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Posts Tagged ‘RPL stock’

What can you do if you are stuck in RPL?

Saturday, November 17, 2007 14 comments

A reader wrote:
“plz tell me something about rpl.. i dont how i got trap in this but now it is true that i m totally trapped here.
i m holding rpl nov fut @294 and then again i took one more at @267… now plz tell some thing about this.. and if it wil come up this month or how many months i wil have to hold.. because my capacity of paying m2m is finished..”

Earlier it was Infosys and now it is RPL.It doesn’t matter what the stock name is-the problem is the same. You buy the stock when the whole world is getting into it and then the stock reverses on you. Then you regret your decision and start to hope for recovery in stock price.

A lot of investors entered RPL between 270-290 levels because they did not want to “miss the bus”. Then they compounded their problems by “averaging their losers” rather than cutting them. Now many such investors are facing margin calls and are still reluctant to sell the stock.

So what can you do if you are facing with such a situation?

I can tell you how I am trying to help one of my clients who got stuck in the stock at 280 levels (despite my repeated warnings he gave in to his greed).

First thing we are did was to sell the stock at around 230 levels and book our losses (around 20%). Now it was very hard to convince the guy to sell the stock at such a loss. No one is willing to experience the pain. How I look at this is- I am paying the tuition fee to the markets for learning. Here it was my mistake to get greedy and I ought to pay for my greed.

Secondly as a trader there are always plenty of good opportunities available. If you don’t get out of your losing position you cannot take advanatge of many potential winners which are going to come your way.

So taking the above approach we put our money into Nagarjuna Fertlizer,JP Hydro,Indiabulls and Reliance Capital. And as expected we have been able to recover 70-80% of our losses within a week. And if the markets remain good for another couple of sessions we might even end up making much more money than we lost in RPL!

Coming to RPL-we might have taken a loss on this one but I’d consider it as a temporary loss. As and when stock regains its momentum we will be there with cash to attack the stock and get back our money. But if I continue to hold the stock-hoping for a recovery I might be missing out on many good opportunities. And I don’t know when the stock shall recover.It needs to cross the 230-260 zone to get back to higher levels.

So the solution is simple- Use the rise in the stock to get out and put your money somewhere else. “Hope” is the biggest enemy of every trader. As they say “trading teaches you to view the world as it “is” and not how it “should” be.

Thats why my clients prefer to pay me a little to “learn and earn” rather than pay heavily to the markets!

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Categories: Education, Trading Ideas Tags:

Markets resume uptrend

Thursday, November 15, 2007 8 comments

Yesterday was a day when markets resumed their uptrend. Now the only hurdle that remains is 6000 on NIFTY. If markets are able to take out that, then 6200-6300 is highly probable. How far we go shall depend on how many people go short on this rise.

At the same time we need to pay specific attention to their risks. Global conditions are still shaky and any sharp correction cannot be ruled out. So if you don’t act greedy, you will do well to ride this. Those who have booked profits at 5000 might feel tempted to jump in and we shall wait for such guys to give in to their temptations.We shall be getting out when such guys shall begin to get in!Its all about taking the right opportunities and managing your risks.As you are competing with the best in the world, you need to give your best.

My old favourites like L&T,RIL etc are doing well and some more momentum might be expected in these scrips. RNRL too is showing a renewed momentum and I have made a re-entry into the scrip. RPL seems to be suffering from “over ownership” and every rise in the stock is met with increased supply. It looks like RPL shall take a long time to regain strength. The price action on Power Grid too was not encouraging.Clearly one needs to keep a close watch on the stock.

One of our earlier ideas-JP Hydro is showing considerable strength and 100-105 looks possible in the short term. That might make it a “doubler” for us in less than three months!Still this might rank well behind couple of stocks that have given 3-4 times in last couple of months.

Now I know many of you(also many market commentators) might say that markets have “overshot” on the upside. I agree but our style is all about taking advantages of such moves(read greed). An Adani might be a bad stock but gave us 200%+ whereas an Infy which is a good stock gave -15%. What do you prefer? We just focus on making more money with lesser risk.

IT stocks are staging some sort of recovery but I won’t be taking it seriously till some real strength emerges. This was was more of a dead cat bounce (similar to what ITC did the other day).

Market Watch- BHEL, TCS,INFY

Wednesday, November 7, 2007 4 comments

BHEL is hitting new highs and TCS is hitting new lows. We are playing the trends by being long on one and short on the other. INFY is also back to 1750 levels which are strong support points to take a small countertrend trade.

RPL and RNRL continue to bleed and it might not be bad idea to do some opportunistic buying in RPL from a longer term perspective. There might be still more pain left in these stocks as leveraged players need to bail out and might be forced to sell at ridiculous levels!

Markets are still trying to make up their minds as to what they wanna do next. Its best to be on sidelines and take the next bets when things get clearer.

Next moves on RNRL and RPL

Tuesday, November 6, 2007 25 comments

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.

Categories: Market View Tags: ,

RPL stock fall- a lesson in managing risk!

Tuesday, November 6, 2007 19 comments

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.

Categories: Education, Trading Ideas Tags:

Stock Watch -RPL

Thursday, November 1, 2007 7 comments

Do you remember the time when I talked about RPL at 100 about three months back and the stock again found mention in September at 120 levels.
The stock has already touched 260 levels. Thats 130%+ in three months! Did you even dream such a run? Don’t underestimate the power of trends.

L&T ,RPLs and Reliance Energy’s of the world are powering this market and might continue to do so!

Categories: Stock Ideas Tags: ,

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

Sunday, October 28, 2007 6 comments

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.