Money Multiplier!!!

Well so markets indeed went up, I am glad they did. As written in my previous post, I had added more positions in GE Shipping, and well it paid off very well. GE Shipping closed with 5% up, and well thankfully now both my trades are in positive. . .Now what will I do from here, well ride the wave till it lasts (depending on the technical signals) but yes I would be cautious for how long to carry these positions. . .

However once the positions are closed and profits booked, where should that money be deployed. Well there are two thoughts to it. One add more positions or second invest that additional money to take unduly high risks (well so that the profits are unduly high. . .) I am not sure which strategy would I adopt, but I am inclined for the latter. . .This type of strategy usually comes in as a money multiplier strategy, as one is employing the money that has been made as profits well to earn super high profits . . .Well some of you might be wondering what these highly risky strategies are, for a starter buying naked options is one. . .naked options are when one buys calls or puts without covering the positions in actual stocks or futures. . .

Now where from here. . .my sense as written earlier Nifty seems to be comfortable at the moment. . .no heavy signs, no overbought situation etc. . .so one can breathe easy till the time new developments take shape. . .And as far my 2 stocks goes they have kind of entered an uptrend so the moves would be sharp on the upside (provided the broader markets hold)

Cummins Positive, GE Shipping Averaged

Well one of my two investments goes into positive. . .Cummins crosses 261, whereas GE Shipping goes into a downtrend. . .So added more positions for GE Shipping today. . .lets see whats instore for tomorrow. . .however one important thing to note is that even while trading, I only trade in stocks that are fundamentally sound and although my calls are based on technical analysis, I spend much more time picking up stocks based on fundamental analysis. Hence I had decided to pick up these 2 stocks, since fundamentally these 2 stocks appeared undervalued and when the correct timing presented itself, I went ahead and picked them. . .

For Nifty, I think this is just a small correction. . .if we can get over it without too much price damage then I think we are in for some surprise on the positive side. . .its been long overdue since the markets reached the dizzy euphoric levels. . .just rem when was the last time that the newspaper headlines quoted "markets make a new high. . ". Earlier I recall every 1000 points were cheered by the dailies. . .I guess its time we get back some of that euphoria. . .

Markets posting strong upmoves

Well, in my last post I had written that markets going down is a happy scenario as it would present very good opportunity to buy, also I had written that the upmoves would be very sharp. . .well both the things happened, what did not happen was that the downtrend could never take off to present the investors with a buying opportunity. Hence this upmove was practically impossible to catch (according to me...). Now NIFTY is presenting a very interesting scenario, wherein the downtrend seems to have ended, and the upmove is about to begin. Now I think its very difficult to short, instead maybe its time to go long. . .but with a caveat, again being fearful of the sharp downmove. . .Hence this seems to be a little confusing time wherein no clear signal for a downmove is there and upmove looks more likely, however one would have to have some strict stoplosses. Well as a disclaimer, I have bought a couple of stocks GE Shipping and Cummins. Both these stocks I have bought from a fundamental perspective, since I think these stocks are quoting at very reasonable valuations and if the market holds then there is some good upmoves that can be expected. . .

Markets going down, a Happy Scenario !!!!

Markets are going down on expected lines, well because of what? Well because of an old age maxim of wall street, buy on rumours sell on news!!! So the budget promised much but delivered little (for the markets) hence the correct time was to buy on the expectations and sell before the budget. . . Now all that is in hindsight, but I hope some of you might have read my previous article why-buy-and-hold-does-not-make-sense and booked some profits. . .at least I did (and am gloating over it). I also know that the markets will again give good opportunity to buy. . . actually there are so many strategies for the markets that its just not simple buying and selling of shares that one needs to do. . .one can play with any of the so many financial instruments available. . .so if ones money is lying idle you can buy debt MF to get daily income. . .If you believe that markets are going to go up, one can buy ETF (exchange Traded Fund), also there are sectoral funds to play with, then more so there are commodity traded funds, gold funds etc etc. . .If nothing else then one should keep their monies at least in sweep accounts. . .

Now coming to where from here. . .well markets have gone into short term downtrend, if this trend continues then we might slip into deeper downtrend. . .although a word of caution, the turn around in the markets will be equally sharp . . .so one will have to very nimble footed to catch the upswing. . .

A picture of MACD of Nifty pointing out how we have slipped below 0 (A line below 0 indicates negative trend or the markets). . .The point is that the markets will give us a great chance again to play the upswing and downswing, its just a matter of timing and not getting caught on the wrong foot!!!