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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.

  • suresh says:

    >Hi Deepak,

    New investor here. I trust your stop loss forumla and want to follow religiously. My online broker is sharekhan and I understand that the stop loss order expires every end of day.

    So, do you review and create your stop loss order everyday. There must be a easy way to do this. Please explain.


  • Deepak Shenoy says:

    >Suresh: I don’t place a stoploss order – I monitor stocks and get out of them when they hit my mental stop loss. In sharekhan you can set up an “alert” which will let you know when your stock moves to your price…

  • Mumbai Journo says:

    >Hi Deepak,

    Just started using the reliance money service. Unlike HDFCSEC, the RM guys do not add your shares to the portfolio immediately. They have something called ATST. So selling these the day after can be a big problem.

    There are also other issues with RM. Considering the low brokerage fees they offer, investors need to build up pressure on them to make RM more user-friendly

  • Anonymous says:

    >Hello Deepak,
    Bhudev here. I am a new investor and frankly I need some help. I am listing a few questions here, please do help me:
    1. What is the definition of a retail investor? I have like ~1.6 lakhs direct stocks and ~6.5 lakhs mutual fund holdings inherited from dad. Am I a retail investor? Who decides this? What are the benefits of being a retail investor?
    2. How do I set stop losses? You also mention about trailing stop losses. Let me give an e.g. Say I have stock X, and I want to sell either if it moves to >= rupees A or if below <= rupees B. How to do this?
    3. Is there any place to learn the way derivatives operate in NSE? On the face of it, I do understand options, but I am not knowledgeable enough to make dad’s money grow. How to go about it? Do you teach? Maybe I could pay you.
    4. How do I short and cover up? I am using Geojit’s portal.

    Kindly reply,

  • Deepak Shenoy says:

    >mumbai journo: ATST = Acquire Today Sell Tomorrow. The funda is that when you buy on delivery (not intraday) the shares take three days (t+3) to hit your demat account. The ATST allows you to sell it on the next day (and only on the next day). This si the same with sharekhan as well. I’m not defending RM – they have their share of problems as well – but in this case they’re just giving you the same level of service that others do.

  • Deepak Shenoy says:

    1) You’re a retail investor. Even if you have 10 crores, you are a retail investor 🙂 The funda is if you are a company like LIC or a foreign hedge fund, you are an institutional investor, otherwise you’re retail.
    2) Setting stop losses: Currently they must be manual. You can set an alert in a web site to let you know when your price range is breached and get out manually then.
    3) Read NSE’s FAQ or Sharekhan’s excellent Derivatives primer.

    I don’t teach but I could help you if you have any queries.

    4) Short selling – I don’t know how Geojit does it but you can ask your relationship manager or their help desk. It should be a simple option in their web site.