L&T Ltd - Another Technically Challenged Stock - 7/28/2016
Larsen & Toubro's stock has relatively easy flight from 1200 to 1600, but now next 100 / 150 something points may not come that easy. So here again, preferred strategy is to sell covered calls against the position or if you really want to short it then buy puts during the spike higher near 1700 / 1800.
You might have noticed that we seldom advise to short sell a stock because easier money can be made by buying stocks rather than shorting it. Yes, shorting can bring quick fortune but there are more factors in favor of stock price rising than for bringing it down. So for retail traders who don't have information flow and means like professional traders, it is strictly prohibited to sell stock.
Beside, large blue-chip companies are for long term holding. Trading in / out without better understanding of technicals will leave you clueless and put a dent in your equity. Nothing is wrong in buying low and holding it long term but if you have little knowledge about technical analysis then it can help you optimize the account value by very harmless strategies like covered call selling.
Also, don't forget to book profits whenever market gives you a chance like this Asian Paints trade. Here also we will be on sell the call premium mode near 1200 for partial position. These are the kind of stocks which you never leave for next 20/30/50 years but it is absolutely essential to take partial profit during big rallies so that you can use that capital to buy it again at lower levels.
You might have noticed that we seldom advise to short sell a stock because easier money can be made by buying stocks rather than shorting it. Yes, shorting can bring quick fortune but there are more factors in favor of stock price rising than for bringing it down. So for retail traders who don't have information flow and means like professional traders, it is strictly prohibited to sell stock.
Beside, large blue-chip companies are for long term holding. Trading in / out without better understanding of technicals will leave you clueless and put a dent in your equity. Nothing is wrong in buying low and holding it long term but if you have little knowledge about technical analysis then it can help you optimize the account value by very harmless strategies like covered call selling.
Also, don't forget to book profits whenever market gives you a chance like this Asian Paints trade. Here also we will be on sell the call premium mode near 1200 for partial position. These are the kind of stocks which you never leave for next 20/30/50 years but it is absolutely essential to take partial profit during big rallies so that you can use that capital to buy it again at lower levels.
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