Next moves on RNRL and RPL

It looks the whole world jumped into RPL and RNRL during the last two days. This might be one of the reasons for sharp reversals in these stocks. Whats interesting to note is that two days back no one questioned as to why these stocks were going up but on the way down many seem to be worried about future prospects of these companies!

Coming back to the stocks-Those who bought RPL futures in excess of 260 might have to book their losses on every bounce. Those who bought in cash may have to wait a bit. 205 is some sort of support for the stock. Below that 190 is a decent support. The stock shall face resistance in the 245 to 250 zone.

RNRL is in a little better shape with supports around 140-145 levels.

The only issue now is that every rise in these stocks might be met with selling pressure.Unless and until big buying emerges in these stocks, they might not recover fast.

All one can pray for is a smart recovery in these scrips so that traders can trim their losses. Lets see if our prayers get answered.

RPL stock fall- a lesson in managing risk!

Today’s market action was a great lesson in paying respect to “risk”. One thing I often see in the markets is that people enter late and then exit late.

Now for most of my clients who wanted to trade RPL for short term, we entered at 190-200 levels and exited at around 250-260 levels. Those who missed the rally actually wanted to enter on dips at 260!

Now imagine a player who entered in RPL futures at 260, not putting a stop loss thinking that it will go back to 290+ levels. One single day move of -20% wipes him out of his capital. So it pays to be disciplined and pay attention to risk. This is an area where I work hardest with the clients!

I personally feel that those who do not understand risk should stay away from futures markets.

The closing on NIFTY has not been encouraging and most likely it will drift down or sideways. All we need is a good strong closing(above 5950) on NIFTY to pick up momentum again.

Market Outlook

Yesterday was actually not a bad day as it looked. If you were in the right stocks, you might have made good money. Infact, this week has been just too good from short term trading perspective. RNRL has generated close to 80% returns in a week. I had missed this beauty last time but not this time!

Today is an important day from short term trading in NIFTY. Today’s market action can determine the future direction. I am still trading on the long side except for an odd TCS on which we went short close to 1100 levels.

I am seeing lot of action in individual stocks which might actually be good for taking short term bets!