IFCI @ Rs 50 today…. up 100 % from Rs 25 inside Two months !… and the % Gains on the F & O Contracts have been four fold at 400% !

IFCI @ Rs 50 today on huge Volumes…. In Absolute terms up 100 % from Rs 25 inside Two months !… and the Gains on the F & O Contracts have been four fold at 400 %….. What a Killing !

One Lakh Shares @ Rs 25 would have meant an Investment of Rs 25 lakhs doubling to Rs 50 Lakhs to give 100% Gains inside Two Months…. and Rs 25 Lakhs Invested as Margin in 50 IFCI Futures Contracts of 8000 shares lot each @ Rs 25 would have given you an Exposure to 400000 Shares…. now that’s a whopping Gain of Rs ONE CRORE or 400% inside Two Months !

IFCI’s Book is Rs 70+… it holds a 4.79% Equity Stake through 24, 42, 212 Equity Shares in MCX which opens it’s IPO Offer for Sale tommorrow in the Price Band of Rs 860 to Rs 1032

Look out for IFCI Merging soon into another Financial PSU…. that’s the Government mindset currently to salvage the Company

…and just think about this…. a leading Technical Analyst was aggressively snubbing IFCI on CNBC and even predicting it will go below Rs 10 !…….. when you don’t blend Intellect with Instinct, this is what will happen !

….I may just give you guys a  hint soon on the Blog for another good Play

…It would be fair to assume that those with a  contrarion and aggressive flair who were in touch with me have benefited from IFCI in the past two months

Cheers !

Why Traders cannot ignore Volatility & Momentum & Sentiment as the 81% S & P Stocks Corelation screams out

Traders need to check this out

http://www.financialexpress.com/news/movement-of-big-us-shares-harks-back-to-black-monday/844321/0

The corelation of the top 250 stocks in the S & P 500 has reached 81%…the highest in a long time…the all time high was 88% in the Wall Street Crash in October 1987 when in a single session the Dow plunged 22% !

This means that 81% of the time the stocks move in the same direction….the historical average is 30%….Now this is happening  as a result of a herd investor psychology playing out its macro fears and hopes in herds…selling and buying enmasse…in  testing and unnerving times like these

The CBOE Vix,the Volatility Index too remains constantly high at over 30 

This is a clear and strong statistical support that you got to be real courageous..read as foolish…to take a contrarion stance for the short term….The Trend has to be your Friend in the Short Term…but what Trend !?

Traders,who cannot live without Trading, need to set small stop losses,even if they risk being triggered quickly…unpredictable swings are now part of your trading life…17000 to 16000 then back fast to 17000 and then in a blink down again to 16500…Phew !…Salute the Trader who can make monies here !…whatever be the approach !..Technical or Fundamental or whatever !

Momentum…Sentiment…Liquidity….Valuations…Volatility

It is rational sense to maintain Liquidity to preserve Capital when Momentum and Sentiment are Weak and Volatile and the immediate future is nervous and uncertain and there is no clear visibility…more so as global blues cloud over you,threatening to gather into a Storm…Valuations won’t work for you in the short term

In such situations try playing markets for the short term on Valuations !….it will be frustrating as Markets have a mind of their own and Valuations go unheeded 

So don’t ask me to predict where the Sensex or Nifty or specific scrip will end the day today…or tomorrow…or day after…or a month from now…the risk is too high to hazard any guess

But the Long Term…. 3 to 5 years….. yet holds potential

Last year end I made the Sensex call of 16000 for this year….I yet see some downside in the immediate future,largely on Global Blues,particularly the worsening PIIGS Crisis in Europe…Trichet,the European Bank President has tripped the Euro last week by  confessing he fears the worst read more

Sensex 30…At 18200 levels, 11 scrips are towards 52 week Lows and 5 scrips towards 52 week Highs….NTPC is my choice of lowest risk to go long

Interesting Stats…with the Sensex at 18200 levels,let’s have a look at which from the Sensex 30 are towards 52 Week Lows and which are towards 52 week Highs…should give you some conviction in Sensex Strategies going forward

 

ELEVEN SENSEX  SCRIPS TOWARDS 52 WEEK LOWS …….                 BSE Sensex 18205 on Jun 13,2011  at 11:56 am 

 

Code

Rank

Mkt Cap

Company

Mkt. Cap

Rs Crs

Equity

Rs crs

FV

Rs

Last Price

Rs

52 Week High

Rs

52 Week Low

Rs

Volume

500325 

1

 RELIANCE 

303318.50 

3273.81 

10 

926.50 

1187 

901

237233 

500312 

4

 ONGC CORPN 

229928.53 

4277.74 

268.75 

368

264

182630 

500209 

5

 INFOSYS TECH 

164089.21 

287.07 

2858.00 

3494

2621

27617 

532555 

7

 NTPC LTD 

146686.73 

8245.46 

10 

177.90 

222 

168

70561 

500112 

9

 STATE BANK 

140904.28 

634.99 

10 

2219.00 

3515 

2182

133980 

500103 

16

 BHEL 

93728.39 

489.52 

10 

1914.70 

2695 

1909

22396 

532868 

34

 DLF LIMITED 

38619.26 

339.51 

227.50 

397

210

201276 

532500 

36

 MARUTI SUZUKI 

35207.79 

144.46 

1218.60 

1600 

1136

27532 

532712 

Not in Top 50

 REL COM 

   19412.17

1032.01 

5

94.00 

205 

81 

2711615 

532532 

Not in Top 50

 JAIPRAKASH A 

17447.18 

  425.27

82.00 

141

73

     601016

500390 

Not in Top 50

REL INFRA 

   14518.08

  267.42

10 

544.00

1225

538

    110553

FIVE SENSEX SCRIPS TOWARDS 52 WEEK HIGHS…….                          BSE Sensex 18205 on Jun 13,2011  at 11:56 am

 

Code

Rank

Mkt Cap

Company

Mkt Cap

Rs Crs

Equity

Rs Crs

FV

Rs

Last Price

Rs

52 Week High

Rs

52 Week Low

Rs

Volume

532540 

3

 TCS LTD. 

231448.69 

195.72 

1182.55 

1247 

730

21222 

500875 

6

 ITC LTD. 

147565.57 

773.81 

190.70 

198 

139

196021 

532454 

8

 BHARTI ARTL 

143527.27 

1898.76 

377.95 

400

261

41000 

500180 

11

 HDFC BANK 

109944.42 

466.38 

10 

2357.40 

2518 

1880

8461 

500696 

20

 HIND UNI LT 

69405.95 

221.32 

313.60 

329

251

51998 

 

11 Scrips are towards 52 Week Lows while 5 Scrips are towards 52 Week Highs=> 16 of 30 Sensex scrips,that’s over half the scrips, are towards Lows or Highs……If Sensex crosses 20000 again later this year and moves towards 25000 mid next year as opined by some,it would be interesting to risk some Sensex Strategies going forward….for instance have a look at the eleven Lows and assess whether they will go yet much lower….then they deserve to be replaced in the Sensex perhaps…or will they bounce back late in 2011 and definitely in 2012

….all the 11 Lows look tempting to go long….NTPC is my choice of lowest risk with little downside from Rs 177.90

Cheers ! 

Outperformance Through Equities from a Trading Perspective…Humorously Addressed an Audience of over 100 last night on this

Outperformance through Equities from a Trading Perspective…..This was the Theme chosen by a leading Broking Group at their 17th Foundation Day Celebrations last night

….and Mr Tulsian and I were invited to address 100+ Invitees on this Theme….Interesting and Intriguing……because it was  specifically from a Trading Perspective rather than just an Investment Perspective…..and that they invited  ‘Fundamental’ Guys like us for this…..I suppose if the Sensex had run away to 25000 they would have invited  ‘Technical’ Guys…only these guys can give you 25 trading calls in a day !….but I sense that they sense too that the Sensex is behaving like ‘Ghajini’…goes off in one direction then pauses as it forgets where it wants to or has to go !….so it was Back to Basics and ‘Fundamentals’ to manage risks 

Mr Tulsian spoke before I did…he appears on Stock Channels quite regularly…’Sweet’ Tulsian….he’s known for his affinity to Sugar scrips….feels the Sensex is not fairly valued…but is undervalued at 19000…and that a 2008 Crash like Situation is unlikely to occur again…this year saw a high of 21000+ in January and then a low of 8000 in October…he loves Larsen & Toubro just like I do….who does not ! ?

…I’m 100% sure that those who are selling Larsen & Toubro heavily,FIIs included, and have caused this correction from Rs 2200 levels in November 2010 to current Rs 1650 levels will re-enter again later this year….They’re selling for creating liquidity based on macro concerns…and they have made good to great gains in Larsen & Toubro….and so when they want funds they will sell all or reduce exposure in what they have made gains……it’s not because they think Larsen & Toubro is overpriced…so if Larsen & Toubro looked good at Rs 2200 it looks even better at lower risk price of Rs 1650…that’s basically my view and take on Larsen & Toubro in this correction   

….basically I was expected to deliver an elixir in 30 minutes for what will happen in 300 Trading Days in 2011!…..For Inspiration I made all begin with a Prayer with mine being this: 

“Dear God,I Pray for a FAT Bank Balance and a THIN Body….Please don’t mix these up like you did last year ! Amen ” 

The address,peppered with humour, was well received but the feedback was that half an hour was too less…. guess the Humour did the trick !…….especially  when I conveyed what SEBI really stands for !…….sensed they wanted more of it !…..covered a host of areas on a screen presentation…Macro domestic and Global concerns,Market Dynamics,FIIs,Momentum & Liquidity & Sentiment,Value v/s Price,Sensex last ten years and since inception and where is it headed this year and the next,Determining the Risk Range for Trading in Sensex Scrips,Timing & Tactical Strategies,USA & PIIGS,Investor Mistakes & Situations,Buy & Hold V/s Trading…Future Capital Holdings and Pantaloon Retail….Warren Buffett & Peter Lynch….Personal Attributes….. read more

When Strong Investment Advice from a Leader goes Crazily wrong,it’s not the Leader who suffers !

Human memory is very Short…..In November 2008, one of India’s leading Investment and Merchant Banking and Broking Outfit strongly advised it’s clients to sell off their whole Equity Portfolio…I had blogged it too as it was extreme advice from a Leader..rare in itself

http://www.gauravblog.com/?p=360

  • A Rare Technical Report from a leading Securities Entity has studied the Sensex trends for the last 30 years and made a call that the Sensex shows weakness as it has breached earlier in 2008 a five year support line and in early October has breached the 50 months average….Sensex has now entered a structural bear market….It will fall to a range of 5720-6750,eventually finding support in the range 6150-7150…Pull Back Rally can first take it to 11500 before it resumes the fall again…This is their BOLD STRATEGY recommended

               Only Trade and do not Invest

                         Do not average purchases

                                  Aggressively Sell off Portfolio

                                         Short the Market at Higher Sensex Levels

                                                Trade Long on further 10%-20% upside with Strict StopLoss

Since then the Sensex sought a low of 8000 again in early March 2009 and then has simply doubled inside six months…It never dived below 7000 and 6000…so there was no finding support and stabilising at levels of 6150-7150

If you had followed this extreme advice,you’d have booked all your losses and never had an opportunity through an equity portfolio to recoup the loss…quicker by averaging purchases…..worse you could have shorted a rising market and hit by a double whammy !…At 8000 you were seeking a further fall to bottom of 20% which never happened and you missed the 100% run

But Human Memory is very Short….This Entity is now ‘revisting it’s assumptions’ but it retains leadership position in the Investment and Merchant Banking Field and continues influencing many Investors…While flexing it’s Money Muscle it needs to flex it’s Mind Muscles too,especially before offering such extreme advice !

It’s your Monies at Stake…Think Rationally…Don’t Follow Advice Blindly…particularly extreme advice 

Honestly,I too was bearish at the time but held back such extreme advice because,as I told clients,once you sell all,you’ll never buy again for a long time !…and the markets after seeking bottoms will recover…such bottoms are great buying and averaging opportunities…Clients were pressing to adopt a strategy to sell and buyback on lower bottoms and I was holding them back saying what if your bottom never comes  and the market recovers !…This is exactly what has happened 

Clearly One should have averaged purchases and not have Sold or Shorted…clearly this was contrary to the extreme advice given by this Financial Powerhouse read more

Thanks Karnataka and Andhra Pradesh !….Bengaluru Equity Workshop Concludes Well

Returned late night from Bengaluru at 1 am in the morning as Flight was delayed after delivering a two day Equity Workshop at the weekend…the  eight in a series for a Broking House…It was pouring as we drove to the New Airport,50 + kms away from the City…but we had a Mad Max Driver who drove as if his life,and ours !, depended on it ! weaving at 100 kmph through stranded cars in the fast flooding roads ! and despite incessant rain whipping the windscreen…paid a ridiculous Rs 260 User Fee to access the Airport

Had gone earlier on Thursday,to spend two days at a friend’s 75 acre farm, 20 kms outside Bengaluru,on the fringe of the Bannnerghata Wildlife Park…what a great break !…could hear the silence !…had friend’s three dogs ( Small Datschund and Large Dalmatians!) all over me…Elephants and Monkeys destroy crops and so commercial farming becomes a tedious affair …tried to spot a Gharial in one of his four water harvested ponds on the farm…it had probably slipped in from the forest through the canals….relaxed company , great organic food,fresh vegetables,fresh mangoes,fresh coconut water,fresh jackfruit and fresh rains !…too short a break,though !

Then switched to workshop mode on Saturday Morning….It was truly satisfying…When I threw the House open  for any questions on Sunday ,prompt came the first one “When will you come back to Bengaluru for your next workshop !?….Thanks! Karnataka and Andhra Pradesh ! for some great participation

We had some fun discussing Valuations of Reliance Industries,Satyam and Reliance Power and even Jaiprakash Hydro among others companies…and am glad you’ll were genuine in your reactions when we played the Integrity,Insider Trading and Irrational Behaviour Scenarios

Now you know how Mumbai,Vadodora and Rajkot got excited  on Reliance Ind Valuations in March and April 2009  at Rs 1100 to Rs 1300 !…maybe I should have come to Bengaluru first !

So all of you know what is the appropriate Valuation Basis to use for Satyam…and how you can make some money on it ,based on an event based risk in June 2009 !

You are now acquainted with the Valuation Risks of Reliance Power at Rs 180 and Jai Prakash Hydro at Rs 70 !

Shanteeth,I hope we do get to 23000 + on the Sensex in 2009 itself, as you aggressively suggested at the outset of the workshop based on Technicals…though  I showed you why it looks highly improbable on Fundamentals !…glad you loved the Book I gave you “Screw it ! Just Do it! ” by Richard Branson…now pass it on so someone else enjoys it too ! read more