strength and weakness of any particular stock. We could have picked any other stock and results could have been same or different. We have no control over what the market does.
But we can control our actions. That is about exiting if things go wrong. Right now, there appears to be no need for such action.
Review:
Do we add to this list?
BOSCHLTD is showing weakness and trading at 52 week low.
We add this to the list.
Now we have 2 stocks on the BUY list and 7 on the SELL list.
Let us see how the day pans out.
Thanks for reading.
Happy trading.
Comments
Venkat March 7, 2018 at 10:39 am
Very good performance Sir..
To get benefit from this kind of strategy, one should enter all contracts in Futures only right? Options premiums will be very high during start of the month… any advice sir…
Also, futures will have unlimited loss making risk as well… Any better way to get good risk reward in options??? please advice best way for us to enter at least now…
ReplyUmesh March 7, 2018 at 11:51 am
You are doing wonderful. Logic and insight makes investing easy. But I know it to be most difficult job in the world.
ReplyTarun March 8, 2018 at 12:23 am
SBIN, Indiabulls Hsg Finance- 2nd and 3rd worse performing stocks in Nifty on 7th March losing 3.86% and 3.43% respectively. Great shorts.
ReplySBIN fell 9.9 rs. and closed 60 paises above the day’s low and Indiabulls Hsg closed 42.5 rs. and closed 3.25 rs above day’s low. No doubt- they are good shorts and hopefully will remain the same tomorrow.
Tarun March 8, 2018 at 12:29 am
@Venkat: If you are going for futures, better hedge/protect your losses by options.
eg: Shorting a future, buy a protective OTM call. This ensure that you know your risk and a sudden spike doesn’t get you out of the market. Things happen when you least expect them, so always play with limited losses.
ReplyVenkat March 8, 2018 at 4:14 pm
Thanks Tarun.. if not futures, can we do this in Options??? if so when is ideal time for entry? at beginning of the month all premiums will be high, buying call or put will be expensive.
which is best??
ReplyPrabhu March 8, 2018 at 8:44 am
Sir, will you also pl explain what is basis we select these stocks?
ReplyVenkat March 8, 2018 at 4:15 pm
Hi Prabhu.. This post is continuation of earlier post. link below
Replyhttps://optionsnext.com/blog/picking-stocks-for-trading-everyone-can-do-it-right/