Tuesday, January 11, 2011

Missing Retail

On Monday afternoon, the Nifty was down another 120 points or so when Ashu Madan from Religare was part of the guest list. I was also participating in the discussion. Ashu pointed out the absence of retail positions in the F&O segment. I wanted to clarify, therefore I asked a direct question to Ashu. My question was: Does this mean that the current decline is not due to the cutting of retail f&o positions? Yes, said Ashu. Retail was badly hurt when the mid caps fell in the early December decline, and, they did not come back. So, in the current decline, there were negligible F&O positions by retail. He pointed out that the selling is being done by people who actually want to get out.

My Notes: Often, when markets fall rapidly due to the cutting down of retail positions by brokers, a revival comes since smart money comes in to buy at lower levels. Now, smart money may be selling, then who will come to buy?

A second point: where is retail? Maybe, retail has become smarter than 'smart money'. I hope so.

7 comments:

ANAS said...

Respected sir, its me again.....

I had a small query in my mind, to solve the query, this is the best place. So I have come here...

COVERED CALL options strategy , is used to give a limited downside protection, and a target price for, stocks owned earlier. (well most of us are aware of it.)

I , was just wandering , wether that strategy can be used by short-sellers and put writers.

say we short sell XYZ JAN series at a certain price and along with that we write an OUT-OF-THE MONEY PUT OPTION, of the same underlying AND OF THE SAME SERIES. .

now, i believe, that it will be limiting my profit potential till a limited amount on the downside, but, it would also give me a limited UPSIDE protection in my SHORT POSITION.

Your views would be highly valuable...

Thank you in advance ...

Yours truly
Anas Elias Batla.
kolkata.

Apoorva said...

If what you have describe is true than i think Retail have become for Smart :)

alphabet1 said...

With all respect Ashu Madan wanted to wrap us up in jargon. You "cornered" him - nice.

Sunil said...

Mr. Sudarshan Sukhaniji
Your levels are really guiding us correctly. On the basis of your levels and your analysis, I could avoid to become the victim of the recent carnage. In fact, in this carnage, I made some money on the basis of your call on some individual stocks. Previously, in the absence of guiding factor, we used to get trapped in the carnages. I am really missing your absence today on ET NOW. Hope to receive your guidance regularly.

Thanks a lot.

gourv said...

Hello Sir,

As now SEBI has approved trading in INDEX furute on 24 foreign index,your comments on it.Good for traders as they can trade other index if nifty is not moving or may be in a range,and lets say FTSE is moving nicely.

Regards
Gourav

Krishna said...

Just A Thought

Nifty 6357.10 High of 2008 remains untested
• Mkt not sustained even above 6300 (anywhere near to 6357.10)
• Technically structured bull run comes when mkt keeps making new high in a given time frame (in other time frame it can be a range bound mkt also)
• Any new high not coming for the last 2 years
• Only pull back from 2008-2009 low has come till date
• In this case down side in medium to long term may become open
• And if it is open then perhaps nifty can also test many
previous lows
• Or it can even stay in some big range for stretched period of
time
• Dow remained in a range of 500 points (between 500-1000 index
value) for almost 17 years(1965-1982) (I heard so somewhere)
• So if mkt can take out 6357.10 & sustain above it, I like to
bet for another structured bull mkt in longer vision else I
shall look for a stretched range bound mkt or even very lower
levels
• Rest mkt & technicals will change every day & so the
explanation


Please share on above points with a longer vision & not for day to day basis trading.

Regards

shabsaif said...

Dear Sudarshan Jee,

We miss you on blogs, I believe it was good for us when you write frequently in your blog, because we don’t have time to watch TVs ( May be billions don’t watch TV, due to there daily works).

Please let me know any mutual fund scheme, which trading on base of technical analysis. I mean , the price of fund should always going up, compare to market will go up or down.

I think you should join and work for mutual fund rather than TV, so billion of investors benefitted. We are very busy in our daily life, so we just want to invest in mutual fund, and earn lot of money. So please don’t waist your time on TV.