Trading Nifty

Dear RKKarnani,

Good to see you back.

Please read my posts carefully.

I had said that i plan to book profit on the second nifty at around 4400. This nifty was purchased at 4330. So it is preplanned.

My post yesterday had two points to say. one was that the market despite rising did not sustain above its resistance and fell back. It should rise today also, but i am concerned about its close today (today being a friday, it will be a weekly close and will determine further patterns).

You will note from my next post that i am totally transparent on what i do.

Of course, as far as the request my Mr. Ranjeet is concerned for help to get him out, i have told him that he needs to take advantage of all opportunities and hence should be available on phone as well as i should know his financial position in order to really help.

You will note that though on a personal level i did take advantage of a dip at the opening in the market yesterday, i did not show that advantage for the purpose of this thread. I could very well have written that i had purchased say a call at so and so rate and sold it higher and thus inflated my earnings for the thread, but you will note that i did not do any such thing. Any trade relevant to the thread done in market hours is posted during market hours.

It would be follish on my part not to take advantage of opportunities such as the one yesterday's opening gave when i was so sure that the market would go up. But it is impossible for me to write about all opportunities during market hours ( surely i would be taking advantage and watching the market rather than type away for this thread and loose the opportunity especially if the market is very volatile).

Finally, it means that if a golden opportunity/threat does come about in market hours such as the CRR hike, i have to react in market hours (could surely not have predicted the CRR hike and hence had to hedge during market hours when i got to know about it....i make no claims to be an astrologer)


Hope this satisfies you.

With best wishes,

Gaurav kumar

Dear Friends,

(A request to RKKarnani to read this post very carefully).

I expect Nifty to rise again today. We may even see a level around 4400, which should be used to book a profit on the nifty purchased at 4330 (Please note all figures are for Nifty August series).

This is as per the present market pattern. Today being a friday, i am concerned about its close and if the market does retract from its rise, i would like to see its close above 4310. If it does not close above 4310, we may have to consider the possibility of the market going down to about 4200 next week. Thus the caution. This does not mean there is anything to be panicky about.

So this means that we need to have a strategy to tide over such a possibility. In order to do so, i would do either of the following.

1. Book profit only at 4400
2. I book a profit at 4350 (the resistance)

To be very fair and transparent, i propose that the exit level be considered at 4350 (for the nifty purchased at 4330) until and unless i send a post during market hours to the contrary. In case my post does come, members would be able to verify from the time of the post that i am not taking unfair advantage.

The above is to take care of the situation that i may not be able to write a post during market hours if i am not available.

Members would note that this means forgoing Rs. 50/- on the nifty, but so be it.

I have in my previous posts siad that it would be very difficult for me to bail out members, until and unless i know their full position including their finances. I have also said that it requires making use of real time opportunities to get out of trouble.

Since i normally do not get into trouble, i do not have to carry out too many trades, but sometimes do use a good opportunity to make some extra money. but that is not on a daily basis. The thread here is indicative of my strategies and on Nifty alone.

So if any member wants my help in getting out of trouble, he needs to contact me rather than depend on the thread alone.

With best wishes,

Gaurav Kumar

Dear RKKarnani,

Sorry for having reacted again (it will take time to apreciate your questions as being questions rather than a war as i have got conditioned to your earlier posts. My apologies again)

With respect to what is the level to hedge and what the hedge position would be....

I think intraday movements should normally be ignored.. Of course some of them may be opportunities and it would be foolish to ignore those....or for that matter a development during market hours (adverse or favourable) that may lead to change in patterns may have to be reacted to.

Other than that, intraday movements are to be firmly ignored. On days when the market falls sharply and unusually, there may be occassions that i may tell my friends to switch off their terminals as watching the falling prices may make them take a decision in panic.

I think all decisions , whether taken during market hours or otherwise should be well thought of and not impulsive (impulsive decisions are often wrong).

Secondly, i believe, that the market movers want us to be impulsive. So do the brokers. My broker (RM) used to call me every time nifty would change 15-20 points with the news that market is going down or going up. I told him not to do so, but he persisted, till i threatened to switch to a new broker. It is very important not to be distracted by NOISE but to see the broad market patterns.

This does not in any way mean that i am perfect and do not take impulsive decisions. As and when i do, i regret most of those, and continually try to reduce such errors.

Last but not the least, yes due to the above, hedge levels depend on closing figures ( with exceptions such as the unexpected CRR hike), . The hedge instrument depends upon market patterns, likely market moves, as well as how fast the market would move. In addition available finances may put a constraint on the hedge instrument to be used.

So there is no single answer on hedge.

Finally, if everything was so simple, everybody would be making money, isn't it?. Secondary market is all about transfer of wealth. So the system survives by a few knowlegeable persons making money at the expense of the larger population. Of course to keep the interest of the larger poplulation alive, they must win once in a while, just like in gambling. So you have to be knowledgeable and very discilined in order to survive.

Hope you keep on posting..

with best wishes,

Gaurav Kumar

Dear Friends,

As expected the market opened strong and has already hit 4376 in august futures. As i could not put forward a post, we consider the nifty purchased at 4330 as sold at 4350 (as promised in my post earlier today).

We are now holding one lot of nifty which we had purchased at 4530 on 23/7/07. Our position now is

Booked Profit = 8500/-
plus M to M loss on one nifty

With best wishes

Gaurav Kumar

Dear Friends,


Our position is as under

1.Nifty purchased at 4530 on 23/7/07 , current price 4366, M to M = -8200/-
2. Nifty purchased at 4410 on 30/07/07, sold on 31/7/07 at 4460, Net profit = 2500.
3. Nifty Sept series shorted at 4440 on 31/07/07, covered on 1/08/07 at 4340, Net profit = 5000/-
4. Nifty August series Long at 4330 on 1/8/07, Sold at 4350, Profit = 1000/-

Net position

Booked Profit = 8500/-
M TO M = -8200

Net Profit = 300/-

We have a net outstanding position on nifty future (long), with the rest of the funds available for further investment.

Tomorrow is a good day to make use of opportunities.

It does not take a genius to predict that the market would go down tomorrow.

We propose the following courses of action.

1. If the market opens down and stays down , not recovering to fill the gap within the first 5 -10 minutes, we will buy nifty future with the aim of selling it at a profit near the point where gap is filled.

2. Aternatively, if the market fills the gap in the first 5 minutes, we would wait for the market to fall and stabilise and purchase nifty future at around 1130 AM to 1200 noon, and sell it higher for a profit.

Either case, we do not intend to carry the additional nifty future position forward, so it must be squared off tomorrow. Whatever happens, we feel market should be back to around 4300 levels by the close.

With best wishes,
Gaurav Kumar

Dear Gaurav,
Waht levels are we going to see on the nifty on the upside before he end of expiry.

Dear Milindkuyilan,

We expect nifty to hit around 4500 levels at least once this month. This may take time and i would not like to commit on whether it will be the end of the month or before that (this could be after the expiry of this month's future, so call options may end up in losses, but futures can be rolled over).

From the present conditions, it seems that expiry should be over 4300 level but it is too early to commit on that. The patterns become more clear about a week before the future closing.

With best wishes,

Gaurav Kumar

Dear Friends,

We expect that nifty should not fal below 4285 levels (future aug series)

Any fall below that should be temporary. So we plan to buy nifty future in range on 4285-4300 and sell again at 4320 levels.

Gaurav Kumar

Dear Friends,
we got our nifty at 4255 and we plan to sell it at 4290.

Gaurav Kumar

I got it at 4271.40 (In fact I sold it at this rate with 4285.10 as SL)
It opened at 4285.