Posts Tagged ‘India 2014 general elections

27
Aug
14

My recent buys..

Indian markets are the second best performing market in 2014. BJP led NDA absolute majority in 2014 General elections has changed outlook for Indian markets. FII’s have pumped close to 10 bn USD in Indian equity markets since the beginning of 2014. It’s a shame that retail investors are not investing in equity markets the way they should have been. I have no doubt in my mind that we are going to see reasonably good run for Indian markets in the next 4-5 years. I have been consistently buying in the cash segment and stepped up my purchase after 16th May verdict. Some of my recent buys are:

1. Ashok Leyland – CV cycle recovery candidate.

2. Bharat Electronics – Composite FII+FDI limit hike to 49 percent in defence. BEL is the best proxy for it.

3. Crompton Greaves – On recovery path

4. Edelweiss financial services – Expecting strong earnings growth for next 2-3 years

5. Grasim – Cement sector exposure

6. Icici bank – Comfortable with valuations of icici bank among private sector banks

7. Jain Irrigation – Balance sheet repair, Agri exposure

8. L&T Finance holding – Trading buy

9. MCX – Sold some portion but still holding

10. Suzlon – Balance sheet repair and growth recovery

I have leveraged trades in Tata Motors Cairn India and Infosys. I have squared off Infy trade but still carrying Tata Motors trade. Cairn India is 2-3 months covered call trade. Given current brent crude levels I don’t expect Cairn India to rise sharply in short term.

Disclaimer: These are my personal views and you should do your own due diligence before acting on anything written in this blog. Please take reasonable care while trading in options, especially while selling. I am not advising anyone to sell or buy options. My purpose of writing this blog is to highlight my trading strategies

02
May
14

Election strategy for Nifty

Outcome of 2014 general elections is one of the most keenly awaited event this year. Gross mismanagement of the economy by the present Congress government has resulted in strong anti-incumbency this time. It’s anybody’s guess whether that anti-incumbency will result in NDA government led by Mr. Narendra Modi or it will be a Third front government. We will get to know on 16th May who is forming the government at centre. But one thing is certain that there will be high volatility with the end of last phase of polling on 12th May. Exit polls will also be aired on news channels starting from 12th May evening.

Indian markets also reacted violently after 2004 and 2009 general election results. But the big question is will there be such big reaction after election results on 16th May ? I doubt if market reaction is going to be any different and we are headed for another roller coaster ride beginning 13th May. If you take position and get it wrong then you will have tough time digesting those losses. I don’t want to take any one-sided position. With this thought process I have initiated spreads on Nifty. I have bought 6700 straddle (6700 call & 6700 put) and sold 6200 put and 7200 call. You can argue why I need to sell OTM call & put option (7200 call & 6200 put) ? I am confident about increase in volatility but also trying to reduce the cost of trade. In case the event does not pan out as I expect, my losses will be reduced. In this strategy I need Nifty movement of 5% from current spot levels of 6700 to make money.

Disclaimer: These are my personal views and you should do your own due diligence before acting on anything written in this blog. Please take reasonable care while trading in options, especially while selling. I am not advising anyone to sell or buy options. My purpose of writing this blog is to highlight my trading strategies.




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