Nifty Futures Trading strategy | Hold Shorts and Refrain from Option Writing


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Nifty Futures traded in an absolutely narrow range throughout the trading session before finally ending the day forming a harami pattern (inside day). In today’s post, we provide a sneak peak into our proprietary trading system. As per the system, the proprietary momentum and lead indicators are both pointing towards a possible short term reversal. Though they have not signaled any reversal of  trend, there could be a small pause in the downtrend before it resumes again.

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NIfty Futures could consolidate before resuming the down trend

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Nifty futures trading strategy is to stay with the down trend; however compulsory traders can trade as suggested below

Aggressive traders may initiate longs above Monday’s highs of 5937 with a stop of the low 5905. In case the market sells off  below 5905 then reverse and go short.  Given our longer term bearish forecast we continue to remain bearish and refrain from taking long positions.

Nifty Options – Implied volatility as per historical precedent should spike

Seasonality studies suggest that during the past three years, just about 3 weeks prior to the budget, the implied volatility, as measured by India VIX has always been in the mid twenties and stayed in just about the same range till the budget was presented. This year is marked by a stark contrast where the India VIX is oscillating in the 13-15 range, however it is showing signs of increasing. In anticipation of a spike given the historical precedent and the current low implied volatility, we recommend option buying strategies and would advice against any option writing.

India-VIX-spike anticipated-feb-11-2013

Seasonality suggests a spike in the implied volatility

As per the trading strategy recommended for the Nifty futures, above 5937 naked 5900 calls may be purchased in case markets rally. However if the markets resume the down trend  5900 puts may be purchased below 5905 levels.

Nifty Options Fact Sheet  (infographic)

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Refrain from writing options given that the budget event can cause volatility to spike

For daily updates on our trading view on Nifty Futures & Options  please send us an email at bolinjkar.vinit@gmail.com or  SMS / WhatsApp on 9730836363. We would be more than happy to oblige our community of investors / traders.

Disclaimer: The opinions expressed here in are strictly for education pupose only. Before investing please make your own thorough analysis or speak to a qualified Certified Financial Planner / Advisor. We are not in any which way responsible for trading losses arising out of  trading decisions taken based on the above. Also read the disclaimer below.

This blog is the personal blog of Vinit Bolinjkar. The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither http://winningtrades1.com or myself accepts any liability arising out of the above information/articles.

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Low risk high return stock idea | Zenith Fibres Ltd


Yet another low risk high return investment idea from our beloved Kukkuji is Zenith Fibres Ltd.  Zenith Fibres is not only doing well, but its ultra-low cost expansion along with its compelling valuations and 12 year dividend track paying record make it a compelling buy.

In this video interview Kukkuji explains his rationale for being bullish on the stock. For the benefit of our viewers the rationale is enumerated below the video.



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What makes Zenith Fibres Ltd a screaming BUY?

  • Zenith Fibres Ltd (ZFL) has undertaken a very opportunistic expansion in its propylene business by buying out a manufacturing plant from the crisis ridden Europe at a throw away price of Rs 2 crore. On this paltry investment of Rs 2 crore ZFL is expected to achieve a turnover of Rs 50 crore on an annual basis. The capacity is expected to kick start anytime soon.
  • Even without the expansion ZFL had achieved a ~100% yoy growth in net profit for the Q1FY13. The EPS for Q1FY13 works out to Rs 3 and with the added capacity it expects to achieve an EPS of 13-14 per share for the full year FY13. At the CMP of 36 this works out to a  PE of a little less than 3 – clearly indicating that the stock is going extremely cheap.
  • The Book value of the stock is around Rs 46 and hence the stock is available at a significant discount to book signifying low downside risk.
  • ZFL has a dividend paying track record of more than 12 years. Last year ie in FY12 the dividend was upped from 15% to 20%. Considering the rosy prospects and cash balance of RS 14-15 crores and the stock having a market cap of merely Rs 18 crores, there is every chance of the ZFL management increasing dividend payout in the future.
  • Further the stock has a very high ROCE >25% coupled with a very high replacement cost.

This heady concoction of strong fundamentals, attractive performance parameters, compelling valuations and strong dividend policy  clearly makes this stock an undervalued low risk high gain investment pick.

More information on Zenith Fibre can be obtained from its website.

Disclosure: Kukkuji  holds all the stocks mentioned in the video interview.

A brief video introduction of Kukkuji.

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Kukkuji has done several video interviews with Winning Trades | Low risk trading strategies for the Indian markets in the recent past.

  1. Four Principles of Stock Selection: Video interview of Kukkuji
  2. Video interview: Kukkuji of ISG offers 3 low risk high return investment ideas

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Disclaimer: The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither http://winningtrades1.com or myself accepts any liability arising out of the above information/articles.

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Vinit Bolinjkar Head of Research, Ventura Securities Ltd
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MT Educare AGM key takeaways -Downside risk capped high gains on the cards


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Today evening i happened to attend the company MT Educare’s AGM. Initial feelers are that the company is on a very strong wicket and if managed right it can really launch itself into a totally new orbit over the next three years. Education and in particular primary education is an industry which has always been around. Only now its getting more organized.

At Rs 105 the stock is decently valued given a projected EPS of 5 for FY13 and 8 for FY14. Typically education stocks quote around 25x and hence a target of Rs 200 over the next 15-18 months is not too difficult. So although I am extremely bearish overall in the market education being a recession proof business is a good defensive play apart from being one of the growth drivers over the next 10-15 years.

Most encouraging takeaway from the AGM was that the management is guiding for a 50% pay out ratio. 50% pay out ratio is an awesome proposition and MT Educare is definitely on my radar.

Click on this link to listen to the audio MT Educare low risk high yielding investment idea

Disclaimer: The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither http://winningtrades1.com or myself accepts any liability arising out of the above information/articles.

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Vinit Bolinjkar Head of Research, Ventura Securities Ltd
Tel: | Mobile: 0 9730836363

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Silver price in preparation for a big rise


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Silver may be setting up for a sharp price rise and  though I did not report the recent spike, it is never unexpected. Though silver clearly is a low risk high yielding investment opportunity, before jumping to give a BUY call I would like to see silver close above the $29 level. This breakout has a target  of $31, which is the next immediate resistance level. Once $31 is cleared then all over head resistance would have been taken out and would put Silver  firmly in a bull grip.

The following two charts for the long term and short term clearly enumerate our above stand.

Long term silver is a low risk high yield opportunity with a confirmed uptrend above $31 with a stop loss of $26

Silver price all set for a big rise

Short term silver above $29 is all set to rally to $31

Short term silver is a low risk buying opportunity with a rally target of $31

COMEX inventory reduction favorable for bull case justifying low risk entry

Having examined the charts we now look for supporting evidence to examine the probable causes why silver would rally. Already the physical inventories at the exchanges are declining. Silver inventories during the sharp take down in the price of silver to $26 levels had seen inventories peak. Typically silver prices follow an inverse correlation to these inventories and hence declining inventories is a good sign for an up move.

Geopolitical risks affecting the already acute supply clearly spelling high gains on investments ahead albeit with low risk

Also on the supply side a lot of geo-political events are taking place which could be a set up for the the long term bull market. We already know that silver supplies mainly come from the the Latin American countries-mainly Peru and Mexico. Both these countries have been subject to violence amongst the miners and this could adversely affect supply lines in an already tight silver market.

Further resurgence of nationalization in these countries is also having an untold impact on the investment mood among global silver producers and they are now hesitant to invest in these countries given this uncertainty. Already Pan American Silver has suspended its investments in its flagship project Navidad due to these very fears. Bolivia another major silver mining country is also considering nationalization of one of the reportedly largest undeveloped silver deposits. Cumulatively these countries of Peru, Mexico, Argentina and Bolivia contribute almost 43% of the tiny silver market and can wreak havoc with supply lines.

This combined with the rising global political uncertainty, potential conflagration of the Iran war and the global debt situation creates for a potential gigantic spike in the price of silver. Further with the possibility of gold being included as a Tier 1 asset it is possible that the former glory of silver would also be restored in sentiment to the increased importance to gold.

Considering all the above it is very evident that there exists  extremely low risk and high gain potential for investment in silver and  one may consider buying physical silver with a technical break out above $ 31 and keeping a far stop of $26.

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Disclaimer: The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither http://winningtrades1.com or myself accepts any liability arising out of the above information/articles.

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Nod from US FDA sets up Claris Life Sciences as a low risk high return stock pick


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Claris Life Sciences is a new low risk high returns investment idea on our radar after getting an NOC from the US FDA.  Based on this news the stock was up ~20% today.

It is estimated from unconfirmed sources that the stock has high potential  to achieve an EPS of Rs 30-35 / share during FY13/FY14. This is a sizeable jump from the current Rs 20/share. Based on these expectations the stock is available at a PE of 8x 1 yr forward making it an extremely cheap stocks. Given its business of injectables it can easily get a PE of 12 as new products are launched and market starts recognising its true potential making it a multi bagger idea. However this is only a preliminary analysis based on here say and you are advised to do your own homework before investing in the stock.

Claris Lifesciences is one of the largest sterile injectables pharmaceutical companies in India with five manufacturing facilities spread over a 78-acre campus located in Ahmedabad,India. Claris primarily manufacture and market products across multiple markets, and therapeutic segments. A significant majority of these products are generic drugs that are capable of being directly injected into the human body and are predominantly used in the treatment of critical illnesses.

Its products range across various therapeutic segments, including anaesthesia, critical care, anti-infectives, renal care, infusion therapy, enteral & parenteral nutrition and oncology. We offer injectables in various delivery systems, such as glass and plastic bottles, vials, ampoules, pre-filled syringes and non-PVC/PVC bags.

Keep watching this space http://winningtrades1.com/ for new updates on the new find Claris Life Sciences which is a low risk high yielding investment or you may subscribe to the blog by clicking on the RSS links at top of the page or subscribing for email updates.

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Disclaimer: The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither http://winningtrades1.com or myself accepts any liability arising out of the above information/articles.

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