NIFTY and TCS

After reasonably good last month, let us start new series with caution ahead of budget.
Personally, I don't expect too much upside movement from here unless there is any surprising announcement by Government.
Everything seems to be factored in by now. Monsoon is still not active. Iraq issue is worsening. Russia and Putin are still not sitting quiet. Commodity prices going up, Rupee again started depreciating. Rail rate hike and subsequent roll back is not taken seriously so far by investors and was supported by good media management by NAMO Government. But somewhere it would stop soon.

So as per present view NIFTY will not cross 8000 and will not go below 7100.

Short strangle:
Sell 8000 CALL around 18-20 and sell 7100 PUT between 18-20. Delta is near zero and today it seems to be very safe strategy.
Due to budget there could be some risk involved but it is reasonably low.

NIFTY movement more than 10 % seems impossible and if it happens we will publish delta values and adjust trades accordingly.
Those who want to stay very safe can enter such delta trade after budget announcement.

TCS:

You will notice TCS has good support in the range of 2250.

Sell 2250 PUT around 30.
Hold the trade till it reaches target around 17-18 or till stock goes below 2250 in cash.

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

Trade in NIFTY and RELINFRA if you don't want to sit idle today.

On expiry day, just sit back relax, don't trade.
There could be lot of volatility after 1 pm.
As per our count, 5th wave is started and characteristic of completion of 5th wave is sharp fall. Can it happen today?
Possible.
How to do trade with very low risk?

Buy 7550 PUT around 12-14.
If there is sharp fall after 1 pm one would able to make good profit by risking just Rs.600-700 today.
Risk reward ratio will be really good.

RELINFRA:

It is also due for a fall if NIFTY corrects. It stopped around 38% retracement from last fall around 745-746 and good sign of reversal till 700.

Buy 720 PUT around 1-1.50/-. Mere Rs. 500-600 investment could provide good profit potential.

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

Buy 7500 PUT around Rs.9/- and buy 7700 CALL around Rs. 5/-

NIFTY as expected bounced back from 7440 levels and respected EW rule.
So it this is true 5th wave started and end of 5th wave usually should follow with sharp correction. If one sees such a sharp correction then only down trend will began otherwise rally could continue after consolidation in 7520-7600 region.

NIFTY 8000 CALL sell contract:
Those who have not booked profit earlier can hold till NIFTY crosses 7800 in spot.

Yesterday though NIFTY went up by 90 pints volumes were reasonably low. Today it could pick up bit momentum if short covering continues.
This sentiment based rally is not stopping anywhere.
NIFTY went up because investors thought after railway rate hike, Government is taking tough decision.Had this rate hike would have done by Congress led Government, perhaps market would have fallen in anticipation of inflation.
A systematic propaganda on social media sites, boost sentiments and NIFTY is going up. So investors should stay away. FIIs flow has also reduced in past week.
NIFTY will struggle to cross 7650 before expiry.

Risk takers can buy 7500 PUT, it is very cheap, trading around Rs.9/- and buy 7700 CALL around Rs. 5/-
Total investment will be around Rs.700-800, but if NIFTY takes some directional move on expiration day one could gain handsome profit.

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

RELINFRA Buy 690 PUT

Oil has again came within channel after brief upward movement today.

                           

NIFTY took support at 7440-7445 level as expected. Can it bounce back and give 100 points move from here respecting usual trend or will go down?

Nobody knows.

There is high probability trade in RELINFRA.
Stock turned down, gave breakout with volume. Something seems to be wrong in the stock. If this is true then stock will reside at 680 within couple of days.
Buy 690 PUT around 5-6. Investment is just 2500-3000/- , take the trade if your profit in this month permits you to take the trade.

 

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

Sell 8000 NIFTY CALL of July expiration around 40/-

Oil is going up, broke the channel today and NIFTY might respond.

NIFTY too broke channel briefly on Friday.
Markets discount all events in advance.
How far it could go further down?
In chart, you will notice strong support in the region of 7440-7400 and at higher side 7700-7800 is good resistance.

How to trade this view?
Sell 8000 CALL of July expiration around 35-40.
But don't forget to book profit quickly as there could be still possibility of pre-budget rally and which could take NIFTY beyond 8000 by July 10.
One can safely hold this CALL till NIFTY goes above 7800, which is still 300 points away.


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

NIFTY will move in other direction of oil movement today.

Oil briefly broke channel on lower side yesterday and SGX NIFTY and other indices responded accordingly. But since then it again went in to the channel and may decide its further course of action today.
As yesterday, if it goes above the channel then NIFTY will fall and it breaks channel at lower end then it NIFTY will continue its up move.
By and large general trend is still up.

In absence of any new trigger, trades will be eyeing only at oil for trading bets.
FIIs sold in cash after long time but lot of buying in options by them, (perhaps) in anticipation of lot of movement during last expiry week.

No new trades.

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

Pre-market analysis. Risk takers can buy 7600 NIFTY CALL @ 50

Oil will be the driving factor today.
Oil is trading near lower end of the channel and SGX NIFTY is up. One can see gap up opening in NIFTY. Day will be governed by tensions in Iraq. Though it is said our oil import dependence on Iraq is only 5% and we can sustain till oil price crosses $ 120, sentiments are playing role.

NIFTY is in strong up-move. Every low level is bought.
FIIs were net buyers even yesterday.
No one is in mood to account for rising inflation. There are lot of pages in news papers about onion prices. Low monsoon so far and expected lower monsoon henceforth this year.
If NIFTY sustains above 7520, it well see 7600 today itself, if oil permits!
No new trade today.
But risk takers can buy 7600 NIFTY CALL around 50-52 and book profit quickly.

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

Book profit in all trades suggested so far and follow oil price to judge market movement.

For June 19, 2014

One should have booked profit in all Option contracts suggested so far.

NIFTY
You will notice NIFTY will be around lower channel support around 7515-7520 and could bounce back, if Iraq issue dilutes and FOMC outcome is not surprising tonight. If it goes below 7505 one can see further dip of 40-50 points quickly. Level 7480-7470 also to be watched, it had not broken in recent past.

One should have booked profit in all NIFTY CALL and PUT options today.

DLF
It is again approaching support 202-200.
Book profit in 170 PUT

RELINFRA
Fallen from top and provided profit booking opportunity.
Those who had missed it still can hold and book profit tomorrow or day after tomorrow. It is highly unlikely stock will cross 860 before expiry this month.

TATAMOTORS
It was suggested to book profit yesterday. Those who have not done so, could do it tomorrow.

OIL
Keep an eye on oil price. Everything depends on whether oil breaks 105.70 or crosses 107 tomorrow. Lot of sentiments are revolving around oil.
In former case NIFTY will again go near 7625 tomorrow and in later case it will dip towards 7450. Pure sentiments will be backed by some profit booking,

If oil goes up NIFTY will go down and vice versa.
Let us not take any new trade tomorrow.

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

Book profit in stock options and keep an eye on NIFTY

NIFTY
NIFTY took support and went up for no real reason today. Now one has to watch earlier 7570-7580 level. As long as it stays above this level, one can see further heights.
Todays move was not expected by many. If this trend continues tomorrow NIFTY will go near 7900 before expiry.
If NIFTY crosses 7720 tomorrow, exit 7800 CALL at marginal loss and Sell 7900 CALL for this month expiry.

NIFTY today continued trend of deceiving bears. It happened time and again from first week of March. So be very careful. It comes down by 4/5% and covers everything within a day. Bears are trapped.


RELINFRA
Hold.
This is a beauty of OTM CALL sell game.
As expected RELINFRA went up by about RS. 40 after crossing 727 mentioned yesterday, but 860 CALL is trading around same level.

 

TATAMOTORS

Hold, nothing changed so far, or keep booking profits as premium goes down.
Both trades of TATAMOTORS are in profit and one can book profit.
It is better to add RELINFRA 860 CALL by exiting TATAMOTORS.

DLF
Book profit in 170 PUT.

We sold at 1.20 and now trading around .40. Handsome profit of Rs. 1600/- in couple of days.

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

Book profit in all trades suggested so far and follow oil price to judge market movement.

For June 19, 2014

One should have booked profit in all Option contracts suggested so far.

NIFTY
You will notice NIFTY will be around lower channel support around 7515-7520 and could bounce back, if Iraq issue dilutes and FOMC outcome is not surprising tonight. If it goes below 7505 one can see further dip of 40-50 points quickly. Level 7480-7470 also to be watched, it had not broken in recent past.

One should have booked profit in all NIFTY CALL and PUT options today.

DLF
It is again approaching support 202-200.
Book profit in 170 PUT

RELINFRA
Fallen from top and provided profit booking opportunity.
Those who had missed it still can hold and book profit tomorrow or day after tomorrow. It is highly unlikely stock will cross 860 before expiry this month.

TATAMOTORS
It was suggested to book profit yesterday. Those who have not done so, could do it tomorrow.

OIL
Keep an eye on oil price. Everything depends on whether oil breaks 105.70 or crosses 107 tomorrow. Lot of sentiments are revolving around oil.
In former case NIFTY will again go near 7625 tomorrow and in later case it will dip towards 7450. Pure sentiments will be backed by some profit booking,

If oil goes up NIFTY will go down and vice versa.
Let us not take any new trade tomorrow.

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

Update

Book profit in DLF
As expected it went up from support.

RELINFRA
Hold, it broke the channel at lower end but gave hammer candle stick before day end.
It might see some upside tomorrow if 757 is crossed in spot. Risk takers can buy future.
CALL option 860 is trading near 5/-, one can hold till stock crosses 808 on EOD basis.

TATAMOTORS:
 
Hold both contracts. viz 400 PUT and 500 CALL sell.
If only one CALL sold then book profit.

NIFTY
Premiums gone down today, one should find opportunity to book profit in this trade tomorrow. FIIs are net buyers. Last three occasions in last one months bears were trapped by similar NIFTY behavior. Be careful and keep booking small profits also in NIFTY options.
Delta is around 3 and one can comfortably hold till it goes above 30.

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

RELINFRA

In addition to recommendations yesterday, one can think of RELINFRA option contract.

Stock in general in uptrend but now touching support line.

See chart below.

There are only two possibilities. Either it will bounce back to 840 level or will break lower support of channel!!

What it will do next week? Nobody knows, but as a safe strategy one can sell 860 CALL between 4-5.

Stock is trading near 735. It will be difficult for stock to again cross all time high and break upper channel resistance.

Sell RELINFRA 860 CALL between 4-5, your account will be credited by 2000-2500 with an investment of about Rs. 50,000 as margin money.

There is 85% chance that with present volatility stock will not cross 860 before expiry this month.

See MACD cross over.

Open interest very low in 860 CALL compared to 850 CALL.

According to OI, stock may fluctuate between 700-850.

So overall, this seems to be very safe strategy, risk reward ratio is very good, earning will be more than 4 times of bank FDs. This trade befits in to our blogs general objective of  finding low risk strategies.

We will update about all these strategies throughout the week.

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

 

Some very safe option strategies for June 2014

NIFTY has shown some correction back of Iran news, it could be simple profit booking. But it was good for our delta/strangle strategy as delta is around 12 now.
So hold the strategy mentioned in earlier posts.

The main objective of this blog is to find safe strategies.

1.) NIFTY

In bull market every lower level will be bought and NIFTY should not go below 7445, if it has to respect EW theory.
As per EW theory cardinal rules, wave 4 should not enter in territory of wave 1 and wave 3 should not be the shortest.
Kindly see attached chart, assuming numbering is one of the most appropriate one, then NIFTY spot should not go below 7445-7440 and show reasonable rise before further crack towards 7200.

How to trade this view?
If you could sell 7800 CALL of June expiry around 15-20. it will be one of the safest option. Premiums will go down after Thursday and even if NIFTY crosses 7700 next week, trader need not worry much.
Sell 7300 PUT option around 15-20.
Delta will be around 2% and will be reasonably safe.

As per OI also NIFTY should close between 7800 and 7300 on June 26.

2.) TATAMOTORS
More safe options will be TATAMOTORS option, but it will require margin money around Rs. 100000, if both contracts to be executed.
One can enter in only one contract.
It is trading around 435.
Very strong support around 405-410 and it will be difficult for TATAMOTORS to reach 500 before expiry this month, unless some mega news which I am not aware of.

To trade this view;
Sell TATAMOTORS 500 CALL around 1.25 and sell 400 PUT around 1.2
Rs. 100,000 investment for 12 days would fetch Rs. 2000/- (after accounting for brokerage and other expenses), which is four to five times more than normal bank FD interest.

3.) DLF
DLF has corrected a lot, it has very strong support in the region of 198-202 and it should give some technical bounce before further drop. See chart attached.

Sell DLF 170 PUT around Rs. 1/-
One can easily earn Rs. 2000/- by investing Rs. 50,000/- in margin money.

These all are reasonably safe strategies and there is more than 90% chance that on total investment of Rs. 250.000 for 12 days one can earn more than Rs. 6000/- in these three strategies.
Risk reward ratio is very good.


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

Update

Nothing changed today.
Very good macro data will take NIFTY 60/70 point higher immediately. SGX NIFTY is already up by 25 points. NIFTY could till touch 7800 as thought yesterday.

If NIFTY goes near 7725 based on IIP and CIP data, 7850 CALL will be around 75-80.
Sell 7850 CALL.
Exit 7300 PUT sell contract tomorrow, book profit.
Hold 7700 CALL. even if it is above 100.

Crude is going up. Monsoon is delayed, interest rate reduction seems impossible in near future, budget is till three weeks away and hence there is high likelihood, after today's macro data since there is no more trigger this month, NIFTY might close below 7700 or even 7600.

Risk takers can average 7700 CALL options to maximize profit.

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

Wolfe wave theory and low risk strategy

NIFTY is still in positive trend. It had again respected 7590 level today and there was strong buying during end of the session.
It did not hold above 7700 too. But it seems just a matter of time. Hold strangle strategy till it closes above 7700 on EOD basis and if it crosses 7700-7705 around 3.25 pm then follow the step as advised yesterday. If it doesn't just hold.

Change in open interest of 7700 CALL was above 870,000, among highest open interest, so one can hold for a day and wait if NIFTY closes above this range conclusively tomorrow. It is possible though, because FIIs are buying and in no mood of profit booking.
One of the reason could be FIIs have not made lot of money in this rally and now they have to average their earlier investments. Because when FIIs started investing, Rupee was between 64-68 and not had corrected more than 5%, so NIFTY has to gain more than 7 to 8% for them to be profitable accounting for tax component. So it is in FIIs interest to buy in stocks and hedge the bets by derivative strategies. This is leading NIFTY movement in northward direction in spite of not very positive cues on domestic (in fact monsoon worries which are beyond scope of control of NAMO) and international front.

Till the time of writhing this blog, all global indices are in red but SGX NIFTY is trading in green. This will reflect in our NIFTY tomorrow. There could be about 100/120 points upside from here and it could be more if macro data published tomorrow is encouraging.

Yesterday NIFTY shown hanging man pattern, technically it was invalidated as it broke yesterday's high and made fresh high. NIFTY is again in uncharted territory and as mentioned it could go higher if 7589-7590 is not broken.

However, NIFTY is trading at very high levels and no domestic investors are in mindset of huge investment. Any black spot in macro data, or confirmed negative news on monsoon could activate Wolfe wave pattern. It can still go to 7820.
What if it does not cross 7820?
It could see drop till 7100.

How to play this pattern with very low risk?
A safe way to do this as follows. Please ensure NIFTY goes below today's close 7602 before entering in to this strategy.
Buy 7500 PUT around 43 and Sell 7300 PUT around 23;
Maximum loss could be Rs. 1000/- but if NIFTY closes below 7300 maximum profit will be 9000/-, BE point 7480.

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

Update on our strategy

No change so far.
There could be high probability of pre- budget rally till 7900/8000 if NIFTY crosses 7690 tomorrow. It showed hanging man pattern, it could be bearish only if there is follow up action tomorrow.
In general, it looks like NIFTY will not respect bearish signals, on the contrary, today small dip was bought in to.

NIFTY is not breaching two days low ie 7579-7580.
First sign of weakness could be intra-day NIFTY spot below 7575.
Be cautious in any bearish position if NIFTY goes above 7690 tomorrow. Premiums are very low, 7800 CALL and 7500 PUT are near 40 and 30 respectively, IVs are low. So there is possibility that NIFTY will move sideways for next 12 days till expiry.

Adjust our strategy if NIFTY goes above 7690.
Book profit in 7300 PUT and exit around 5-6.

Keeping view of sideways market till expiry, one can sell 7900 CALL of this month expiry and 7400 PUT of this month expiry in equal quantity. Delta will be around 5.
For time being hold 7700 CALL, today there is high open interest, and 109 600 contracts added. Hence we will decide about it on Thursday. There is high possibility that NIFTY up-move will be capped before expiry near 7700.

It is very surprising, bulls are not factoring weak monsoon predictions and think everything will be fine with Modi Government without monsoon. It is clearly over optimism and one can buy cheap PUT such as 6900 PUT for next month expiry. I don't expect market to go near 6900 next month but risk reward ratio will be very high, if it happens.

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

Hold 7700 CALL and 7300 PUT till NIFTY crosses 7690 on EOD basis.

Now we hold 7700 CALL and 7300 PUT and delta is around 38, it has already crossed the threshold limit of 30%.
Trading account till today is in marginal negative.
However, we are holding the strategy and will see if close tomorrow is below 7689-7690.
All indicators are over bought and after such a unexpected run-up market might move sideways if not turns down.

If NIFTY closes above 7690 or above this level by 3.25 PM, close 7700 CALL and replace by 7800 CALL.Book profit in 7300 PUT contract and sell 7400 PUT. Adjust delta near 15% at least.

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

Just hold till 7500

Hold the strategy.
If delta goes above 35, that means NIFTY have to cross 7500, then take steps as directed in blog yesterday. If NIFTY crosses 7465 tomorrow it will be fist indication of bullishness. Be prepared to take further action.

Till then hold everything.
If market behaves normal tomorrow, exit 6900 PUT around 5-6.

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

Continuation of NAMO Jap

After 4/5 days of consolidation big move in anticipation of good credit policy and revamp by Modi in ministerial groups.
NIFTY may cross 7500 tomorrow, if that happens we have to adjust our strangle due to unfavorable delta then.
If NIFTY crosses 7500, our 7600 CALL will be around 75 and 6900 PUT will be around 4/-
Delat will be around 37-38.
Exit this strategy, meaning book profit in 6900 PUT and book loss in 7600 CALL, total loss per strategy will be around Rs. 40/-
Immediately set up another short strangle.
Sell 7700 CALL around 41-42 and Sell 7200 PUT around 33.
This should able to maintain credit balance in account of about Rs. 35-40 per strategy and delta below 12%.

But take action only if NIFTY crosses 7500-7520 after policy announcement.
Maybe NIFTY will correct after policy announcement, because Government soon has to take tough decisions to curb inflation, improvement in BOP. Market may react to that. Though huge drop is not expected it could again come to 7200 levels within couple of days or before weekend. So wait for confirmation before making any changes in the strangle.Otherwise, if it comes near 7200 we again have to adjust strangle.

There is fair chance that NIFTY might not cross 7560 high made on election day before this expiry.


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

Short stangle

Technically strategy is called short strangle and not short straddle.
But for our strategy, it does not make any difference.
Presently combined delta is near zero and it will not enter in danger zone unless it crosses 7450 on upper side and 7000 on lower side.
This is nearly 200/225 range on either side and with present volatility it should take some time to cross this boundary, even if it does.

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