Meet a Rocket- Apollo Sindhoori Capital

Apollo Sindhoori is one rocket stock which has more than doubled in 15 trading sessions! I had recommended the stock at 235 levels to my clients(not discussed on blog) in the beginning of the month and the stock is now trading close to 485. That is 105% in less than a month!

Who knows where will it go?And if you ask me “why” it is going up, I will disappoint you. My job as a trader is not to follow “reasons” but follow “prices”. By the time you find out the reason and feel convinced, you find yourself in the middle of “missing the move”.

This again an example of buy higher and sell higher. Many such rockets are waiting to go higher.

One such good bet can make up for many average bets. Playing for 3-5% bets is not what I aim for(unless you are playing stock futures). My clients want “doublers” and “outperformers” and thats what I intend to give them.

So play trends and manage your risks.

Stock Watch-RNRL, Reliance Capital,JP Hydro

The markets seem to have digested the RBI policy event quite well and is holding steady.

Keep an eye on RNRL and Reliance Capital. Botht these stocks are hitting new highs and can trend higher.

Reliance Capital has already gave 100% since we first talked about it on the blog.

RNRL has been a recent bet and looks a good momentum play. Only yesterday I had asked people to switch to RNRL.

JP Hydro-again an old pick is looking set to give us 100% returns(in  1 month)  from 50 levels!

Keep an eye on these beauties.

Sensex kisses 20,000 -Mukesh Ambani becomes the richest man in the world!

Sensex kissed 20,000 for the first time led by the rally in the capital goods stocks. Now didn’t I tell you that it is a good time to pick stocks because most of the people might be thinking of slowdown in FII flows and might be in a wait and watch situation. Now what would those guys be thinking? Will they dare to enter now?

One important thing to notice is that the breadth is getting narrower and very few stocks are participating in this uptrend. It will become more challenging to construct the portfolios with right stocks.

Tomorrow is RBI’s policy meeting and if market indicators are anything to go by, one might see a status quo on interest rates. All housing finance companies’ stocks were going through the roof and banking stocks were also trading firm.Has the market correctly read Mr. Reddy’s mind this time?

While writing to clients last week, I had talked of a 6000 level on NIFTY but I never expected the level to be reached in 2-3 trading sessions! Anyways markets are there to surprise you.

One good thing about this move is the lack of general euphoria as many people were kept waiting on the sidelines. Its tough to re enter markets if you have lost big time on sharp corrections.

First it was was the “pain of loss” and now they will feel the “pain of missing out”.

So just ride the trend till it bends! These are good times-make the most of it.

I am eagerly waiting for the day when Indian economy crosses the resistance level of 10% growth . One it crosses that, the growth trajectory shall alter.

One more thing- I used to tell my friends that in 5 years Mr. Mukesh Ambani shall be the richest person on earth. Who knew that he will reach that milestone in 5 weeks ?

Now all I can say is that gap between him and No. 2 shall be big in the coming years. Reliance has just started!

Market zoom again-L&T,BHEL and RPL trend higher

As I said last week, I am betting big on a huge upmove. Most of the bets have worked out well as of now.

These markets can surprise a lot of people on upside. So stay put and ride your profits. Also this is a good time to cut your losers and get into the winners.

I won’t take a shot at targets but I can imagine very big targets if this move works out as it has in the past.

My favourite large caps like L&T, BHEL ,RPL etc are leading  this rally. The challenge lies in outperforming the index and so far the going has been smooth.

Some big winners -L&T, Divi’s Labs, Adani Enterprises,GE Shipping,RPL,SBI

When the markets are up, it is futile to talk about winners. So lets talk about some big winners today.

L&T-One of our three musketeers is up 10%. The stock has more than doubled since I first talked about it on the blog.

Divi’s Labs- My favourite play in the pharma sector is also up 10% touching lifetime highs.

Adani Enterprises – The stock is one of “really big” winners! The stock has gone from 300 levels to around 850 levels in a quick time. Thats almost 3 times in 3 months! Now I know some of you say that the stock might be rigged but I’d ride till it refuses to come down!

GE Shipping- This was a late entry to the party. The stock is trending up nicely and might be the next multibagger!

Keep also an eye on the SBIs, RPLs and IFCIs of the world.

Those who follow “reasons” are still sticking to the Infosys’ and TCS of the world. They will do anything to “explain” the underperformance and “bright future” of these stocks. I’d jump in these stocks as and when they start to show promise.

Markets back to 5700-What next?

It is party time again on the street.Many stocks are hitting new lifetime highs and markets seem be back on their feet. I think it was not a bad idea to go long after 5350 for aggressive traders.

Yesterday, lot of people were nervous about SEBI and we were busy picking stocks on consolidations . I am playing for a big big move on NIFTY in coming weeks. While people will talk of “liquidity concerns”, one can utilize that skepticism to buy stocks.

It back to playing momentum(high risk high gain game)! But keep in mind that a CRR hike(negative for banks) and a Fed Cut(positive for liquidity) might be on our way in the coming week. Fed cut is almost sure and CRR hike is almost impossible to guess (who can read Mr. Reddy’s mind ? )

I am taking lots of bets for the coming weeks (mostly on the long side). Lets see how they work out.

Are Indian stocks being rigged?

This is an interesting story of how one “Mr. India” is rigging the markets big time. Let me know what you think of this story.

This story also tells you why “company news/announcements” are not always reliable. Also company balance sheets are not reliable!

NIFTY rebounds sharply-Should one jump in and buy?

The markets as usual remain volatile. I feel we need to get used to such wild upswings and downswings. This market is definitely not behaving like the usual 2003-2007 market. This is more like the 1999-2000 market. As long as the markets remain in a long term uptrend(6 months+), sharp corrections within that uptrend present good buying opportunities for the longer term guys.

Short term guys are having nightmarish time. One goes long thinking that markets are going to go up and the next movement they turn down. One goes short thinking that markets shall go down further only to see the markets rebound sharply. So it might be all painted in red for a few short term players! Do you still want to “guess” the next move on NIFTY?

This is precisely the reason, I ask people to stay away.

Actually what happens during such huge intraday moves is that people feel the urge to jump in. The game looks so easy from outside and one thinks about generating 5-10% returns in day. And once you jump in and the market goes against you, then you turn to God to help you get out of this mess

Coming back to markets. The SEBI chief clarifications seems to have done wonders for the market. I feel more than the P-Notes people were more concerned about the “long term policy” on controlling capital flows. As of now SEBI has hinted that th move is more towards cleaning the system and ensuring transparency. As far as liquidity is concerned, it might take a small hit after Oct 25.

Anyways, no one questions the positive sentiment the market is witnessing on account of such moves!The short term trend is definitely up and the bulls might push the index further up. The rebound has been so fast that all the bears might not have found time to cover. At the same time the bears are not going to give up so easily. Bulls for sure have an upper hand as of now. The NIFTY might take a dash at 5700 if bulls have their way. 5100 remains a rock solid support on the downside.

Now what can you do as an investor in these maniac times?

If you are an aggressive trader and sitting on profits, there is no harm in riding this uptrend. This time situation is better because last week’s failed upmove has created lots of sceptics.

If you are a conservative trader then it is better to stay away from market. Better take the much needed holiday and hope that the markets shall be saner when you come back.

If you are a longer term player and didn’t buy anything on these sharp corrections, then this is a difficult period for you. You can buy small quantities of stocks if you feel comfortable with the risk. Just keep this in mind-this uptrend can result in 6000+ on NIFTY or a 5000- move.

In nutshell, it all depends on your risk return profile. If you are a 15-20% per annum kind of investor, you might stay away. If you are a 50%+ kind of investor, you might jump in now as you might have already crossed 50%+ return for the year and might be willing to take more risk.

So find out out who you are and devise an appropriate strategy.

Good luck !

Market Strategy in volatile times

Markets have been extremely volatile and have corrected sharply from the 5700 levels to 5200 levels. The sharp correction was not entirely unexpected but the huge volatility is of concern. Lot of market participants are feeling nervous and selling in panic. The pain is especially felt in the F&O scrips where the leverages are high. Those who entered early are taking profits off the table while those who entered late are cutting their losses. At the same time a lot of those who were on the sidelines are doing some opportunistic buying at lower levels resulting lots of intra day volatility.

What you do in the markets depends on lots of factors. If you are a short term trader, it is better to stay out till the volatility subsides. Taking directional bets is extremely risky. One can also play through options keeping in mind that the trend is downward. These are times to preserve your capital rather than be adventurous.

If you have a slightly longer term time horizon, then you can definitely do dip buying in large cap scrips. At the same time one needs to remember that the downtrend is still not over for the markets. These markets can also go for a deep plunge. So one needs to be mentally prepared for some pain on the long term portfolios.

Technically 5100 and 5000 remain short term supports.Below that 4800 and 4500 is possible. On the upside 5400-5500 remains a resistance.

I am just advising short term traders to be on sidelines and telling longer term guys to put limit orders to grab their favourite scrips. The atmosphere has suddenly transformed itself from excessive greed to some fear. It needs to be seen if this fear can overshoot itself on the downside! Those who keep calm and are able to execute their strategy shall come out the winners.

Some simple questions to ask

What I found fishy about the whole episode was:
- Why didn’t the market regulator offer a clarification before the market open?
-What took the SEBI chief so late to come at 12 PM to clarify things-especially on the derivatives rollover?
-Why did FM come at 10:30 and not at 9:30 to clarify the policy?Infact he offered nothing to calm the nerves. All he said that “FIIs were buying” whereas trading was halted within 5 minutes of trade!

-What is SEBI’s role- to protect the investor or use the stock markets to regulate capital flows?

Our regulators are too good in creating chaos.Many investors have been butchered because of this irresponsible communication.

I am seeing such “engineered” falls for the first time

Will SEBI please do an investigation to find out as to who benefited from today’s fall?

Anyways it is a day to remember. A day to remember that “risk management” is more important than anything else.

Looks like opposition is reading my blog! Read this.

The Govt Induced Correction!

Now this is called-govt induced correction. SEBI decided to clamp down on P-Notes at exactly the wrong time. Anyways, one has to live with it. We might never know the reasons for this action and that too at this point of time.

RBI wants to stem the dollar flows but I doubt it shall be possible in longer term. Global investors are selling US assets and moving into commodities and emerging markets. So till the US shows promise again, these flows cannot be stopped.

Does it mean that SEBI shall ban FIIs from Indian markets some day?

This is party time for bears! I suspect if some of them are behind this “artificial” correction.

Market action-The day of big winners!

The markets might have ended flat but I see couple of big winners on the screen. This market is not about winners but about “big winners”.

REL and Relcap are the usual suspects. One doesn’t even bother to mention them. Both of them have been decent winners giving close to 100%. They might be the next multibaggers.

Joining the party today was Tata power which went up like 25% in a day!People say its a bubble but I am riding the stock from 630 levels and have already made more than 100% in 3 months. Who cares if it is a bubble or not?

Educomp was another big winner in being up 16%. This has already been a multibagger!The stock has multiplied more than 20 times since its listing in 2006 beginning.(from 155 to 3650)

Another big winner today Siemens which was up like 10%. The stock has the potential to trend up higher.

Nagarjuna Construction, Divi’s labs and Glenmark were other stocks which continue to trend up nicely.

Long term moves are fine but whats definitely surprising are the short term moves. 30-50% in a week looks so common!

The index definitely needs some rest and today’s consolidation was good for the overall health of the market.Also, when index goes for consolidation, there is a brighter chance for many stocks to outperform.

The volatility is not coming down and looks like we have to live with it.This market is definitely acquiring new character! Time to work hard and come up with new techniques.