The Put/Call ration has increased from .87 (on 16 Feb) to 1.07 today (17 Feb), which indicates bearish position build-up despite net buying by FIIs and DIIs. Hold on to at least some Puts.

FII trading activity on NSE and BSE on Capital Market Segment

The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 02-Feb-2010.

Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment

The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance, MFs and New Pension System on 02-Feb-2010.

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FII trading activity on NSE and BSE on Capital Market Segment
The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 27-Jan-2010.

Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment

The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance, MFs and New Pension System on 27-Jan-2010.

Last Modified on 27 Jan 2010: After 5 consecutive days of market fall, we are now holding on to the support offered by 4850 on the Nifty, which is a crucial support level. It had also played a role during the Dubai crisis day on Nov 23. But the current correction is clearly bigger as the  FIIs have been net sellers every day for the last 5-6 days.

The market will hold and move up by end-Feb towards 5100, before the budget in end-Feb.

Older text: NIFTY 5400 is Our Target For Feb 2010; at that point, you should convert at least 50% of your portfolio into cash. Even currently at 5225, you should have 15-20% portfolio in cash so that any dips can be bought. Large cap stocks that can deliver good return from now to end-Feb 2010 are:  NTPC, Tata Motors, Reliance Media Works (Adlabs), Hindalco, Tata Steel, Satyam

Mid cap stocks that can deliver good return from now to end-Feb 2010 are: Peninsula Land, Lakshmi Energy & Foods, Orbit Corp, Panacea Biotech, KSK Energy, IOB (Indian Overseas Bank), Varun Shipping

Small cap stocks that can deliver good return from now to end-Feb 2010 are: Munjal Showa, Surya Phrama, Vipul

2. Love your money not the stocks you own. It is important to sell stocks to realize your profit. There is nothing called “notional gain” . It has no significance.

3. Remember one simple thing  - Higher the P/E of a stock, lesser the chance for you to make further money in it. Exceptions are there - but why to work with exceptions. There are thousands of other stocks available at lesser P/E and which might be profitable- why not keep them.

4. Equity as an asset class is historically proven to be the best asset class in terms of returns. So be  an investor, even if you are a small investor. You can have a small portfolio.

5. Believe in gravity - Anything which goes up will come down and vice versa. A Stock which has risen too fast too soon will come back.

6. Avoid bringing fresh cash to save your ailing stock. Averaging might not be the best option all time. Discipline wise its nice to have a pre-determined level of money you will bring on the table for investment in the Stock Market. Stick to it - unless there are exceptional situations.

7. Risk and Reward are directly proportional - higher the risk , greater will be the reward. It is easy to get lured by riskier asset class (derivative), resists the temptation unless you are sure of what you are doing.

8. Know your entry and exit points - When you are buying a stock, have a decision right away as to at what percentage upside you will sell it. And a 5% number here is not less. It is important to make money rather than expecting it to rise 50% and in process be sitting on losses.

9. Safety First - For whatever you do. Keep your Plan-B ready. What if, if the counter does not move the way you expected.  What you will do if you suddenly need liquidity to support your other expenses. How much of your networth is exposed in the market. Do you know the exit routes (read hedging routes) in case your trade direction is going wrong (remember, Abhimanyu - he did not knew exit path from the war field).

10. It is fine if you missed run up of the market from x to 2x. What did you lose actually - nothing. It is important to be safeguarded against potential fall - once you are invested. Because here you will lose.

11. Have small - small milestone. Like you brought 10k today. You want to see it 11k by end of week. Do not look beyond, I will make it 20K by end of this week. It is not going to happen.

12. Listen to everyone but do what you want - it is your money after all. Before buying - ask why you are buying, what highs you expect, when you will sell, what if, if it falls 5% just after you buy, if the P/E > 20,  is the P/E greater than its peers (does it deserves to be there), is there a corporate action coming up for the stock, who all are the promoters, what has been the track record of the promoters, look at the chart of last 2 years on www.nseindia.com (see how the stock moved over the years), is the stock close to its 52 Week H/L etc.

13. So called experts speaking on various portals and media have vested interest interests in particular stocks. There comments may be biased. There are just too many of the experts who hold no - accountability if their calls goes wrong. Additionally, for the same stock at any given time you will always have a +/- opinions from two different stocks which will confuse you further. Use their talks, interviews and data to help your own research rather than follow them blindly.

14. Just because your friend made 10k yesterday did not mean that you will make 10k today. Just because a Stock X rose 10% yeterday does not mean it will repeat it today.  Just because your friend told you to buy this - you are not going to buy it. Just because your friend looks smart in dealing with his portfolio - it doesn’t mean you are as smart or as bigger a fool. Bottom line in all this - how on heavens are you ever going to know if your friend is telling gospel truth in the first place.

15. Begin with a small sum of money (say 5% of your networth) and see how much and how fast you are able to grow it. Worse case scenario is your 5% shrink 50% to 2.5%.  Market is not going at Sensex zero anytime in history. Its not the end of the road. You would have taken huge learning out of this loss. Turn your 5% as many times as you can. Buy- Sell - Buy - Sell (keep churning). If something is not going up - sell and move over to another.

16.  Just to make sure we are just not talking concepts but bit of researched number as well - will put forward a guidance from Benjam Graham (writer of the Intelligent Investor). His  suggestion is that you multiply the P/E ratio by the P/B (price-to-book) ratio and see whether the resulting number is below 22.5. If it is then it is generally a safe investment more often than not.

17. Good luck and Happy Investing.

The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 15-Jan-2010.

Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment

The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance and MFs on 15-Jan-2010.

Capital Goods companies obtain many projects in the last quarter and their results in Q4 are usually strong, so it may help to buy Capital Goods companies in that are still not shooting up. For example, Havells India has already moved up 47% in last one month, including nearly 10% just today.
Closing price: 475.90
Gain: 43.10 (9.96%)

Food products and Fertilizers are also likely to do well in Q4.

The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 16-Dec-2009.

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category Date Buy Value Sell Value Net Value
FII 16-Dec-2009 2142.4 2497.65 -355.25

Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment

The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance and MFs on 16-Dec-2009.

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category Date Buy Value Sell Value Net Value
DII 16-Dec-2009 1381.57 1106.65 274.92

We are at 5150 on the Nifty and following needs to be taken care by investors going forward.

1. Nifty is at high level and valuations are just about ok.

2. Nifty is tired and short term profit taking can take it down atleast to 4800 in near future.

3. Upside is limited to around 5300-5400 so call buyers and long owners need to be watchful.

4. December is a lean period in West esp. in USA and budget constraints generally push IT billability down - IT expected to go down from its starry heights (Infy, TCS, Wipro).

5. Reliance Industries and Reliance ADAG case is expected to be a long battle. These stocks will tend to move in expectations. Reliance after bonus 1:1 will go to 1000 and consolidate.

6. Stock picks - Reliance, NTPC, Classic Diamond, Satyam, TTML, Reliance Communication, BHEL

7. Sell - Ranbaxy, Infosys, TCS, WIPRO

8. Futures - Short bias, Options - Put bias

9. A bad winter might hit the sector affected by it. Cement and realty to take hit.

10. No major change on interest rates and policy issues.

The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 02-Dec-2009.