My EOD Stock trades......updated regularly

[Nifty Trader]

A big hello to everyone here. My name is Jai & I have a background in business (HR Consulting & Renewable Energy to be precise). I am based in Mumbai & have been an avid follower of the stock markets for the last 9 years & in that process, tried my hand at all forms of trading – intraday, positional, long term investments – with a view to understand the markets in greater depth.

Through this channel, I aim to share my experiences & hope that it benefits a few forum members in one form or another. As they say, it is cheaper to learn from other people’s mistakes & that is esp. true when it comes to trading the markets

I shall also be posting my own trades on an EOD (End of Day) basis as regularly as I can with entry price & SL. As the SL is trailed I shall update it here.

The main features of this trading system/method are:

1) Stop Loss is always fixed before trade entry whereas target / exit to be determined by the market i.e. we are prepared to lose only x amount but will take whatever profits the market wants to give us. This may be x multiplied by 2,3,5,8 etc. This way, risk-reward ratio in our favour.
2) Typical holding period - anywhere between 1 day to 1 month.
3) Trades placed before the trading day begins
4) No watching the markets intraday / real-time i.e. a passive system
5) Trading in Cash / FnO market on both Long as well as Short side depending on the trend
6) Returns to be evaluated on an annual basis
7) No watching of business channels so as to avoid the role of external influences
8) Only stocks will be traded, not the indices
9) Capital to be divided in equal parts & no more than 4-5 trades simultaneously taken at any point in time

Pl note that this is not to be considered as trading advice or a recommendation & is purely for information & discussion purposes. Pl consult a certified finance professional for trading advice & expertise before initiating any trades.

Look forward to interacting with fellow traders.

 

[Nifty Trader]

My experience in the stock markets:

I developed an interest in the markets somewhere in early 2002 & it was born out of my desire to earn a return better than the 8-10% offered by bank fixed deposits (FDs). I realized very early, having read a lot of books by successful businessmen, that in todays day & age, I should not be the only one working while my money just sits around in my bank account doing very little. My money should also be working equally hard! This is why the rich keep getting richer they have their money, assets, employees all working hard to generate returns for them. Because my FD money is doing very little that is exactly the return I would get at the end of the year very little! Now dont get me wrong. Theres nothing wrong in parking your money in FDs but no one ever became wealthy on bank returns. With inflation hovering around 9-10% the purchasing power of money is just about staying the same, forget enhancing the capital. If you count taxes, the real effective return is actually negative.

With the motive being clear I set my sights on the most logical place I could think of for generating the superior returns I was seeking & without compromising my work the stock markets. I remember following the stock price of NIIT everyday in the business section of the Times of India & noticing that the price would oscillate between Rs. 240-260. i.e. it would hit 240 & go up & hit 260 & move back to 240. I thought I had discovered something great & I made money trading what I later found out was called a channel. In 1 week I was able to make more than what my bank offered me for an entire year! I thought to myself well that was easy. It would have remained easy if only the markets were not, well, markets. One day the channel broke on the downside & I had to exit at a loss wiping out all previous gains. Sounds familiar, doesnt it? So that was the end of strategy 1.

I tried my hand at options then as some experts told me they were safe. Some failed trades (strongly recommended by my broker) later I was down both in terms of money & more importantly, confidence. I did a lot of reading to improve my knowledge & finally settled on long term investing as a strategy. At this point, due to time constraints, I didnt want to be involved with the markets on a day-to-day basis. So I bought a few stocks & reviewed them once in a few days. The time was somewhere around mid to late 2003 just when the bull market was beginning to take shape.

Heres a summary of my investments & some comparisons. There have been other investments made but those have been much later into the bull market & hence, have not been considered. The table below might not be very clear to understand. Hence, I have uploaded a Word document (titled "Trades taken before the bull market" as well in my introduction thread which can be found here - http://www.traderji.com/introductions/65531-hello-all-trading-last-9-yrs.html. Somehow, I'm not able to attach it again here in this thread, probably due to storage space constraints.

No. - Scrip Name - Entry Price - Peak stock price - Peak Returns (%) Todays stock price - Todays returns (%)

No. Scrip Name Entry Price Peak stock
price Peak Returns
(%) Todays stock
price Todays returns
(%)
1. Bharti Tele 47.7 562 1078 345 623
2. Tisco 155 931 501 341 120
3. Jindal Stainless 92 242 163 72 -22
4. Moser Baer 138.2 341 147 14.4 -90
5. IPCA Labs 55 350 536 274 398
6. Federal Bank 74 499 574 337 355
7. SAIL 14.5 292 1914 82 466
8. Kochi Refineries 69 241 249 163* 136
9. Aftek Infosys 58 148 155 10 -83
10. Balaji Tele 48 388 708 32 -33
11. Arvind Mills 38 141 271 65 71
12. HCL Infosys 94 291 210 39 -59
13. Jisco 304 427.4# 41 - -
14. Canara Bank 63 839 1232 366 481
15. JSW Steel 126 3164 2411 387 207
16. Union Bank 31 427 1277 173 458
17. Allahabad Bank 47.6 271 469 117 146
18. Aventis Pharma 285 2424 751 2302 708

Annualized Returns 88 27

* - Company was taken over by BPCL in 2006.

 

[Nifty Trader]

Observations from the above table:

o Now the peak returns look fantastic but you only know what the peak is after it has been formed i.e. no one can exit at the peak.
o If you look at todays annualized returns they are good but less than 1/3rd of the peak returns!
o Annualized returns over the last 8 years (buy & hold strategy) are also not very attractive considering we caught the entire bull market from the beginning. It could also be argued that we also caught the bear market from 2008 onwards but then thats the inherent risk in a simple buy & hold strategy. i.e. you can only make money if the market goes up.
o My own exit was much before the peak & I made an average of 110% returns in a years time which to me seemed impressive at the time but in hindsight was a lost opportunity.

All of the above indicate that knowing when to buy is one thing but more important is to also know when to sell. That would have allowed the above portfolio to generate even better returns by:

1. Allowing the investor to not cut his positions too soon (like I did) so that he could ride most of the trend.
2. Exiting the portfolio when a bear market emerged thereby avoiding the subsequent losses. A rupee saved is a rupee earned & this alone can save a lot of time & enable you to reach your financial goals faster.

Now you might think why did I not re-enter the stock markets even after exiting & seeing the markets go up further? Here are a few reasons I did not:

1. The market has run up far too much. The Sensex was already at an all-time high & I thought how much further can this go? I didnt want to enter & see it tanking.
2. Against the normal investor mentality of buy low & sell high. Buying at Sensex level of 8000 would have meant I was buying high. But low & high are all relative terms. The price is never too high in a bull market & never too low in a bear market.
3. Absence of a trading system / method which could indicate clearly when to enter & when to exit.
4. Incorrect understanding of how the market functions. It takes time to learn any subject & become good at it esp. the financial markets.

I realized that with all these deficiencies I needed to evolve to be able to trade the markets with success and so started another long journey to tame the beast. Heres what I diligently did for a good 3-4 years:

1. Subscribed to The Economic Times & started reading it daily.
2. Watched a lot of CNBC & other business channels as much as I could.
3. Subscribed to a lot of paid services by so-called experts & traded those calls diligently.
4. Read books on technical analysis & did a lot of research on the subject.
5. Subscribed to technical analysis softwares in the hope of finding the holy grail.

Inspite of doing the above, I was still not successful in finding a trading system that worked consistently. What I had gained though, was invaluable trading experience which helped me to really understand the markets. I also realized that a lot of the experts on tv are just as clueless as we are. They would say something one day & the exact opposite would happen. In my eagerness to find a good system I had mistakenly assumed that these analysts on tv would surely know how to trade (thats why they are on tv, right?) & hence, I subscribed to their services. I must have subscribed to at least 20 such services. My experience with them was nothing short of deeply disappointing. Not only was I losing money by paying for their subscription fees, I was also losing money trading their calls! I also found a lot of them to be quite unscrupulous to be honest.

Here are some of my experiences with these service / tips providers:

1. The calls were such that they would succeed maybe 30-50% of the time & the risk-reward ratio would be equal. Add brokerage, slippage etc. & you end up making losses overall.
2. A lot of the times you couldnt even get an entry into the trade as the price was already near the target by the time the trading sms came in. But of course, the analyst was quick to show this trade in his trading performance next month. A trade which none of his subscribers could have entered!
3. The past performance would be manipulated. For example, a call would come in to Buy Reliance at Rs. 2000, Stop Loss - 1980. Target 1 2020, Target 2 2040, Target 3 2060. Now if Reliance moved to 2020, you would get an sms to book partial profits at 2020. Then if it moved to 2040, you would get another sms to book more profits at 2040 & then finally if it hits 2060 to book full profits at 2060. Now logically, we booked at Rs. 2040 (average of 2020 & 2060) but the con artists would show profit booked at Rs. 2060. In the same scenario if Reliance had touched 2020 & then hit the stop loss, they would show profit booked at 2020. So either way, they were covered.
4. I realized that a lot of them made their money not from trading but from selling their subscription services. Even 20 people taking their service after watching them on tv translates into a cool Rs. 1,60,000 every month (at an average of Rs. 8000).
5. On a telephone inquiry they would claim the moon but would never ever give a single reference of a satisfied client. In hindsight there probably werent any.

I am sure a lot of you would have also gone through this experience & probably can relate to it somewhat.

 

[Nifty Trader]

After this point & leading upto the 2008 crash I bought & sold stocks on the recommendations of some business friends, made some money, lost some money & then eventually stopped trading till I found a suitable system. I started off with paper trading & below is a summary of all the trades taken (incl. the paper trades). I shall continue posting new trades as they happen with necessary updates. Again, these are not trading recommendations but purely for information & discussion purposes. It is also to encourage traders not to lose hope & that it is possible to make money in the markets if one is disciplined & follows a good method. Here goes……

The format for understanding this is:

Sr. No. – Scrip Name – Long (L) / Short (S) – Entry Date – Entry Price – Initial SL – Exit Price – Exit Date - % Gain / Loss. Loss is indicated in brackets (…)

1) Rel Infra - S – 13th June - 547 – 566 – 567 – 15th June = (3.66)%
2) Orbit Corp – S – 15th June – 42.9 – 45 – 40.8 – 30th June = +4.90%
3) Claurs – L - 10th June - 145 – 136 – 135.5 – 22nd June = (6.55)%
4) Omkar Sp Chemicals – L – 9th June - 59.25 – 54.4 – 54.1 – 20th June = (8.69)%
5) PFL Infotech – L – 14th June - 237 – 217 – 4th July – 301 = +27%
6) KS Oils – S – 20th June – 24.1 – 25.4 – 18.7 – 20th June = +22.41%
7) V Guard Ind – L – 30th June – 225.75 – 208.5 – 219.8 – 6th July = (2.64)%
8) Rel Infra – S – 27th June – 535.5 – 580.15 – 546.8 – 30th June = (2.11)%
9) Escorts – S – 11th July – 111.9 – 115.85 – 109.5 – 19th July = +2.14%
10) KS Oils – S – 8th July – 21.65 – 23.2 – 10.8 – 23rd Aug = 50.12%
11) GVKPIL – S – 12th July – 19.1 – 20.4 – 19.9 – 19th July = (4.19)%
12) Gangotri Iron – L – 12th July – 59.85 – 54.85 – 60.1 – 27th July = +0.42%
13) Ajanta Pharma – L – 18th July – 332 – 314 – 313 – 3rd Aug = (5.72)%
14) GMR – S – 21st July – 31.05 – 32.4 – 31.4 – 29th July = (1.13)%
15) LITL – S – 21st July – 22.45 – 23.55 – 23.1 – 22nd July = (2.90)%
16) Oswal Chem – L – 27th July – 90.8 – 89.95 – 89.85 – 3rd Aug = (1.04)%
17) Aban – S – 27th July – 514.25 – 533 – 391.5 – 22nd Aug = +23.87%
18) IVRCL – S – 27th July – 66.25 – 69.2 – 38.9 – 6th Sept = +41.28%
19) Rama Paper – L – 10th Oct – 108.6 – 103 – 102.5 – 10th Oct = (5.62)%
20) Bajaj Hindustan – S – 12th Oct – 36.6 – 37.85 – 37.75 – 31st Oct = (3.14)%
21) Supreme Ind – L – 19th Oct – 189.4 – 180.3 – 186.5 – 14th Nov = (1.53)%
22) JP Asso – S – 18th Oct – 71.2 – 76 – 73.8 – 26th Oct = (3.65)%
23) Bajaj Hindustan – S – 17th Oct – 36.6 – 37.85 – 38 – 13th Oct = (3.83)%
24) DLF – S – 20th Oct – 224.3 – 239.9 – 240.9 – 28th Oct = (7.40)%
25) Nikki Global – L – 24th Oct – 340.5 – 337 – 337.75 – 2nd Nov = (0.81)%
26) Lovable Lingerie – L – 28th Oct – 483.5 – 462.75 – 474 – 14th Nov = (1.96)%
27) Charter Logistics – L – 4th Nov – 56.9 – 54.1 – 54.7 – 14th Nov = (3.87)%
28) Bajaj Hindustan – S – 4th Nov – 34.8 – 37.8 – 28.05 – 24th Nov = +19.40%
29) EKC – S – 9th Nov – 59.1 – 64.7 – 44.25 – 22nd Nov = +25.13%
30) Voltas – S – 11th Nov – 98.1 – 102.4 – 94.05 – 29th Nov = +4.13%
31) Punjab Comm – L – 28th Nov – 132.1 – 129.5 – 133.1 – 8th Dec - (0.76)% - Exited this Long to enter other Shorts. If I had held on, Punjab Comm would have been exited at 154 on 5th Jan. Possibly the only long where SL would not have been hit during the bearish phase of December.
32) Bajaj Hind – S – 29th Nov – 28.05 – 30.5 – 26.35 – 22nd Dec = +6.06%
33) BGR Energy – S – 8th Dec – 256 – 276.7 – 194 – 23rd Dec = +24.22%
34) Rel Infra – S – 8th Dec – 401 – 426.8 – 393 – 9th Dec = +2.00% - Exited Rel Infra to enter what I considered to be a better shorting opportunity in Educomp. If I had held on, Rel Infra would have been exited at 372 on 23rd Dec. As it turned out, Educomp did go down to 173 in the next few days but bounced back to hit the Trailing SL as shown below. That’s how the market responds to our “sureshot” trades
35) Educomp – S – 9th Dec – 208 – 229 – 205 – 27th Dec = +1.44%
36) SCI – S – 8th Dec – 60 – 63.5 – 55.85 – 16th Dec = +6.92%
37) Kingfisher Airlines – 16th Dec – 23 – 24.95 – 19.65 – 7th Jan ’12 = +14.57%
38) Ktk Bank – S – 27th Dec – 68.15 – 71.7 – 5th Jan = (5.21)%
39) SCI – S – 28th Dec – 49.7 – 52.75 – 4th Jan – 52.9 = (6.44)%
40) 3i Infotech – S – 30th Dec – 11.8 – 12.9 – 12.6 – 3rd Jan - (6.78)%
41) Welcorp – S – 2nd Jan – 82.2 – 86.05 – 2nd Jan = (4.68)%

Open positions – None as of now.

All prices are after accounting for brokerage & slippage for accurate representation. Although it is not recommended (as it makes everything look very simple) here’s a small analysis of the above figures. The absolute return for the 7 month period above (13th June 2011 – 15th Jan 2012) works out to 45.4%. This is the sum total of all the percentage returns you see above (181.8) divided by 4 since my capital was divided into 4 equal parts. The annualized return would be 77.8%.

Please note that the above is a reflection of my choice of stocks & judgement. I am also neither a technical analyst nor an “expert” although my trading knowledge is probably more than the average individual’s.

 

[Nifty Trader]

Looking to short some stocks but entry is not confirmed yet. Some shorting candidates:
1) GVKPIL
2) Welcorp
3) Rolta
4) Sintex
5) VIP Industries

Longs:
1) Punjab Comm

Shall update as & when a trade is initiated.

Disclaimer: This is only for information purposes. Pl do not trade by going long/short.

 

[Nifty Trader]

Adding EKC to the list of probable shorts.

 

[Nifty Trader]

Shorted 3i Infotech @ 15.65 on 25th Jan, SL 17. CMP - 16.15.

 

[Nifty Trader]

With rollover to Feb, position reads: Shorted @ 15.85, SL 17.2. CMP - 16.7.

 

[Nifty Trader]

Open Position - 3i Infotech Short. GVKPIL & LITL on the radar for additional shorts.

 

[Nifty Trader]

GVKPIL shorted yesterday @ 15.1, SL 16.35.

3i Infotech (short) SL revised to 17.1.