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6800 Bottom For Nifty And Other Ideas To Trade

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Nifty after falling relentlessly since last few months can see bottom at 6800. Read this post to also get other ideas to trade.

I have a strong feeling that Nifty has found its bottom and will not break 6800 at least in the medium term.

I have already written earlier a post on how you can trade this month. Apart from that there are many other ways to trade.

Remember the arbitrage opportunity on the stocks and Futures article? If you have not read that post I highly recommend read that now.

The premiums in Futures must have swelled and its time to make a guaranteed return of 1-2% in a month.

But it doesn’t end here. People who have done my course – its a great time to trade the conservative stock options strategy. If you think the markets may slide further then try BOTH the arbitrage in stocks and the non-directional trade (strategy 1) together. You may have to ask collateral margin against the stock bought though. That’s ok, as you make 1-2% from the arbitrage opportunity and another 3-4% from the strategy 1. That’s excellent return in 30-40 days.

Nifty BeES

Yes collect Nifty BeES if you are bad at selecting stocks. Approx 7100 is Nifty currently. What is 10% plus of 7100 = 7100+710 = 7810. I really don’t think Nifty will take more than 6 months to reach there. 10% return in 6 months is amazing. Any extra money that you don’t need for the next 1 year can be invested in Nifty Bees Exchange-Traded Fund (ETF).

Why 1 Year why not 6 months? Because when you invest money, you should always think of the worst case scenario. It may reach 7800 in 6 months, but you must be prepared mentally to stay invested for about a year.

Mutual Funds

Yes you can shift a percentage of funds from debt/liquid funds to Index fund. ICICI Prudential Nifty Index Fund is one such good fund to invest now. It has 0.71% Expense rate with ZERO exit load, which is great. But if Expense is bothering you Nifty BeES are cheaper (Expense: 0.54%). Frankly 0.71-0.54 = 0.17% don’t bother me. I am more comfortable trading Mutual Funds and Nifty Options, and I rarely trade in any other product. Yes I am a long term investor too.

I believe too much of diversification in trading is useless and is counter productive. Master a couple of trading strategies and make money form them. That is it.

Some people trade options and cash in morning and then commodities, oil, gold, etc in evening and then USD/INR (Forex trading) the whole day. I don’t think these people make money trading. Yes I do get calls from people who trade till 11 in the night. Don’t do this. It will not only take your health away, but also money away and peace away, family away, everything away.

I am not against working, I myself work till late in night sometimes. I am against chasing money. Don’t become slave of money. Don’t always keep thinking about money, if you work smart it will come. But if you work only to make more and more money without any reason, it will never come to you. Actually it will go away.

Ultimately you want to earn money to be happy, but what’s the point if you are unhappy earning it?

Buy Stocks For Medium to Long Term

Now when it looks like Nifty has found its bottom, its a great time to buy some value stocks as well. Banking stocks are now looking strong and are set for a reversal. Agreed banking stocks are volatile, but over the long run the banking stocks have produced stellar returns. If a stock is not volatile, you will never get an opportunity to invest. Do not invest all your money in a single stock or on a single day. Divide your money in 4-5 equal installments and invest in 4 great stocks of your choice in next 3-4 months.

You see you must act according to opportunity offered by the markets, and you are sure to win most of the times.

India VIX

Its around 21.93. Understand that this will not fall much, in fact will only go up until the budget. Then you will see it crashing from the budget day only which is on 29-Feb-2016. By mid March it will be back to 15-17 area.

Reduce the number of lots traded

Please do not get aggressive this month. Budget month is the WORST month to trade. So please reduce the number of lots traded. Its ok to make 1-2% this month, but its NOT ok to lose 5% trading aggressively.

Its matter of few days, I hope this much patience you have.

All of the above as you can see is smart trading. Invest, show some patience and make money.

You really don’t need to slog in stock markets to make money. You need to work smart.

I have told this 100 times I and will repeat it again – just 20% return on your portfolio year after year can make you very rich. (20% is just 1.66% a month) And top of that the process of making that money with ease will keep you stress free, happier and healthier.

Don’t believe me? Just 1 Lakh invested every year for 20 years at 20% return a year can make over 2.6 crores. (At 30% it is over 10 crores) But you have to make 20% from your ENTIRE portfolio of 1 lakh invested every year. This is only possible through trading options conservatively. Yes investing in some stocks can make you extremely rich in a few years, but the only problem is you don’t know which stocks – so where you invest? You can always trade with a small percentage of your money aggressively to try to make more – but NOT all the money at any cost even if you are the best trader in the world.

I hope I am making sense. If you really want to learn conservative trading then I highly recommend my course. If you think 3% a month is just too less, I wish you good luck.

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About the author: I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

{ 2 comments… add one }
  • m s rao February 20, 2016, 1:30 pm

    Dilip ji


    ‘ Some people trade options and cash in morning and then commodities, oil, gold, etc in evening and then USD/INR (Forex trading) the whole day. I don't think these people make money trading. Yes I do get calls from people who trade till 11 in the night. Don't do this. It will not only take your health away, but also money away and peace away, family away, everything away. ‘

    How comprehensively U summed up about chain traders. These traders r like chain smokers who spoil their & others health, but most of these chain traders destroy their & others wealth.

    Hat’s off once again Dilip ji.

    I wonder why there r no comments on this post so far. May b all r busy chain trading.

    M S Rao

    • Dilip Shaw March 4, 2016, 6:41 pm

      >> I wonder why there r no comments on this post so far. May b all r busy chain trading.
      Ha ha 🙂

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