It is now risky to take any new position

Book profit in SBI 1900 CALL.

Now everybody is expecting NIFTY to climb 7000.
I don't name analysts but 99% of them are convinced about continuation of up move and perhaps have all the reasons to think so. Also if Raghuraman Rajan does rate cut or even keeps rates unchanged NIFTY will find reason to cross 6900 on Tuesday. So far NIFTY is crossing all speed-breakers in style and no mood of even showing 2% correction after 10% run up in past 20 trading sessions.

But it will be risky to enter in markets now.
The best way to trade to buy NIFTY with SL of low of prior day in cash and then trail SL to maximize profit.
So buy NIFTY future on Monday with SL of 6644 in cash. Two it in multiples of two lots. Book profit in one lot quickly if it goes up and hold other lot with trailing SL.
In last seven trading sessions NIFTY has not broken previous day's low. If up trend is to continue this will keep happening and one would not miss opportunity of riding the positive wave.

At the same time keep buying 6400 PUTs and hedge Future buy positions.
Buy 6400 PUTs near Rs. 25.
Hold for day or two and exit if there is loss after two days. No point in doing any positional trade in such a volatile market.
We are not taking any more trades other than mentioned earlier in this blog. I hope all trader remember monkey story. For those who would like to refresh memory, it is attached here.
http://mbstories.quora.com/Welcome-to-the-Stock-Market



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

What to do after losses in this month?

A worst month in my option trading history. Every week my trading account became more red than the previous week. I could not find a single good week and always at wrong side of the market.

Who will recover my loss other than market? This is how I will be strategizing for coming weeks after bearing losses this month.  I noticed for April, CALL premiums have increased twice as that of PUT premiums.
PUTs are cheap.
FIIs are buying everyday in huge quantity.

1. Roll over NIFTY CALLs during the day.
2. Sell 6700 CALLs of April expiration date.
3. Buy 6400 PUTs of April expiration in descent lot size today. It is trading around 35-40. Just buy it.
4. Buy Reliance 880 PUT around 16-17 of April expiration.
5. To hedge the bets buy small quantity 1900 CALLs of  SBI of April expiration.

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

Roll-over all CALL sell positions

Today NIFTY consolidated to go up by another 50/60 points tomorrow.
Just carry forward your positions, roll-over.
Buy 6700 CALL of March expiry near Rs. 4-5, maybe it could turn out jackpot. FIIs are buying like anything. By simple analysis risk reward ratio is not good for anybody now, but it seems FIIs have some different calculator and it is better to be with crowd.

Part book in 6700 CALLs, if NIFTY is resisted around 6630-6635, as mentioned in earlier post it is one of the strong resistance zone.

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

Buy Reliance 900 PUT

Market is going up without any reason. Hope of stable Government and projects kick-off by Modi Government should bring prosperity in India according to FIIs.
So FIIs are buying in huge quantity everyday, and to add to it, yesterday it seems lot of buying even by retail investors who had left-out feeling in this rally! In no scale of imagination 90 point up-side yesterday could be justified. I must admit, I was caught at totally wrong end in this rally and trading account is in dark red!

Traders are neglecting Crimea issue, El-nino effect on monsoon, possibility of adverse election outcome (historically traders got it wrong, there is study published how investors/traders are always under-prepared with plan B of election outcome) and fundamentals of Indian economic situation.

Asian markets were up yesterday and it triggered upward hope rally in NIFTY, today Asian markets are down substantially but NIFTY might find some other reason to continue the rally.
There are several numbers thrown for resistances so far and NIFTY cleared them all in a style, now 6630-6640 must be very strong resistance so in case of eventuality, square-off 6400/6450/6500 CALLs of this month expiry and sell same CALLs of next month expiry.
Yesterday lot of unwinding of 6400/6500 CALLs and it is almost certain that in this month expiry NIFTY will stay above 6500 if not 6450. CALL premium of this month is increasing and PUT premium of next month is very high and also increasing. So traders are unsure for growth in next month and moght be buying PUTs. In view of this analysis selling CALLs of 6600 for next month could be the safest strategy for the moment.

Reliance:
Buy Reliance 900 PUT around 8-9.

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

Update

We entered in last week of the month but still our trading account is far away from becoming green.
"Hope" rally, "NAMO" rally, "pre-election" rally, whatever you name it is still not weakening though lost some strength over past week.
On Friday FIIs bought huge worth more than 4000 cr and DII sold more than 4000 cr, it could be mere roll over effect. Interestingly all those who will vote do not seem to believe in growth theory post election but FIIs are having strong belief about progress of India. This is not good sign and if FIIs start withdrawing as they did only two months ago, one would not find buyers and prices will drop.
As an investor it is good time to exit and book profit wherever possible  or reduce losses in old stocks, take money off the table.

We are not taking any new trade again this week.

One can buy RELIANCE 900 PUT if he/she gets it between 10-12
Buy LT 1180 PUT between 3 and 4
Buy TATASTEEL 370 CALL between 3-4.

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

No new trades

All indices have neglected referendum so far. SGX NIFTY is no exception and presently (Monday March 17 around 7 pm) trading in marginal green.
If NIFTY crosses 6520-6530 tomorrow (and it could be mere formality now) then it will be hoping against hope that NIFTY will close below 6400 by end of this month's expiration.
NAMO, referendum, inflation numbers and expectation of rate cut will be additional factors tomorrow to add spice to already hyped sentiments. So far bears don't stand chance.

Nevertheless, FIIs are selling in future continuously for past four days and must be hedging their bets by buying in cash segment, SGX NIFTY had shown up good run up today morning but bit subdued now, on Friday though NIFTY shown spurt in last one hour, volume was low, in fact the lowest in March. All these factors indicate that NIFTY might struggle in further northward moment if it fails to pass convincingly 6530 on EOD basis. This could be some indications that steam is lost.

There are some possibilities of new trades but since our accounts are in deep red so far this month we will not enter in any new trade and add to the risk.

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

Update

Small correction, could be healthy correction to take NIFTY further northward in next couple of days. Do not even think of shorting anything till NIFTY conclusively closes below 6350. It could be difficult to these levels before this expiry as every trader/broker is convinced about Modiraj and future prosperity in India.

Even today, though NIFTY ended in marginal red, it formed higher top and higher bottom, which is very clear bullish sign.
PCR is around 1.5 and it means more open interest in PE contracts, also reasonably high OI at 6400 PE, suggests strong support near 6400.
Having said this, FIIs are selling in future for past two days though doing heavy buying in cash segment. Some long built up in system and they would liquidate in coming days.

But needless to mention, overall there is very positive sentiment and every fall in NIFTY will be bought for sure, unless there is any very negative news. Macro data. such as IIP, inflation numbers will be out from tomorrow and if those numbers are good one may see further 80-100 point rally and if they are not good market will not react negatively for sure.

Mantra: Just keep watching and tray to save positions, do selective roll over, hopefully everything will attend normalcy by next week and we will get chance to end the trading account in green! As you know option trader needs only one good week in a month!!

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

No new trades for some time now.

Last week was awful. An option writer like us should never even dream such week. Sentiments are still very much positive. Buy on dip seems to be mantra for success.
But one should cautious here before any fresh trade. Buying is risky and selling would be suicidal, hence we will not take any new trade for some time. Try to exit all CALL sell positions at appropriate levels one by one.
Roll over also should be very selective, one can take small risk by selling CALLs of  NIFTY 6600, 6700 of April expiry.

Try to hold everything till euphoria settles.
Market and especially FIIs are undermining  battle for Crimea, not considering possibility of hung parliament in power in May and more importantly completion of FED tapering.
In just 15 trading sessions, NIFTY had covered 550 points and that too at higher end of the range so one should be very careful and stock specific.
Perhaps it is good time to take profit of the table and see for better opportunity to reenter later. This all could see some small correction and close below 6400 by March expiry.

In short, no new trades, try and hold, do selective roll over next week. Patience is the best technique in such difficult times.

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

No new trades till weekend

NIFTY is in no mood of correction.
Hold LT, AXISBANK CALL sell positions.
If NIFTY crosses 6360 tomorrow, we have think about CALL sell positions, perhaps it is better to off-load few lots and reenter later or sell CALLs of next series to maintain credit balance in the trading account.
Technically once election is announced there will not be any new decisions by Government and there should be some profit booking. At least it did not happen today. As per OI table still 6400 is very strong resistance. This is bit unusual and could indicate top is not far ahead from here of this rally.

No new trade for sometime. Better than expected CAD data could give positive opening and would touch resistance zone. We should able to hold position at least till weekend then premium would start decreasing and CALL sell positions could be in better shape to provide profit booking opportunity.    

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

NIFTY and LT

NIFTY bounced back on Putin's decision.
This could have some reminiscence for next one or two days. But this should be last few 50/100 points upside from here. This could even happen due to gap up opening tomorrow. Keep averaging NIFTY CALLs.
By now everything is priced in. Modi factor, War factor, inflation data, interest rates market knows everything. So there might not be big move on either side till next trigger.
Range could be 6140-6435 more preferably 6250-6340.


NIFTY
Sell 6500 April CALLs in range of 70-80.
Sell 6400 March expiry CALLs in the range of 48-55

LT
Sell 1160 CALL between 17-20.
LT is in uptrend. Stock moved up by 15% in last two weeks. But now it would face strong resistance near 1130-1138.

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

IDFC and RELIANCE in cash segement

NIFTY found some reason to correct. It seems 6300 is turning out to be strong resistance.
Hold all NIFTY CALL sell positions.
If NIFTY has to respect technical, then 6140-6160 is good resistance level and even if there could be gap down opening close for the day should be above/around this level

Buy IDFC in some sizable quantity in cash segment. Downside is minimum from current level and if IDFC gets banking license then stock could see high of May 2013.
Alternatively buy OTM 115 CALL. But this could be risky if RBI did not decide soon on licenses and holds the decision till next month.

One can buy RELIANCE in cash segment with two/three years horizon.

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

NIFTY, DLF

NIFTY is going up, strong FII's buying with volume was noticeable in past few trading sessions. This could take NIFTY in north direction for some time. However, it could face strong resistance near 6310-6320.

Based on above possibility, below are some proposed trades.

NIFTY
Sell NIFTY 6400 CALL of March expiration in the range of 43-48
Sell NIFTY 6450 CALL of March expiration in the range of 26-30

Sell NIFTY 6500 CALL of April 24 expiration in the range of 65-68

DLF

Buy DLF 130 PUT around 1.80-2.00
If NIFTY corrects from 6310 level as anticipated, DLF would see stiff fall sub 130 levels.
To cover your cost, sell DLF 120 PUT around 0.60 and two lots of NIFTY 6450 CALLs.


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