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Stocks

A 5 day holiday and some performance updates

I’m taking a break till next Tuesday for an outstation holiday. I wanted to post a quick message about my momentum moves.

Two weeks ago, I decided the Nifty wasn’t going anywhere and had talked about a last minute put option I wrote before the last expiry. I then decided to do a quick two-four week strategy on some stocks which I thought would move fast, and get out of the trade soon.

First pick: Bartronics at 201. It moved up nearly 10% that day – it was up from a 180+ – and I decided this was the beginning of a move. Had been watching the stock for a while; I don’t care about the fundamentals because this was a momentum call. I’m still holding it because it hasn’t moved against me – current price: 253. Profit (unbooked): 25%. I continue to hold with a stop loss at 230. Investment: Approx Rs. 10K, profit Rs. 2,500 unbooked.

Another mover: NIIT Technologies. This stock started moving and I picked it up at 307. The momentum carried it through to 360, and it reversed back to 340 yesterday, when I sold at about 341. Profit (booked): 11%. Invested Rs. 10,000, made Rs. 3,000.

F&O moves: Last monday, I wrote a straddle – sold a 4450 put and a 4500 call, collecting Rs. 10,500 as premium for a lot. Bought back today at a net premium of 157, giving me a Rs. 53 profit. Investment (margin net of premium) Rs. 30,000. Profit: Rs. 2,500 (8.5%, booked)

Kamat Hotels: bought at 155, is at 166 currently. I have some longer term stock in, but I bought for momentum. I continue to hold as I see it moving by November. Stop Loss: 155, current unbooked profit: 7%. (Investment: Rs. 10,000, unbooked profit Rs. 750 or so)

For a total investment of Rs. 60,000, I’ve booked a profit of 5,500 and left about 3,250 unbooked profits. That’s 8,750, a profit of about 14.5% in two weeks. This is quite radical, considering the Nifty has moved up only 2% in the entire period.

Soon, I’ll try to create a model momentum portfolio with a capital of Rs. 100,000 and demonstrate how I manage it. My new company, Moneyoga, is going to help – we are creating software that will help our users (of which I will be one, of course) create virtual portfolios and track the results online, with details such as biggest losers, biggest winners, average term of holding, max risk and so on. This should be a lot of fun and learning for all.

Note: The quantities of the above have been modified proportionately.

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