Short CAT

Hi Guys,

We have had a momentous run after the US presidential election, especially in the Industrial stocks. I think the stocks have gone too far too soon and am expecting a correction. In this Post, I am looking at CAT (Caterpillar).

The stock is sitting at the current levels since mid-November, but the other indicators like RSI, MACD are losing steam. So, is this distribution or a short-term top?? I think the stock has topped out for the short term and might see a 10% correction.

Here the Trade: Options - Calendar Spread

Buy a march 20th 85 pe for 1.44 and Sell a Jan 27 85 pe for .49. the total cost of the trade will be .95 Cents.

The idea is there will be correction but the correction won't be quick... The stock has to be above 85 until Jan 27 to make the maximum impact. Good Luck!

Buy LIGHSGFIN

Buy LIC housing finance @ 209 or above for a target price of 240+.. The stock has an intermediate/ short term resistance at 209 and is likely to go up once that resistance is taken out! Trade with a strict Stoploss of 206!

Short Exide India

Short ExideIndia @ Current Value of 136 for a target of 120 with a Sl of 140.

Reason: The Stock has fallen on huge volumes on an up day followed by an up move with very small volumes. Also the stock is at intermediate resistance levels at 138.

Trading Options

Hey all,

I have recently learnt a thing or two on trading Options and mesmerized by the amount of money that can be made intraday with limited money.... In the coming days, I will post a few of my trades and see if i can develop a strategy which can be developed by my fellow traders...

I am also working on the Volume analysis which looks quite interesting for futures trade... I might post a few calls in this form...

Thanks

Have a great trade...

Chitanya Chitturi...

Post Budget

                                                                                                                                             Date: 02\28\2010

Look back: After a decent budget last week, there was a big up move led by banks and financial institutions and NIFTY was finally able to break the psychological 4930-4950 levels and reached a high of 4970 before closing at a mediocre 4922. I believe that the selloff in the last 30 minutes is due to profit booking of the intraday traders. The buying was in huge volumes and the FII’s poured in money and bought in bulk. The US markets were pretty strong throughout the week along with the Asian and European markets.

Week Ahead: As the Nifty closed the week at 4922; the bears and Bulls are at par. If the market closes above the 4950 levels on Tuesday (Monday being Holi), one can expect some kind of rally as the next major resistance for NIFTY is at 5180 levels. This might only be possible if the world markets show continued strength.

Trade Analysis

I had been a trader/gambler for a year now. Following a year of rigorous research, reading, trading and gambling; I am blessed with some know-how of the basic trading strategies and understanding of how the market makers trick people (called Herds or weak money) into various wrong positions. Over the last year, I have learnt about the Moving Averages, Volume Analysis, Chart pattern Etc and although I knowledge is only the millionth of the Tip of the Iceberg; I have decided to write about my trades and the market trend in general. I am no master, No expert, no Genius about the analysis and only write whatever I analyze. I am a student of the market who can be wrong, who will be wrong but never OUT. This analysis is for my own learning; learning from my mistakes and is not intended to misguide anyone. If anyone follows this blog; feel that I am wrong in my scrutiny, than they are more than welcome to correct me.
I am a firm believer in whatever I see and I believe that the charts are the trader’s best weapons.