Indian Stock: Managing Risk #6

Friday, December 05, 2008

The market is exploding...there is nothing better than taking profits and waiting in the wings for sense to prevail.  I have sold my Bank Nifty and Nifty positions...4575 and 2810 respectively...I have kept the short 2800 call and long 2500 put positions.

There will be a stimulus package and further rate cuts...these measures are meant to mitigate the impact of the deepening global economic crisis.  Yes, the financial crisis has morphed...the economic crisis is upon us...No one is immune.

Expect a reversion to fair value in the 2500 Nifty range...and expect extreme volatility to continue...we have traded in a 5% range so far today...par move these days.

Towards the end of the day I will reassess the need for a long position...perhaps closer to 2700 or lower Nifty level.

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