Tomorrow British public will vote for/against Brexit. But I strongly feel it will vote in favour of Brexit. What is going to be impact on “economies” of the world or for that matter to India is a subject of big buzz these days . But in nutshell my opinion is it’s going to make difference to Britain most(my opinion is negatively) and for the rest of the world its going to be non-event, apart for a few jitters in world market.
Markets going exactly as per my last blog post (http://valuecm.com/blog/2016/03/05/my-market-outlook-buy-any-shit-you-will-make-moneymay-be-more-may-be-less/ ) since the feb end lows of the market. And these are the opportunities(if it happens) for fresh/re-entries.
To be short and precise I expect a decent dip (not a crash) immediately after the outcome of the referendum . And I would love to see that to have a quick gains in the bigger cycle mentioned in my last blog post(link above) . Index wise following should be the strategy and I expect it to happen:
In the panic (if what I have judged about the outcome of referendum is right) NIFTY should test 7950-7880 (today’s closing is 8270) kind of levels and buying around those levels can immediately give retracement to 8200 and further up to 8600 in very short term. So if get that chance that will be a boon to those “left outs” to have a good entry point.
Bank NIFTY can be a mint tool in the above said scenario and can test sub 17000 levels(today’s closing 17892) and 17000-17100 can be a good entry point for immediate retracement to 17800 and further up to 18400-19200-19800-20400 in very short term.
Dow jones being more mature can see 17400(today’s close 18011) and will be good to buy in 17400-17500 levels for immediate retrenchment to 18000 and further rise to 18600-19400 in very short term
Though I am lazy to post a lot will try to keep posting on twitter (@valuecm) and as always persons in contact will keep getting stock specific ideas with real-time trade positions and index updates .
Finally this will be a good time to make a killing in options.
FII Activity for the Past Week
India VIX(Weekly Change): 11.8875 -0.4775 -3.86%
NIFTY PCR Current Month:1.13
Index PCR: 1.03
Highest Open Interest in NIFTY
Call : 8200(7522600) CE Put : 8000 PE(8427300)
Federal Reserve as expected did nothing, and when it has already stated what it is going to do i.e. start raising rates from early 2015 it’s foolish to expect something new every fed meeting . I know several persons who were extremely panic because of this fed meeting and most of those fearful guys cut their positions at the lows of Thursday’s first 10 minute(I know at least few persons who were holding good long positions since long time and cut that day at bottom ) , but what happened after that you all know well. We in our earlier post has clearly said : It’s time to be greedy and it continues .
As we see 8000 PE and 8200 CE has highest OI so its normal to expect expiry above 8000 and below 8200 . But there is a big but , FII’s are continuous buyers of options and sellers of index future and that is not in small quantity but just for past two weeks it’s 6615 Cr and -2269 Cr respectively . So expiry can give big big move . Which is expiry bet? Definitely few things for Paid Subscribers and can’t give exotic platter in free lunch. For expiry bet the price is 15000/-
Big stocks move coming
There are at least 15 F&O stocks we have identified which are going to give 20-50% move(some in negative direction!! in-spite of positive medium term market outlook) and 6 pure cash stocks which are ready for 30-300% returns . Serious persons may inquire for the same on mail(firstname.lastname@example.org) or WhatsApp
Today’s Close: 7932.90 All time High: 8180.20 52 Week Low: 5700.95 Down from All time High: 3.02% Up from 52 week low : 35.82%
So as we see we are just 3% down from the top and people are crying as if market has crashed , but their crying is not without reason some(or most) are in deep losses . Reason? Definitely not a small correction of 3% ,then what ? There are multiple reasons :
- Most people sat on sidelines and made their positions on the top(this was definitely not all time top) and those people after booking losses will again do the same thing on some other top and in between market will be a bad place to be i for them.
- Even if they made positions on the all time top (say at exact mathematical top) , its down only 3% , but they make “huge” loss and the only reason behind that is their highly leveraged position . Appropriate quantity according to ones capital is never followed . On the sidelines I want to highlight the most important fact of our paid services is that I always suggest clients quantity according to every individual’s capital and that’s most important aspect of any of our paid service . A simple calculation is if you buy NIFTY by paying a margin of say 40000 on say 8100 you are leveraged 10 times and what most people do is they do it to the fullest of their potential meaning a 3% movement in their direction will make them richer by 30% and in case of opposite direction its -30% , and in that case they won’t be able to take the next position and will “try their luck in options” .
- Most people want to make quick by Options ,but they are good only when handled properly . And by proper handling it is not only meant that you buy the “right” call/put , it means you buy the right quantity, and also right strike and most important even if market is bullish or bearish to know whether to go for option or not as even after good spot movement options might not perform at all . The current example is 8000 NIFTY PUT suppose one bought on 2nd September expecting a fall in NIFTY , his/her trading direction (for small gains) might be right but that put was 80 that day and today also after almost 250 down from that day high of that put is 88 . And even if we consider extreme ,i.e. he bought that day on lowest price 56.25 (NIFTY fut high that time 8139) one can’t sell in mere Rs. 32 gain (even assuming he would have managed to sell at exact top) as in case off loss risk was that of 56.25 so its quite reasonable to expect similar returns. But on the contrary in just 2 days period if one had bought 8200 Call on 1st September at say Rs. 40 (low was 35.9 but I am picking 40 as in our paid service we had bought at that level and several trades were executed and confirmed at that level) on 3rd September the call made 84.9 but we take 80 as selling level (again reason same as above) call became double and NIFTY moved only 100 points. So the point is not to boast what I did but , whether to buy option or not and which one to buy.
There are different permutations and combinations of above three factors to make HUGE losses even in very little opposite market movement . And what my paid service separates from the free ones is not the quality of calls but the number of calls (actually lesser than in free service) and saving from above three .
Now we come to the trading setup, and further market direction .
On that I have only few words to quote from Gordon Gekko : Greed is good and its time to be greedy . In plain words market rising has just started not ending here. And it has long long to go . The current rally has started from 7600 so we are just 600 points (at recent peak ) or 350 points at cmp into rally. Bookmark this post and watch after each 800 points rise starting 7600.
How to be successful in achieving that , again from Gordon Gekko : Buy my Service. As money can’t be made be made that easily , either put a lot of efforts of yours and and a lot of money for gaining experience or simply pay for that.