Free Report: The 2020 Smallcap Guide

I Made a Killing in the Markets this Week... Here's How

Jan 10, 2020

Apurva Sheth, Editor,Profit Hunter Pro

The rally in the Indian stock markets was rudely abrupted on Monday. The benchmark index Nifty fell 2% and even slipped marginally below the 12,000 mark.

While it recovered all the losses in the following sessions, the damage, I'm afraid, is already done.

Retail investors have started worrying more about the news from the gulf rather than the stocks they hold.

The WhatsApp factory was working overtime to feed them what they wanted to hear. Many investors believed the markets dropped because of news from the gulf. However, it's more likely the markets were already on a weak footing and simply needed a catalyst to push it down.

The killing of Iranian commander Qasem Soleimani and subsequent escalation in tensions gave the markets a reason to fall - but I'm convinced they would have dropped even without this news.

What matters more than news is price action which already indicated that we should remain cautious.

You already know I am a firm believer in watching price action. I highlighted this in a video I recorded last month - take a few minutes to check it out below.

Now, let's consider what happens to the Nifty as geo-political tension escalates across the world...

 

Nifty was trading in a tight band of 12,150 to 12,300 since the third week of December. It breached below this range and bounced back from support of 12,000.

Last time I told you that the put open interest is maximum around the 12,000 strike which indicates professionals won't allow the index to fall beyond this point so easily.

Nifty has since recovered from Monday's losses after yesterday's 200 point rally. But it will find resistance around the previous high of 12,300.

This means markets are likely to remain trapped in a range of 12,000 to 12,300. They will easily be swayed by emotions of greed and fear like they did this week.

So, traders - fasten your seatbelts, volatility is back!

India VIX, which measures fear on the street, is up 20% in January.

In the midst of this volatility, however, my readers made a killing in the markets

Most investors hate volatility because it becomes difficult to ride the markets. But that is only because they fail to understand that volatility gives you opportunities to trade.

The month of December was quiet and we couldn't find many trading opportunities. But we found 4 new stocks to trade in January. One of them almost achieved its target.

--- Advertisement ---

Oops...Did you miss this?

We are sure you have been reading about the MEGA Summit that's happening at Equitymaster...

It's going to be huge, with over 10,000 readers expected to join.

Now we are told that for some reason you are yet to sign up...

If you miss it, it will be a lost opportunity.

We again recommend you Click Here to join our upcoming Rebirth of India Mega Summit with Tanushree Banerjee
------------------------------

I recommended Indian Energy Exchange Ltd. last week in two parts to my Breakout Profits readers. The first half went live immediately at the recommended price of 150.65.

The stock shot up in two sessions and almost touched our target price of 174 on the NSE.

I closed this trade on Tuesday at a closing price of 165.55 with gains of 9.89% in just 6 days.

 

We give importance to good beginnings in our culture. I couldn't have asked for a better start than this to the new year.

My readers are also delighted. Here's what they said in emails...

  • I made a killing in the stock of IEX and naturally very much delighted. Thanks.

Another reader wrote this...

  • Dear Apurva,

    On 03.01.2020 market opened gap down and as such my broker advised me not to enter the market and I could not buy shares of IEX Ltd. at recommended price.

    However, I observed that it was continuously going up. I waited for its reversal and bought 80 shares @ Rs.157.60. I bought less quantity since market was in down trend and wanted to add some quantity at lower price later but script did not give me that opportunity. And sold the same on 06.01.2020 @Rs.171.90.

    You may laugh at this episode.

Here's one more reader...

  • I entered in IEX at 153 and exited at 173. A handsome 13%. On 6th Jan when all the stocks were beaten down badly, IEX moved smartly to 173. This shows how strong you have picked a stock for trading.

    When every other stock was in Red, I was able to book profit. I can't be more delightful than this.

    Thank you for the Pongal Gift in advance.

Now If you want to join the celebrations like them then here's your chance. You can click here to know how you could join my premium stock recommendation service Breakout Profits.

Warm regards,

Apurva Sheth
Apurva Sheth
Editor, Breakout Profits
Equitymaster Agora Research Private Limited (Research Analyst)

PS: On Tuesday, 21 January, India' #1 trader, Vijay Bhambwani, will reveal a highly profitable, time-tested strategy, to make instant income from the market. Join Vijay at the Instant Income Summit. Register for free here.

Recent Articles

Corona Virus Could Trigger a Rally in this Stock February 20, 2020
A company which benefits from crude oil and coronavirus - if you would like to know more about it read this.
The Next Few Days Are Crucial for Smallcap Investors - And 3 Must-Buy Stocks February 19, 2020
While I have been writing about the rebound in smallcaps for quite some time now... I have shied from the question - When exactly is the smallcap rebound happening. Well, the answer is now.
The Missing Goldmine of Wealth Creating Possibilities February 18, 2020
The neglect that Graham's ideas receive along, of course, with the time-tested money-making potential of those ideas - means that for the few who bother to truly understand and use them, a goldmine of wealth-creating possibilities awaits.
Even the Coronavirus Can't Stop My Market Beating Formula February 17, 2020
Three basic rules i.e. a buying rule, a selling rule and a rule can help manage an entire corpus.

Equitymaster requests your view! Post a comment on "I Made a Killing in the Markets this Week... Here's How". Click here!