These Few Days

#1
I generally trade in stocks whose range I know. For example, Edelweiss used to trade between around 63.00 and 65.00, Ballarpur between 43 and 46, PFC between 368 and 376. I would buy if the prices were low or short if they were near their daily highs.

But since the past few days, everything has turned upside down. The range in which the stocks trade has broken, and I don't know which direction they will go. On last Friday and this Monday, I bought Edelweiss since they were at the lower end of their range, but with the markets falling, they also fell, and I ended up making losses. I have traded only one day in this entire week because of this.

I don't have much experience of the market as it is not long since I started trading and I'm facing the markets going down for the first time.

Is it possible for anyone to tell how serious this fall is? Will it be start going back to its previous week's levels next week, or is it a short-seller's market now?

I talked to my broker and he said if the market goes down, all the stocks will go down, and at the same time he gives positional buy calls everyday. If Nifty is made up of only 50 stocks, why should it going down also mean a fall in the prices of all stocks?
 
#2
I generally trade in stocks whose range I know. For example, Edelweiss used to trade between around 63.00 and 65.00, Ballarpur between 43 and 46, PFC between 368 and 376. I would buy if the prices were low or short if they were near their daily highs.

But since the past few days, everything has turned upside down. The range in which the stocks trade has broken, and I don't know which direction they will go. On last Friday and this Monday, I bought Edelweiss since they were at the lower end of their range, but with the markets falling, they also fell, and I ended up making losses. I have traded only one day in this entire week because of this.

I don't have much experience of the market as it is not long since I started trading and I'm facing the markets going down for the first time.

Is it possible for anyone to tell how serious this fall is? Will it be start going back to its previous week's levels next week, or is it a short-seller's market now?

I talked to my broker and he said if the market goes down, all the stocks will go down, and at the same time he gives positional buy calls everyday. If Nifty is made up of only 50 stocks, why should it going down also mean a fall in the prices of all stocks?
When in confusion, stay away!
 

Alchemist

Administrator
Staff member
#3
I talked to my broker and he said if the market goes down, all the stocks will go down, and at the same time he gives positional buy calls everyday. If Nifty is made up of only 50 stocks, why should it going down also mean a fall in the prices of all stocks?
Rest of the market is not going down because Nifty is going down.

Nifty is going down because the entire market is going down.

The proportion of stocks that go up in a bull market is lower than the proportion of stocks that go down in a bear market.

I had read this somewhere many years back.

70% of the stocks go up in a bull market, but 90% of the stocks go down in a bear market.

I have never verified these ratios, but I agree with the idea.

I can think of many stocks that are lower than they were when the market made a panic bottom in late 2008.

However, I can't think of any stock that went up in the January 2008 - November 2008 period.
 
#4
This is the time to stick with large caps only. You can buy large caps which are decently priced.

Start accumulating the stocks and I am very much confident that we will bounce back in 1-2 months. Just keep accumulating the large caps which are decently priced.

You can start with RIL as it is at a very good price and when the markets will bounce back, it is very much possible that it will lead the rally.

Other large caps can be purchased as well. Don't go for small and mid caps as they can fall much more.

Purchase those stocks which are fundamentally well priced.

I prefer stocks like RIL, Tata Steel, JP Associates, Reliance Infrastructure etc.

I will start accumulating from Monday as the markets are expected to bounce back in maximum 2 months. My personal belief is that the markets will take out new highs in 2 months.

Don't buy stocks for short term as volatility in the short term is expected. Buy stock with a time frame of 6-8 months and you will definitely make a nice gain.
 

man4urheart

Well-known member
#5
For the record, my counts are finished on upside, I think all bounces will be opportunity to short or liquidate your holdings. Market today broke its 1 month support



There is only one possibility of alternate scenario, if market respects 18000 level and move above, then one more wave is due on upside.

But, for now since market broke 1 month area, I will flow with flow!
 
#7
It's going to take that long? It means no intraday from now on?
Definitely, no intraday!!

The markets are expected to fall further. It may rise 50-100 points on Nifty, but don't get trapped as of now. Wait for clarity to emerge.

Till then, don't go long.

If, you want to invest for long term, start accumulating from next week in small tranches.
 
#9
Refer to this article in ET on 6th Nov.

Some highlights

....................Usually, FII fund managers book some profit in their portfolios towards the end of the calendar year, and the same could start now. “They need to take some money home which will pay for their bonuses,’’ said an institutional dealer with a domestic brokerage house.

Market analysts therefore feel that there could be a correction of around 10 % in the stock markets over the next few months. Usually profit taking happens in November-December and FIIs come back to the market after they get their fresh allocations during the second and third week of the new year. This year, however , things could be a little different and they might continue to sell, said Arun Kejriwal, director, KRIS, an investment advisory firm.

“They might decide to sell now because they have made good money in their portfolio . Additionally, the rupee has also appreciated against the US dollar. So if they sell now and take money home, they would benefit on both counts,’’ explained Kejriwal.

Another factor, market players pointed out, that could affect the rupee is the rising crude oil prices . After the US Fed announced its second stimulus package worth $600 billion, sensing higher demand for oil in the US, global crude oil prices have shot up and is trading at $87 per barrel level.
 
#10
I generally trade in stocks whose range I know.
Is there any stock which trades in the same narrow range for long periods of time?


I talked to my broker and he said if the market goes down, all the stocks will go down, and at the same time he gives positional buy calls everyday. If Nifty is made up of only 50 stocks, why should it going down also mean a fall in the prices of all stocks?
Herd mentality, maybe.

I am very much confident that we will bounce back in 1-2 months.
What is the basis for this prediction?

It's going to take that long? It means no intraday from now on?
I never done trading, but I wonder why no intraday when the market is down?

For a trader what difference does it make whether the market is up or down.

Not that I agree that the market is down - I still feel the market is very high. I can hardly find any under-priced stock in this market.

Usually, FII fund managers book some profit in their portfolios towards the end of the calendar year, and the same could start now
From a fund manager point of view what exactly is profit booking?

Saying I am a fund manager, my fund has currently 3 stocks

stock A worth Rs. 1000 at current price
stock B worth Rs. 500 at current price
stock C worth Rs. 750 at current price

My Total Fund value is 2250.

Now I book profits on A & B - I sell them off.

So now my fund's portfolio is

Stock C - Rs 750
Cash - Rs. 1500
Total fund value is 2250.

If they use the cash to buy new stocks X & Y.

Again, their total fund value isn't going to change.

So how exactly does booking profit help them get better bonuses?

Are they evaluated only on stock they have already sold? Shouldn't they be evaluated on how much they increased the fund value or NAV or something like that?
 
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Atiker

Active member
#11
Originally Posted by Prudent_Investor
Usually, FII fund managers book some profit in their portfolios towards the end of the calendar year, and the same could start now
From a fund manager point of view what exactly is profit booking?

Saying I am a fund manager, my fund has currently 3 stocks

stock A worth Rs. 1000 at current price
stock B worth Rs. 500 at current price
stock C worth Rs. 750 at current price

My Total Fund value is 2250.

Now I book profits on A & B - I sell them off.

So now my fund's portfolio is

Stock C - Rs 750
Cash - Rs. 1500
Total fund value is 2250.

If they use the cash to buy new stocks X & Y.

Again, their total fund value isn't going to change.

So how exactly does booking profit help them get better bonuses?

Are they evaluated only on stock they have already sold?
Shouldn't they be evaluated on how much they increased the fund value or NAV or something like that?
Some PMS or fund managers charge on profit booked. (and never on loss booked ;))

e.g Sharekhan's "20% profit sharing on booked profits on quarterly basis."

Another point is they anticipate market to go down in short term but want to lock their bonus.

e.g Share ABC and XYZ fluctuates between 100 and 200 in a quarter. In Oct it is 100; 200 in Nov and again 100 in Dec.

To maximize brokerage from profit sharing it is prudent to churn the portfolio a lot when near the peak.

Book profit in one overvalued share, get the profit share, buy another overvalued share get the brokerage.

In short screw the client.
 
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#12
Can anyone please tell what happened today? Is it a new scam or is it the usual FDIs selling off or some new reason?

After many days, I made a long position with a large amount on Skumars yesterday (my broker's call of buy at 87, target 93, stoploss 84). Its normal lows were around 83, so I thought today it won't go that low and bought at 86 X 700 instead. Then it broke the stoploss on that same day, and today it fell to 64.35. The last time it went below 70 was on 7th July (69.50). Now I am sitting on a huge loss and I have to sell in one or two days since I bought the whole thing on margin and have got a negative balance.

I also bought Nelco for intraday last week but can hold it; I bought at 123.40 X 200, today it hit a low of 96.50. The last time it went below 100 was 24th February :eek: when it made a low of 98.80. I started looking at its previous data and my BP kept rising as I went back a month one by one. At this rate the market will keep falling till it hits zero, where there will be a buying opportunity. :vollkommenauf:

It seems only delivery based trade without using the margin is what should be done now. Then you can keep holding and it doesn't matter if the stock falls.
 

Alchemist

Administrator
Staff member
#13
Can anyone please tell what happened today? Is it a new scam or is it the usual FDIs selling off or some new reason?

Now I am sitting on a huge loss and I have to sell in one or two days since I bought the whole thing on margin and have got a negative balance.

It seems only delivery based trade without using the margin is what should be done now. Then you can keep holding and it doesn't matter if the stock falls.
There were rumors that even more operators/brokers are going to investigated by SEBI and other regulators.

I have no idea how much of this is true and how much isn't.

I have no idea who sold today, but looking the price erosion that happened in different stocks, I think everyone was selling . :D.

I didn't buy anything today. If we have one more such down day, I may pick up a few good quality stocks for the short-term.

Trading on margin in such a volatile market is suicidal. Buy only if you can take delivery.
 

Alchemist

Administrator
Staff member
#15
Hey Alchemist which value stocks are you talking about to buy?
I haven't made any list as such.

If you are going to put in lot of money and want to hold for the long-term, go for stocks with stable businesses - companies whose businesses aren't generally affected by economic conditions.

e.g. Rural Electrification Corporation.

or you can buy stocks with good dividend yields.

e.g. GIC Housing or Can Fin Homes. Can Fin Homes isn't currently paying much dividend, but has potential to pay much more.

If you are want to trade short-term, you should be buying the stocks that have fallen the most.

However, don't put much money into the markets and avoid stocks that have been named in the various reports.
 

Alchemist

Administrator
Staff member
#16
Note:

I am not buying any of the stocks that I have mentioned in the earlier post.

I think it is best to wait for even lower prices.
 
#18
Its normal lows were around 83, so I thought today it won't go that low and bought at 86 X 700 instead. Then it broke the stoploss on that same day, and today it fell to 64.35. The last time it went below 70 was on 7th July (69.50). Now I am sitting on a huge loss and I have to sell in one or two days since I bought the whole thing on margin and have got a negative balance.

I also bought Nelco for intraday last week but can hold it; I bought at 123.40 X 200, today it hit a low of 96.50. The last time it went below 100 was 24th February :eek: when it made a low of 98.80. I started looking at its previous data and my BP kept rising as I went back a month one by one.

"If past history was all there was to the game, the richest people would be librarians." - Warren Buffett
 
#20
Every few days the markets crash and the TV channels report that it happened because of the FIIs selling off. If these people keep selling off all the time, when do they buy, when it gets slightly lower? That's short-term trading. I thought FIIs were in investment. :biggrin:

Today Nifty went down to 5702.85 when I last checked. This guy from IIFL says it may go down to around 5400:

Markets may drift to 5400 on FII concerns: IIFL - CNBC-TV18

Does that mean we should buy around that time and wait for 6000? Is it possible that we buy around 5400 and it goes even lower? I wasn't around in 2008 but what I've read about it is scary.
 
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