Another decisive short week
The equity market pulled up its socks on the last trading day of the January series contracts on Thursday and ended in the green. Till Wednesday, the spot Nifty was trading flat to last Friday’s close, after gaining in one trading session and losing in the other.
However, on the triple witching day, Thursday, the market was trading nervous for most part of the trading session. It was the final pull in the last 15-odd minutes by the bulls that boosted the spot Nifty, which closed at its all-time high level of 4148.
If developments in the F&O segment are any indication of the shape of things in the equity market, there is a big question mark on the buying momentum. The rollover to the February series has been good and there was an unusual build-up of over 1.5% net long positions on Thursday.
These are positive signs. But on the other hand, the February Nifty ended at a 19-point discount to the spot. Historically, discounts to the spot Nifty are regarded as weak signals for the market. However, it is too early to comment at this point in time, partly since it’s a long weekend. Further, the next week is also a short week. And the market doesn’t like being disturbed. So, players may like to play safe.
Having said that, let’s look at your open positions. From the table, ‘The Power Of Money’, it appears that you are making a lot of profit. During the January series, you have cumulatively made Rs 2,07,000. This is a cool 20% plus return on your margin investment, including MTMs and brokerage charges.
The common advice when you make some profit is to book it. And the common mistake is to not book any profit. You currently own long positions in Nifty, Reliance Capital, Sesa Goa and IDFC. Book profits on Monday at open on all the counters, except Reliance Capital, which is still in the red and Sesa Goa. If you own two contracts, book at least 50%. If you hold one contract, book 100%. But we continue to advise that continuing to stay long on Nifty will pay you more often than not.
In case you want to keep your Nifty position open, considering the run-up to the Budget, when the market has more or less closed positive, you may opt to cover it by buying a Nifty 4100 put, hedging your risks. The Nifty February 4100 put is available at Rs 87. If the market opens up on Monday, this will be a lot cheaper.
As far as stock-specific strategy for the coming week is concerned, let’s stick to basics. It’s too early to get a trend for the broad Nifty. So, it’s more difficult to make a call on stock positions. It’s a better idea to protect your profits on the open positions in Sesa Goa by selling the future, since puts are hardly traded on this counter.
Or you can book 50% profit on this counter, bringing the average purchase price down. The second strategy seems to be a better idea at this point in time. There is an essence of bullishness regarding bidding of stake by Arcelor Mittal and others. ET reported that bids are in the range of around Rs 2,500 per share. This gives a further upside to the stock.
However, on the triple witching day, Thursday, the market was trading nervous for most part of the trading session. It was the final pull in the last 15-odd minutes by the bulls that boosted the spot Nifty, which closed at its all-time high level of 4148.
If developments in the F&O segment are any indication of the shape of things in the equity market, there is a big question mark on the buying momentum. The rollover to the February series has been good and there was an unusual build-up of over 1.5% net long positions on Thursday.
These are positive signs. But on the other hand, the February Nifty ended at a 19-point discount to the spot. Historically, discounts to the spot Nifty are regarded as weak signals for the market. However, it is too early to comment at this point in time, partly since it’s a long weekend. Further, the next week is also a short week. And the market doesn’t like being disturbed. So, players may like to play safe.
Having said that, let’s look at your open positions. From the table, ‘The Power Of Money’, it appears that you are making a lot of profit. During the January series, you have cumulatively made Rs 2,07,000. This is a cool 20% plus return on your margin investment, including MTMs and brokerage charges.
The common advice when you make some profit is to book it. And the common mistake is to not book any profit. You currently own long positions in Nifty, Reliance Capital, Sesa Goa and IDFC. Book profits on Monday at open on all the counters, except Reliance Capital, which is still in the red and Sesa Goa. If you own two contracts, book at least 50%. If you hold one contract, book 100%. But we continue to advise that continuing to stay long on Nifty will pay you more often than not.
In case you want to keep your Nifty position open, considering the run-up to the Budget, when the market has more or less closed positive, you may opt to cover it by buying a Nifty 4100 put, hedging your risks. The Nifty February 4100 put is available at Rs 87. If the market opens up on Monday, this will be a lot cheaper.
As far as stock-specific strategy for the coming week is concerned, let’s stick to basics. It’s too early to get a trend for the broad Nifty. So, it’s more difficult to make a call on stock positions. It’s a better idea to protect your profits on the open positions in Sesa Goa by selling the future, since puts are hardly traded on this counter.
Or you can book 50% profit on this counter, bringing the average purchase price down. The second strategy seems to be a better idea at this point in time. There is an essence of bullishness regarding bidding of stake by Arcelor Mittal and others. ET reported that bids are in the range of around Rs 2,500 per share. This gives a further upside to the stock.
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