Portfolio for the week- Update

This week it seems market will be governed by global activities such as US funding bill today, and instability in Italy.

Portfolio:
Hold Aurobindo CALL
Hold Jindal Steel PUT
Hold TCS CALL
Hold DLF PUT

Buy HEROMOTOCORP 2100 CALL between 58-62

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

Option portfolio for the first week in the series

To start the month enter in some NIFTY sell calls.
Sell NIFTY 6500 Calls of November expiry in the range of 30-40.
Don't sell all lots tomorrow, do invest 40% of the capital allocated for NIFTY CALL sell and keep averaging later if NIFTY goes up substantially from current levels.

As long as NIFTY does not close convincingly below 5800, this is medium term bull run. Though now sentiments are weak, it can change momentum any time during this week.
Also in view of corporate results starting with Infosys, one should not expect too much down side in NIFTY in very near term. This view can fail if Rupee slides down further.

This month we should take some mixed positions with positive view of IT, Pharma and two wheeler companies and negative on Banks, real estate and other rate sensitives. we have to exit all positions together.

Option portfolio for the week.

1. Buy NIFTY 6150 CALL between 55-58
2. Buy BANKNIFTY 9800 PUT in the range of 400-440
3. Buy DLF 130 PUT between 9-10
4. Buy Aurobindiopharma 220 CALL between 6.10-6.40
5. Buy TCS 2200 CALL between 20-22
6. Buy Jindal Steel 230 PUT between 9.00-10.00
7. Buy HEROMOTOCORP 2100 CALL between 65-68

Total investment in the portfolio will be around 60000/-.

If this portfolio anytime earning more than 10%-15% in week (net of  brokerage) , it is better to exit entire portfolio at the same time. Keep analyzing profit/loss of the portfolio everyday rater than gain or loss in an individual option contract.
Since this is first week, time value will not erode too much before Friday. We will analyse portfolio everyday and see whether something to be added or deleted throughout the week.

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

Trades for the last day

NIFTY took support at 5800-5820 level and bounced back to day open. It gave hammer candle. This is first bullish sign after three/four days. Lower price was rejected and NIFTY is set for an up-move.

There is lot of liquidity which is supporting up-move. Though major indices in world are in red, Singapore NIFTY recovered and very soon will be in green. This hints today NIFTY may not see huge fall which one would expect based on global cues, profit bookings on expiry date, many gloomy factors in our economy etc.

Book profit in all bear positions if NIFTY goes in support zone 5820-5800 today again. Expect lot of volatility being an expiry day after 2 PM. There could be panic selling/buying and if NIFTY is close to 5800  that time buy 5800 CALL , which should be cheap around 8-10 and buy 5800 PUT, it will be also around 8-12.

In the same manner, if NIFTY is close to 5900 at around 2 PM buy 5900 CALL , which should be cheap around 8-10 and buy 5900 PUT, it will be also around 8-12.

But if in case NIFTY is away from 5800, 5900 + 10 then don't take this trade.

Only if there is substantial profit in your trading account, then invest in OTM CALLs and PUTs today in stocks with very high IV.

Example:
Buy AXISBANK 1000 PUT between 2-3. Total investment Rs. 750/-
Buy Reliance 840 PUTs between 3-4/-
Buy TCS 2000 CALL between 3-4/-
Buy BHEL 150 CALL between 0.30-0.40

Total investment in these contracts will be between 3 to 4 thousands but even if one trade clicks it could add huge profit in your trading account. But be prepared to see your profit of this month eroding by 4000/-



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

NIFTY

NIFTY has again formed a firm resistance level in the range of 5850 and 5880. It seems unlikely to break this barrier before expiry date this month unless we experience strong gap down opening either tomorrow or day after tomorrow.
FIIs are buying in Index future and selling in stock futures and options. Very broadly this could mean, FIIs are sellers but hedging their sell positions in stocks by buying in NIFTY futures. So their overall bias is negative with caution.

Till this time, though most world markets are in red, Singapore NIFTY is in green!

In these mixed cues hold all positions. Trend in Rupee could decide fate of the day. Banking could be negative and IT could be positive and this might not allow lot of movement in NIFTY.
Perhaps one can buy NIFTY 5900 PUT in the range of 30-40.
If in case NIFTY breaks 5850-5880 range and reaches to next support around 5800-5820, this trade would be profitable.

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

SBI

Hold all bear positions till NIFTY goes in the range of 5800-5820. Part book profits then and hold rest for further downside.

SBI
Buy SBI 1600 PUT in the range of 15-25.
Hold till expiry. Perhaps this investment will provide very high returns in small investment.

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

Strategies for last week of September expiry

Friday as expected RBI governor increased rates, market did not like that, but since there is lot of liquidity in market, one could see buying at every lower level. There are many support levels and NIFTY respected 5930 support on Friday.

Strategies recommended on Friday turned out to be useful and helped trading account to turn in to marginal green.

Last week will be driven by option table.
Only analysis of option table indicates expiry closing might not be much above 6100 and at the same time even in very adverse scenario, it will not go down below 5700. Of course this is very broad range considering only four trading sessions.
PCR is about 1,59 and is near to overbought range.

Dow was down on Friday because though Bernanke continued bond buying program Federal bank can continue support such buying only for next two weeks. American markets were looking for some more assurance from Government which did not come till end of the closing session.

In view of this one can expect gap down opening and negative sentiments mainly towards banking stocks.

Dish TV:
Dish TV is in uptrend. But now very close to ichimoku cloud, RSI is in overbought region. Normally stocks show at least one stiff downward move before further rally. This will be the right time to bet for this short possible down trend at least up to 45.

Buy Dish TV 47.5 PUT between 0.75-0.85. Target 1.85/3.2

IDFC:
This month end IDFC again reached up to 100. It would face strong resistance in the region ie 100-105. If banking stocks under-perform as anticipated, IDFC will again touch 88-89 levels in cash.

Buy IDFC 100 PUT between 2.50-2.90. look for the targets above 8/- before expiry.
If IDFC goes near 88-89 in cash this option contract will give handsome profit. If it goes below 88, next support is 84.


M & M
Finally markets do not hear anybody. Market could go up or down based on many forces and nowadays can be controlled by any single event for more than day or two.
M & M is in up trend. Good monsoon should improve tractor sell and stock could easily cross 945 in short period.

Buy M & M 900 CALL between 9-10.

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

NIFTY Bank NIFTY and Axis Bank

Today it is time for Rajan. If he also rides on waive of popular decisions, market could see new highs in spite of two digits inflation, weak Rupee (still above 60), costly crude even after war threats have diminished and unfavorable BOP.  However, if Rajan brings some measures for liquidity squeeze, market will not like that and there will be huge profit booking in banking sectors.
Some banks obviously under RBI guidance started offering house loans and car loans at cheaper rates and if there is major announcement with that effect, in spite of gloomy environment in the country market will show spurt.
So in short there are lot of ifs and buts. At the time of writing this blog Singapore NIFTY is in green. This means trades are buying still at such a high price. This is unusual, nobody will buy anything which is costly howsoever rich he/she is. Hence there is argument for NIFTY going up by another 100/150 points from here.

Nevertheless, if there is rate hikes then NIFTY can see 5800 levels again. And I personally would like to take that bet even if  I went wrong in past 11 days! I never anticipated 20% rally in just 11 trading days, this is what an option writer does not want. The Trading account is in loss as hedged NIFTY buy CALLs were just not enough to absorb losses in Options CALL sale contracts.

Still one week to go and anticipating rally to curb henceforth. Today definitely there will be 100 points move possible in NIFTY after announcement and since I am still holding shorts, wish it to be towards south.

Recommendations for the D day:

Buy NIFTY 6100 CALLs between 70-75 of September expiration or 6200 CALL at 50 of September expiration date before taking any bearish positions mentioned below.

Buy Axisbank 1050 PUT of October expiry between 40-45.
Though yesterday FII permitted to invest in Axisbank, perhaps this stock is still more vulnerable for any adverse announcement from RBI today and shall see correction till 800 very soon. It has huge profit potential.

Buy BankNIFTY 11000 put between 160-170 for September expiry.

Both this trades are in anticipation of rate hike or liquidity squeeze announcements today and plunge in Bank stocks. Nothing has changed in 11 days, NPA concerns and bad debts must be there and bank stocks will collapse faster than others.

NIFTY: Buy 6000 PUT between 30-35. If in case market corrects as mentioned it will take support at 5800-5820 levels before expiry and 6000 PUT of September expiry could trade in the range of 180-220. Risk reward ratio is very good.

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

Update

No doubt there will be huge gap up opening today as Bernanke surprised markets.
For us after many months this is very bad month so far, it is very painful to be on wrong side of the market.

But have patience. Wait. Perhaps this will give our Rajan chance to hike Repo rate or at least CRR tomorrow and market will not like that. Certainly there will be profit booking and market by close of tomorrow could see 5800 levels again!

If rally continues tomorrow we will book loss.
Till then keep averaging NIFTY 6100 and 6400 CALLS of October expiry.

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

NIFTY and Axis Bank

As usual market is doing what is unexpected. Rupee is not stabilizing, inflation is high, GDP growth expected below 5% but NIFTY is touching new high every day or at least reluctant to close below previous day's close. It is not closing below 5800-5820. Suddenly 5800-5820 has become buying range for traders. This is bullish signal.

So one should not miss the boat if NIFTY moves upward after Friday's RBI meeting in spite of all odds.
Buy 6000 CALL in the range of 55-60.

Axis Bank:
This stock has risen quickly from 790 levels to 1100/- in spite of investors knowing all the issues!
If market cracks after Friday these kind of stocks could go back to their original levels with more speed than they grew.
Buy Axis Bank 1000 PUT at around 20-25. Target for the day will be around 42, or hold till RBI announcement.

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

AMBUJACEM

Market may go up and cheer announcement of Narendrabhai  as PM candidature.
But main trend deciding movements will happen later this week first by QE tapering by Mr. Bernanke followed by our RBI Governor on Friday.
Let us not add any new trades and increase the risk, it is better to carry the quantum of risk which we are presently holding.
Normally every month we get at least one block buster trade, for example IDFC in last month, TCS/SBIN in earlier months etc. This month so far there is none and it made difference in trading account.
However, it is better to stay away from market when you don't have any view rather than trading in the direction of hope and losing money.
So hold TCS CALL, BANK NIFTY 10200 PUT etc. Keep averaging NIFTY CALL sell option contracts if you get at higher prices than your last purchase.

For those who want to try hand (luck?) every day can buy OTM PUT of Ambuja cement.
Buy 165 PUT of AMBUJACEM between 1 to 1.30.

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

NIFTY and TCS

Market should give gap up opening tomorrow based on good IIP numbers. Market is in up trend and finding reason for up move. This slightly good IIP numbers could indicate good GDP growth in last quarter and it is enough for NIFTY to cross 6000 mark. Only if Rupee falls further tomorrow during start of the day it will negate this hypothesis.
FIIs again sold today in F & O segment though they were buyers in cash segement. So it seems FIIs till today were negative for short term but bullish in long term. This might change tomorrow based on IIP data.

Buy 5800 PUT between 105-110. One may get it if market gives 70/80 points gap up opening.
Buy TCS 2000 Call @ 60 and Sell TCS 2100 Call around 25-30.
Keep averaging 6100, 6200 and 6300 NIFTY CALLs if NIFTY gives positive opening above 5920. NIFTY will move quickly to 6060 if it crosses 5920 convincingly.



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

Update, Reliance and TATAMOTORS

Book profit in Ranbaxy 520 Call sell.
Book profit in JP ASSOCIATE 40 PUT.
Keep averaging and adding 6100 NIFTY call sell option contracts of October expiry and safe traders should sell 6300 and 6400 NIFTY Calls of October expiry at current market price.

FII sold in F & O segment first time after 3rd September. This is worth noticing, if this continues tomorrow then there is reason to think that this rally is coming to an end. Also all indicators are in over bought zone.
The main reason of this rally is Rupee appreciation and that is not due to any fundamental changes but in hope of future actions by new Governor.  In absence of any long term view by RBI, Rupee may slide soon below 65 and market could react quickly. In short, better to book profit in long positions.
Reliance:
If market corrects all those stocks which moved fast will come down in equal speed from where they started up move. Reliance could come to 750 level again. It is buying level.
Buy Reliance 800 PUT of October expiry between 14-16.

TATAMOTORS:
Sell 410 CALL between 1.60-2.10

However, hedging  is must.
Buy some 6500 CALL options of September expiry at around 45/50 to make profit if rally continues till month end.



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

NIFTY and Yes Bank

The speed with which NIFTY gone up was not expected at all. With this speed and probable gap up opening tomorrow NIFTY will touch 6000 again within next one or two days!
This euphoria will be over by next week and traders have to face ground realities of weakness in fundamentals and out come of QE easing.

Keep averaging NIFTY 6100 sell CALLs October expiry.
One can sell 6400 NIFTY Calls of October expiry at current price 52 to 60. This is more safe.
Sell NIFTY 6100 NIFTY Calls of September expiry between 54-60.

Yes Bank
Sell Yes Bank 360 Call between 6.50-7.00


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

Ranbaxy

Book profit in Yes Bank and BHEL.

Ranbaxy:
Ranbaxy may not go beyond 480 in this series. Sell Ranbaxy 520 CALLs between 8-10.

One can expect lot of volatility after 2 pm today due to extended weekend ahead. It is better to stay away and do preparations for next trades after market resumes on Tuesday.

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

Ranbaxy

Market is indecisive. It moves up for three days and loses all gain in one day. It has done this three times in last 20 trading days.
General sentiments are weak and traders are selling at every height.
Stick to defensive stocks (Pharma, FMCG), news based stocks JP Associates) , metal stocks (BHEL) and some selected auto stocks in shaky market.

Ranbaxy: It could give closing above 480.

Buy Ranbaxy 450 CALL at around 32/33 and sell 480 CALL around 19/20.
Maximum loss could be 6000/- but trade has profit potential 9000.

Don't wait till Rs. 9000 profit and exit the trade if gained 2% profit over investment.

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

ITC and JP Associate

Exit Maruti strategy at marginal loss.
Book profit in IDFC PUT sell

ITC can rally up to 340
Buy ITC 320 CALL at around 12 and sell ITC 340 CALL around Rs 5/-
If ITC closes above 340 at expiry maximum profit could be 13000/- or if closes below 320 maximum loss will be 7000/-
Risk reward ratio is good. One need not wait till expiry and should book profit, if trade is giving more than 2% return on investment anytime before the expiry.

Average NIFTY 6100 lots. or Sell 6200 October expiry NIFTY call around 20/-

JPAssociate:
Sell JP Associate 40 PUT between 4.5 and 5. SL 6.5, Target 2.6/-

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

Trades for new series

After good last month, let us begin with baby steps in new series.
As usual first week must be used by option trader for CALL sell purposes, to take maximum advantage of time value.

Sell Tatamotors 360 CALL of September expiry series between 1.25-1.50
Sell Reliance 960 CALL of September expiry series between 4-5.
Though both these stocks are in somewhat uptrend, the probability of  these stocks reaching 360 and 960 respectively is less than 10%. Hence there is more than 90% chance that one can earn about Rs. 1000/- per trade by investing approximately Rs. 30000 to 40000 in margin money for less than 25 days. This is more than 4 times of bank FD interest!
Sell NIFTY 6100 CALL of October expiry between 20-23. Do not sell all CALL tomorrow. If NIFTY goes above 5550, then average some more 6100 CALLs.

Safe trades should enter in only above three trades (Tatamotors, Reliance and NIFTY) and below YESBANK strategy..

Low risk strategy for Yes Bank: Yes bank is in down trend, but it could give pull back up to 280/290.
Buy 250 CALL of Yesbank at around 20/-
Sell 290 CALL at around 7-8
Sell 180 PUT  between 3-4
Sell 170 PUT between 2-3

Exit this strategy only if YESBANK slips below 200, with very marginal loss. profit potential is 15000 to 17000 if YESBANK crosses 290 at the time of expiry.

BHEL:
Risk takers can buy BHEL 125 CALL only if it crosses 6.25.

IDFC:
It seems IDFC formed bottom around 75.
Sell IDFC 75 PUT in the range of 3.30-4.20. Target 2.20/1.55. Book loss if IDFC goes below 75 in cash.

Short term trading portfolio:
Buy Bajaj-Auto October future in the range of 1825-1840 and simultaneously buy 1850 PUT of September expiry between 60-70. Kindly check values of the option contracts due to less liquidity.
Maximum loss could be around 10000/- but this trade has unlimited profit potential.

Sell Maruti October future in the range of 1240-1230 and simultaneously buy 1250 September series CALL in the range of 55-65. Maximum loss could be 8000/9000 but this trade has unlimited profit potential.

Important: If due to gap up opening, if prices are not in the desired range then don't enter in to the trade.

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