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Since a lot of time Nifty is doing nothing. All my customers of the conservative option course trading the strategy 1 – the non directional trade would have made good profits.
But there are indicators that now any day Nifty may move. Which direction we do not know – but there can be a move. I know there are lot of you who DO NOT trade with the hedge – I recommend for next 30 days be 100% hedged. Those who hedge always need not worry.
If GST bill is passed – Nifty is headed up.
But I think 7600-7700 is a good support for Nifty. (That does not mean you buy a Future – I do not give suggestions so that you trade without research based on what I say in this blog. Please do your own research before taking an investing decision.) You can buyÂ Nifty BeESÂ though, hold them till you make 5-6% profits. Well you can also switch some of your debt mutual funds holdings into equity. But only some of it. Read this article for more information.
Which Stock To Trade?
ITC Ltd. is looking very attractive at 313. Start accumulating the stock. Some now at around 300, then at 270, then at 243 (probably it will not go there). It is going down because GST will severely effect taxes paid by ITC. But we all know if that takes place, ITC will increase the price of their products especially cigarettes. And humans will keep inhaling cigarettes – it does not matter what the price is – habits don’t die easy. 🙂 And ITC will once again bounce back.
If you have cash trade the conservative stock strategy on ITC.
What Will Happen to India VIX:
It closed today at 15.87. Still good for strategy 1. But if you have cash read below:
If FED does a rate hike we may see some correction on worries over FIIs taking their money out from the stock markets. But if you know strategy 1 who cares? The Fed, holds its next policy meeting onÂ Dec 15-16. So I assume VIX will again increase and will be at a good high onÂ Dec 14thÂ (Next Monday). If you have free cash trade strategy 1Â on MondayÂ orÂ Tuesday.
You can even trade this Friday, 11th December, 2015. Since we have 2 days off weekend if there is not much increase in VIX then you can get the benefit Theta depreciation during holidays. Remember that Theta also depreciates during days stock markets are closed. 2 days benefit is good if VIX does not swell. If nothing it pays off your brokerages.
What may happen short term to Nifty?
There is a strong signal that FED will hike rate by 0.25%. But if nothing major happens to Nifty and GST bill is passed, Nifty is then headed for 8300-8500. The only issue is the FED reaction – but there are a lot of signs that markets will not panic like they did a couple of years back.
Since the signals of rate hike is very strong I think Nifty will factor it end this week itself.
Remember VIX cannot factor anything before the news except going up, so it will only increase. And even if it does not – it will fall after the news.
Good opportunity – make money. 🙂
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