No new trades

Everybody is expecting market to fall tomorrow, as it is last trading day in this financial year and investors would like to book profit in this year looking at plight of the market. But market is supreme and it does always something different. However, mood is not very positive, market may go up initially on short covering and carry forward trades. NIFTY is in oversold region for some time now and may show some reversal. However, chances of closer near 5600 are more than 5700.


Ranbaxy:

I think I went completely wrong here. There is no news at least in public domain. Now wait till 3.30 pm tomorrow!

DLF:
DLF is still in downtrend and if market falls there could be still probability of profit booking. It could slip to 215/216 if everything goes good for bears on this stock.

No new trades for tomorrow. We already have had many lottery trades this month in view of volatility in the market. So just watch, if any of the earlier trades are in profit booking zone, please grab the opportunity.

Disclaimer: This blog does not take any responsibility of your profit/loss. 

Expiry week in March

Ranbaxy and DLF had gone up. Worth holding still.
Ranbaxy consent decree outcome expected today, which will take stock up by 25/50 points up if issue is resolved if not this falling market will take it to 410/405 tomorrow. Since broad market is going down Ranbaxy very soon can go to 390 if there is any negative news from FDA.
Set limit of Rs. 12 to gain quick gain. If it goes below 408 in cash it will go below 400 within very short time.
But this is purely news based and let us understand everything is based on FDA's action.

DLF looks difficult now to go below 220 before expiry.

Today there was bounce due to short covering, but basic trend is negative. Market may open gap down tomorrow and it is better to set limit for options to gain profit.

This is time for long term buying, Good stocks like LT, SBI, TCS, Infy, TATAMOTORS should be accumulated with at least one year view. Please note, FII did huge buying in cash. They sold in future though. If this continues then market may again see rally upward very soon. This is extremely oversold market. Last week normally driven by option table and PCR is less than 0.8. This is really very bearish. This is difficult to sustain at this level and should soon find support.

Disclaimer: This blog does not take any responsibility of your profit/loss

DLF and Ranbaxy

This month was good for call writers and they must have made very descent profit without much tension. Normally during middle of the month sometimes CALL premium is at least 40% more than buying price and it creates doubt in minds of CALL writers about continuing with the trade. However, this month was an exception.Not many CALL premiums have gone up.

For last week, better to sit aside and see what market does. Everybody is expecting downtrend; but market normally does behave differently that the masses. Let us not predict, that is not an objective of this blog and continue with out low risk strategies.

DLF:
Buy DLF 220 PUT in the range of 1 to 1.50. Target 4.8/7.3/8.5
It could go up to 7/8 in next three trading sessions. Infrastructure stocks are in down trend and if DLF goes below 227 in cash it could slide down to below 220. It has to cross many supports till it reaches 214/208/196, but since it is in strong downward move, it is possible to break all supports.
It is worth investing Rs. 1000-1500 and expect bigger profit.
It is advisable to keep it till expiry of this month.
Maximum loss 1000/1500 with unlimited profit potential.

Ranbaxy:
USFDA is going to decide on consent decree of Ranbaxy tomorrow. It will be at our night time though. If Ranbaxy could not satisfy FDA, many products could be under jeopardy. Though Ranbaxy is known to settle issues at the last moment, this time it could be difficult because many products could be under FDA scanner. On some of these products Ranbaxy is sitting on 180 days exclusivity. If valsartan is one of them, then loss to Ranbaxy will be huge.  If Ranbaxy misses this opportunity, investors will not like that.

Technically, stock reverted from 50% retracement level on Friday.

Bear spread strategy
Buy Ranbaxy 420 PUT between 4.4-5.0 and Sell 400 PUT between 1.50-2.00.
Maximum loss could be 1400 to 1500 (excluding brokerage) but profit potential is above 8000 if Ranbaxy closes below 400 due to adverse outcome of the consent decree.


If you have earned good profit this month and sitting on cash, then it is worth risking this 2500/-

Disclaimer: This blog does not take any responsibility of your profit/loss

IFCI

Book profit in NIFTY PUT Buy options. NIFTY may not go further south, it might touch 5620 but below 5622 in my view will be extremely difficult in this series. This view will negate if there is gap down opening tomorrow and NIFTY opens much below 5620 tomorrow morning. Then there will be further downside.

Still I will prefer exit all short positions now.
DLF 260 PUT, NIFTY 5700 PUT, 5600 PUT, LT 1400 PUT, PFC 190 PUT everywhere this is time to book profit if you have not booked so far. Sit on cash for next four trading days.
Exit Ranbaxy strategy at small loss.

Reliance strategy for next month, on first day it has definitely not done well as broader market not supported Reliance  but still plenty of time to go and one can hold.

Buy IFCI 22.50 PUT @ 0.15. Maximum investment only Rs. 1200. IFCI is in down trend and if NIFTY slowly goes towards 5620/5600 level 22.50 PUT can go up to 0.35. One can book profit or can hold if at last day of this series trading if NIFTY falls again, IFCI can give very good profit. It has strong support around 24 (option price will become 0.35), if it breaks then it can quickly go to 21. It is worth taking risk if your monthly profit permits buying of lottery ticket worth Rs 1200/-

Disclaimer: This blog does not take responsibility of your profit/loss

NIFTY and some other stocks.

PFC gave profit booking opportunity today.
Ranbaxy is still going up and it is better to exit the strategy with small loss. Or book profit in PUT sell contract.
There are not many trading days left for this series. Two holidays in next week and one is before expiry. FII continued selling, today after about six months they sold heavily in cash segment too. This is not good sign for bulls. Tomorrow as long as NIFTY is below 5700 one can keep selling NIFTY with SL 5720 in spot.

Buy NIFTY 5600 PUT @ 18-20, target 32/35. Maximum loss could be about 900-1000/lot.
NIFTY will find it difficult to go below 5615. Now also it is in oversold region. Hence, it will try to cross 5750 tomorrow if it goes above 5720 with gap up opening.
However, it is better to book full profit in all short positions (even in stocks) for this series if NIFTY touches 5615.

Buy Bhartiartl 260 PUT at 1.10-1.30, target 2.65. There are some issues with management,arrest of company officials  and stock is under sharp correction. It has broken all resistances by now. If you can buy two lots, book profit in one lot @ 2.65 and let other stay till expiry. It can go further down. It is lottery ticket, might give good returns in very low risk in this highly volatile market. 

Reliance can do well due to decision today in next four trading days and if broader market supports  it can see level of 870/880 in near future. In this falling market, real investors will find stocks where they can invest for long term and stocks like Reliance will benefit.
Buy Reliance 840 CALL of April expiry in the range of 22-23 and sell 860 CALL of April expiry in the range of 14-15.
Maximum loss could be around 1750-2000 and maximum profit could be around 3750-4000 at April expiry.

Disclaimer: This blog does not take any responsibility of your profit/loss

Axisbank

This is the time took profit in all short positions.
One can hold Ranbaxy strategy till expiry. This strategy is showing marginal loss.
Book profit/partial profit in all CALL sell positions recommended so far.
PFC gave another opportunity to book profit/break-even. Let us hope it gives descent profit. It will be very risky to hold 190 PUT as this stock has very strong support at 181/178.5 level. If this support breaks then there could be free fall. Unfortunately this option is not very liquid and there is always lot of difference between bid price and offer price. Better to set limit. 

Broader market might show sign of recovery tomorrow. But as long as it is below 5790, it is sell on rise market. Huge selling by FII, problem with Government and no new trigger to take another jump shall bring back market to 5650 level in near term. However, tomorrow it could try to cross 5775/80.

Strategy for tomorrow, and this is only for tomorrow.
Axisbank shown strength during last trading hour in spite of adverse market conditions. It shows hammer candle at daily chart. This is normally very bullish signal.
Buy AXISBANK future at 1333-1337 and Buy 1300 PUT @ 14-17. Enter in both trades simultaneously.
Target for future will be 1350/1360.
Once future reaches 1350/1360, exit from both Future and Option.
SL 1285. If it touches 1285, exit from both. Or before end of the day exit anyway and let us not wait till DMK's ultimatum.

Disclaimer: This blog does not take any responsibility of your profit/loss

Market before RBI policy and no new trades!

No new trades.
A day prior to credit policy in last four/five occasions saw upswing in NIFTY, later irrespective of whether there was rate cut or no rate cut, market declined by about 100 to 350 points.

Similar behavior can be expected this time too. However, since there is lot of liquidity still maybe market may not see huge fall.
So market could go up in an expectation of rate cut tomorrow. As mentioned earlier 5972/5975 could be resistance level, if it is crossed it could go beyond 6000. That could be the time book partial profit on long NIFTY call options/other stocks options. After initial euphoria market could show downward moment as last occasions and could touch 5600/5650, it is the time to book profit in short positions.

I will not advocate of taking any new trades till there is clarity, which one can expect after March 19.

If NIFTY touches 5600, then really it could be strong buy from thereon. NIFTY will find it difficult to go below 5700 and one can start accumulating NIFTY CALLs from thereon for  April/March expiry.

Disclaimer: This blog does not take any responsibility of your profit/loss.

Reliance

Market is unwilling to accept any negative news and this means there is strength in the market.
Today morning there was news about scam in banking, video was shown on channels, but market neglected it.
There was not so good inflation data, but still market withdrew some positive conclusion about rate cut from these inflation numbers and neglected outcome.
Everything is being looked at as if all problems before our nation will be solved after 25/50 basis point rate cut. Every junior economist would understand if CRR/Repo is cut, bank will find difficult to get deposits. Even today's inflation rate is (much) more than bank interest after tax. Situation will become worst if there is further rate cut. This simple logic every banker knows.
Maybe real reason could be something different. Government wants to dis-invest and falling market perhaps not good for the government for dis-investment strategies.

This is merely trading market, not good for swing trades/investors.
Keep track on FII activities. Many times one can smell something. FII sold huge in index future first time in this month, though they continued buying in cash segment.
Don't be surprised if market goes to 5850 level tomorrow. It can very well happen. Bank scam will come again on surface. And once news is out about rate cut on Tuesday, from next day, there will be normal trading, those smart money investors who bought on rumors will start selling on news. They have all OTM puts bought to cover their losses if they could not exit on time, perhaps retail investor can not do that strategy due to lack of funds.
In spite of all this if at all market crosses 5975 then it can quickly go to 6050/6070 before RBI announcement on Tuesday. Book profit in long NIFTY option call then. And Sell more 6200 CALLs for April expiry.

Reliance:
It had rallied from 800 to 860 in past few days, In remaining 10 trading days Reliance will find difficult to cross 900.
Sell Relaince 900 between @ 7.5-8.5.

PFC: It did not go down below 188/189. I am still holding maybe it will give one more chance to book profit.

Ranbaxy

NIFTY has turned down. I don't want to bet on NIFTY, it will again decide tomorrow at 11 am when inflation numbers will be announced. IIP data was good, so as per simple economics, inflation should be reduced. Because supply is more, demand should be same and as per basic economic principle supply is more than demand and it should reduce inflation
If inflation is in control RBI will get reason cut rate at least by 25 basis point and market will cheer that. There could be indirect pressure on RBI to adjust interest rate. If RBI succumbs to the pressure then we can see 50 basis point rate cut and again 6000/6050 levels in NIFTY. Rate cut is almost certain and market will start reacting positively from beginning of next week.

So it will be advisable to book profit in short position in next two trading days and not to take risk in speculating what RBI will do.

One low risk strategy:
Bear spread strategy for Ranbaxy:
Company had all sorts of problem, stock went down to 380 level and bounced back, perhaps it will reach up to 430 before it will retrace back.
Buy 420 PUT at 10.50-11 and sell 400 Put at 4.50-5. Maximum loss could be around 3000/- and maximum profit could be around 7000/- if stock closes below 400 at expiry.
This stock has less relevance on RBI policy, risk reward ratio is good. Chances of hitting 400 is above 60%. One need not wait till expiry and the soonest one sees profit of 2%, should exit the trade.

PFC: May give another opportunity to book profit very soon. One should grab it and not wait till RBI policy and stock going down below 180. If it goes below 180, then 165/160 levels are easily possible.

Disclaimer: This blog does not take any responsibility of your profit/loss

NIFTY Strategy

NIFTY went down as expected today.
But still be very cautious, it is not going down in speed, so this might not be end of wave v, on the contrary there is buying at every dip. So in short, still there is strength in market, FIIs are buying, global markets are supporting and overall very positive mood to take NIFTY near 6000/6030 till announcement credit policy.

Market will take direction after RBI policy. Hence let us adjust our as usual low risk trades keeping this view in mind. Buy OTM Calls and Puts. But book profit the soonest you see more than 2% gain over your investment.

Buy 2 lots of NIFTY 6100 CALL of March expiry at  around 15-16. Total investment will be about 1500.
Buy 2 lots of NIFTY 5700 PUT of March expiry at around 18-20. Total investment will be about 1800.

Market has to take one direction after credit policy. Book partial profit when you are near break-even point and hold other lot/(s) till expiry/support/resistance levels of NIFTY.
Risk reward ratio is very good. Risk is only Rs. 3200 for total 4 NIFTY lots, but unlimited rewards if market takes decisive route after policy.

Disclaimer: This blog does not take any responsibility of your profit/loss. 

INFY and TCS

NIFTY is showing no sign of weakness except it showed reversal from 5970-75 region. But I don't think it is completion of wave (EW)  v otherwise there could have been stiff fall. FII are again buying like anything. Today global cues are strong and tomorrow, if market gives positive opening this level could be easily crossed.
High expectations are built about rate cut. Maybe 25 basis point is already discounted in this rally but more cut could carry this rally forward.
There could be some hiccup after IIP data tomorrow at 11 AM and if it is not as per market expectation, their could be temporary southward movement.

IT stocks especially TCS and INFY shown weakness. Perhaps they are highly priced by now. And this is genuine profit booking. There is not much room left now for both to take further strides. Rupee is also slowly appreciating, these stocks have nothing to do with RBI policy. So all said and done selling OTM Calls for both seems to be safe strategy.

Sell 3150 INFY March CALL at 7- 7.50
Sell 1650 TCS March CALL at 6-6.50 Or
Sell 1800 TCS April CALL at 8-8.50, but exit before quarterly results next month around April 12.

One should able to gain about Rs.2000 in next 16-17 days by selling these CALL options.


Disclaimer: This blog does not take any responsibility of your profit/loss. 

Wait and watch for next few trading sessions

Next week is going to be very crucial for market. Be very safe.
IIP data, Inflation numbers and finally rate cut by RBI on March 19. These events will decide market's future direction.
It will be advisable for low risk takers to do nothing.
But still there few low risk trades for the week.

NIFTY:
Sell 6200 NIFTY Calls for April expiry in the range of 28-32.
Even after 50 basis point rate cut NIFTY will find strong resistance to cross 6200, near a life time high. In call selling one should able to find out where NIFTY or stock price will not reach. In my view 6200 in next 7 weeks would be difficult considering the fact NIFTY covered more than 250 points in last five trading sessions.

LT:
LT is in bullish trend in last five trading sessions. This is based on assumptions of rate cut. RBI Governor's negative comments about GDP growth and inflation after market closer on Friday would curb the rally (if it is based on exception of rate cut) on Monday/Tuesday. However, it (NIFTY and LT) may move upward direction prior to announcement on March 18. This assumption is based on general trend before last five RBI policies.
As per EW also there could possibility of end of wave v near 5950/5960 and a sharp fall. Of course this will happen if it is wave v. Or rally may continue (if there is no sharp fall) if it is wave iii.
But still there is an outside chance of reversal during next two trading days.
LT was in down trend before last five sessions, it is still below ichimoku cloud, near it's resistance level around 1500.

Sell 1550 LT Call for March expiry @ 27-32.

PFC:
I am still holding PFC. The stock did not participate in market rally on Friday, perhaps it has started reversal again towards 180 range and shall give at least one opportunity of profit booking during next two trading sessions.
No need to average but those who have not bought 190 PFC put earlier can buy now with much lower risk.

No further analysis this week

NIFTY went up, PFC went up, IFCI did not reach buying range. Nothing worked today. Such a mega event was not expected.
Still holding PFC Put 190 option. Hoping again it to come down in the range of 8-9 where there cold be at least break-even.
When nothing works in your favor, one should sit back, relax. I am not doing any trade and analysis for rest of the week.
It seems no harm yet in holding Call sell positions advised earlier. NIFTY 6100 CALL option of April will be now at very attractive price. Today all markets were up and impact will definitely last tomorrow. If that happens 6100 April CALL will be available around 25-30. It is worth selling 6100 April CALL.
If 6200 April CALL is available around 15, it is also good deal and one can sell 6200 April CALL.
Sell Reliance 900 Call at 4.5. These all appear to be safe.

So wait and watch market movement. Next post will be over weekend.

Disclaimer: This blog does not take any responsibility of our profit/loss 

PFC and IFCI

PFC gave one profit booking opportunity today.
It is still in downtrend. Perhaps it could show some initial up movement tomorrow along with market direction, however, eventually it should settle around 178-179 before it will start recovery.
If it touches 178-179 within next two days, then 190 PUT option would be priced at 14-14.50. Better to book full profit in the range of 13-14., partial booking in the range of 10.50-11.10.

Buy IFCI 25 PUT at 0.95 and sell IFCI 22.5 put @ 0.50.
Maximum loss could be around 4000/- and maximum profit could be around Rs. 16000 if IFCI closes below 22.50 at expiry.
Kindly book the profit as soon as there is gain of about 2%, when IFCI would come near 26/25.75, gain in this strategy will be more than 2%.

New Strategies

First week Option trader should concentrate on Option Call sell to get maximum advantage of time value.
If one compares NIFTY Option table for the month of April, open interest considerably go down below 5500 PUT  and above 6000 CALL.
So traders feel till April end NIFTY shall stay between the range of 5500 and 6000.
So one should sell 6100 CALL and 5300 PUT.

Strategy 1:
Sell 6100 April CALL @ 15-17
Sell 5300 April Put @ 13-15

Assuming even high brokerage rate, Rs.100 per lot, if one could exit at mere Rs. 10 profit in each lot One should able to gain Rs.300/- per lot of NIFTY. Your exit point should reach say by fist week of April.
So this could be reasonably assured Rs. 300/- per lot of NIFTY within one month. Each lot of NIFTY would require margin money about 12000, so this would be more than 30% return on investment.
I would recommend to employ 40% of your trading capital in to this NIFTY strategy.
If someone wants to be more safe can only sell 6100 CALL options, normally market would take more time to go up than go down.

Strategy 2:
Sell Reliance 880 March CALL @ 5-5.50
If Reliance reaches above 875 before March expiry then exit.

Strategy 3:
Sell LT 1600 CALL @ 5.50-6.00
If LT reaches 1580 before expiry before March expiry then exit.

One each of this strategy would make you wealthier by approximately Rs. 1000/- per trade on about 30000/35000 margin money. This is more than 30% return on investment. One should invest 20 to 25% trading capital in these two trades.

Lastly if there is still room to accommodate some more trades then for one week one should take following trades. These trades should be kept active either for one week ( and exit on Friday if they are making loss) or book profit the soonest there is 2% ROI.

Strategy 4:
Bear Spread strategy for PFC
Buy 190 PUT @ 7.3-7.5 and sell 180 PUT @ 3.30-3.50.
Maximum profit if PFC remains below 180 till March expiry will be approximately 12200 and maximum loss could be approximately 7800  if it closes above 190 at March expiry. However, one should exit the soonest there is 2% gain.
If PFC reaches around 184/185 during next week, this trade will be giving more than 2% profit.

Strategy 5:
Bull Spread strategy for Titan
Buy 280 CALL @ 8.7-9.0 and sell 300 CALL @ 3-3.25

Maximum profit if Titan closes above 300 till March expiry will be approximately 14300 and maximum loss could be approximately 5700  if it closes below 280 at March expiry. However, one should exit the soonest there is 2% gain.
If Titan reaches around 280/282 during next week, this trade will be giving more than 2% profit.

Strategy 6:

Bull Spread strategy for TechM
Buy 1120 CALL @ 32-35 and sell 1140 CALL @ 25-28

Maximum profit if TechMahindra closes above 1140 till March expiry will be approximately 3300 and maximum loss could be approximately 1700  if it closes below 1120 at March expiry. Since maximum loss could be about 1700, one could continue with this strategy till expiry. Or exit if one sees descent profit of Rs. 1500-2000 anytime before expiry.