Sell NIFTY CALLs

Today was an unusual trading day. Market did not react to rate hike by FED! All market pundits are now stating 25 to 50 bps rate hike by FED was anticipated or was known to everybody and hence all markets in world have gone up. This does not gel. In all previous local and global such experiences/events, at least there was a strong knee-jerk reaction. What was different this time? Wasn't this a mega event? So I think real reaction is yet to come. And now it will come slowly but decisively.
Also 7850-7874 is another wall and supply zone. All indicators are in overbought zone, so either there will be time correction or price correction, before NIFTY moves upward again.

So our strategy should be:
Sell NIFTY 2 lots  7600 CALLs around 260-270.
Sell NIFTY 2 lots  7800 CALLs around 105-115.

Stop loss should be Rs. 10000/- for each contract.

FIIs bought huge in cash segment today after lot of gap and DIIs were net sellers. This is not good signal for bears. If this continues tomorrow we have to exit soon.

One should try and hold these positions for couple of days. Because rate hike implications will be evaluated by all traders rationally by then. For a layman, rate hike by FED will make dollar dearer, it means for us Rupee will depreciate further. It could cross 70 soon. Inflation would go up as India is net importer. Falling oil prices might not be too beneficial because drop in oil price will be compensated by falling Rupee. So in broad term I see some negativity and it should reflect in NIFTY during next week.

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

Trades before FED decision

NIFTY is in uptrend.
But uptrend on weak volumes. Today, FIIs were net sellers again in cash segment. NIFTY heavyweights are going up. Bank Nifty is not so much supportive so far.
Last 15 days FIIs are booking profits/exiting and DIIs are buying equally huge quantities. This seems to me bit risky for present NIFTY uptrend based on the history. Generally NIFTY followed FIIs or vice versa.

What is the best trade under these circumstances?
Those who want to risk Rs. 18000/-, the best strategy would be to buy 16600 PUT of Bank NIFTY around 300 and buy 16600 CALL of Bank Nifty around 300/-
Maximum loss will be Rs 18000/- but would have unlimited profit potential based on volatile market ahead.

Bank Nifty could go to 14600 in short time after FED rate hike, unpromising Parliamentary session and has potential to fetch hefty profit.
Another cost effective trading option is in NIFTY. 7400 PUT is being traded around 16. Buy it. Even if one invests Rs. 4500-5000, there is possibility of huge profit.

In short, chose one of the following trades:
Straddle in BN: Buy 16600 PUT and CALL of Bank NIFTY both around 300/-
Buy 7400 NIFTY PUTs (4 los) around 16-17.

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

Few trades: Only for Wednesday

NIFTY should show some resistance at 7715-7725 levels, this was earlier support, which could now act as a resistance. Once it is crossed, next halt will be 7760 and till then one should able to make money in below contracts.

It seems markets have already aligned with rate hike by FED. Or this could be last chance for traders to cover their shorts. Picture will be very clear by Friday.
Do not carry any position for next day for the time-being.

But one can do day trading.
1.) Sell Axisbank 420 PUT around 6
2.) Sell TATAMOTORS 360 PUT around 4.50-5.00.
To cover the risk
3.) Sell DLF 120 CALL around 1.20.

Exit all trades if total profit is more than Rs. 5000/- and if loss is more than Rs. 4000/-
Be alert tomorrow.
The implied volatility could go up anytime during the day and even if there is not much movement in stock price, option could be dearer by couple of percentages.

If you find this risky, then simply take rest and enjoy the day!

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

Buy OTM PUT of LT, preferably 1200 PUT

Market is moving southwards.
Maybe some recovery could be seen in beginning of the week but overall trend is down.
LT is very weak.
Buy 1200 PUT between 5-6. Mere Rs. 1600-1800 investment could bring mega bugs.
This could turn out to be a lottery trade!

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

Bearspread strategy in NIFTY

We closed all our positions.

Booked profit earlier in NIFTY option contracts.

DishTV strategy: Booked profit
TataMotors+SBI+ BN: Booked profit
TCS: Booked loss


Decided not to take any new position immediately.
Global cues are negative. FIIs are selling. Now 7712 will act as a resistance. If NIFTY goes below 7500, no GST/fruitful parliament sessions/rate hike would take NIFTY to 7200 quickly.

Bearspread strategy in NIFTY:
But one should forget this after entry in to the trade.

Buy two lots of 7400 PUTs and sell 2 lots of 7200 PUT.
Total risk would be around 3500/- but profit potential will be more than Rs. 23000/-. Even if there is 10% probability that NIFTY will close below 7360 (Break-even point) it is worth taking this trade.


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

No new trades on Monday!

What is priced in in current NIFTY fall? Rate hike by FED or GST?

If rate hike worries are already discounted by market then clearly GST news will push the market to higher levels on Monday. Also good global cues would definitely see at least gap up opening.

As a trader what is most important for NIFTY is level 7845-7860.

Maybe 7845-7860 would provide good selling opportunity again with strict SL.

Some of the stocks would benefit due to GST One of them is surely DishTV and another SBI

In my view DishTV would benefit due to uniform tax regimen across the country and the most widely used network will able to increase profit margin due to GST.
Also all unorganised operators (cable TV operators) in small cities have to pay equal tax as that of DishTV and there will be level playing field for all DTH operators.
DishTV will score more marks here.
One can buy DishTV in cash with one year view with SL 94.

SBI: If GST to be collected one of the chanel will be SBI. Investors will like it and stock would easily touch 250 in very short time.

On Monday we will not take new trades, But will try and exit DishTV and SBI at profit or at cost.

New trades will be taken after analysis on Tuesday.
Disclaimer: This blog does not take any responsibility of your profit/loss.

Further Update

NIFTY broke support. FIIs sold again in cash.
If NIFTY stays below 7870 then further downside is possible.
Hold all bear positions.

Update:
Dr. Reddys 3300 CALL contract:
Book profit.

DishTV strategy:
We are holding this strategy.

BN+ TATAMOTORS+ SBI strategy:
Book profit in TATAMOTORS CALL and cover the cost of the strategy. Then book profit in SBI 245 PUT.


No new strategy tomorrow. If FED hikes rate, lower levels are possible. So hold our strategies but secure profit as advised.

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

Update

NIFTY is consolidating and showing all signs of up move any time but it is not happening for long. Today even FIIs were net buyers in cash after 13-14 trading session though net buying is very small. NIFTY is bouncing time and again from trend-line supports. Tomorrow (Thursday) trendline support is around 7908-7913.

So far for us except Dr. Reddys all trades are working fine.

1. Dr Reddys has given dead cat bounce but if it goes above 3330, better to exit the trade. Alternatively keep stop loss of Rs. 5k-6k which is around 112-115 for 3300 CALL contract.
2. Continue trade in DishTV strategy, 
3. Continue SBIN, TATAMOTORS and BN combined trade strategy. 

No new trades.

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

New trading strategy for rest of the week

After RBI policy Bank NIFTY might not do well for some time. It is already in overbought region.
Traders are aligning trades hoping GST would get through the Loksabha and NIFTY would cross 8200. If that does not happen Bank NIFTY would go down to 16000 again.

We book profit in NIFTY PUT sell contract and entered DishTV bear spread.

New trade:
Buy SBI 245 PUT @ around Rs. 5/-
Buy BN 18100 CALL @ around 130-140
So total outgo will be around 14000-15000/-

To recover this sell TATAMOTORS 430 CALL.

In short
Buy SBI 245 PUT @ around Rs. 5/-
Buy BankNifty 18100 CALL @ around 130-140
Sell TATAMOTORS 430 CALL around 10/-

Wait before you enter in to trades during early morning hours. Maybe market would open gap up and prices are not at all in the trading range. Around 8025 is very crucial resistance for NIFTY. It is about 50% of last fall till 7714-7715. So NIFTY might show urgency to concur 8025. Ideally one should enter trades near to 8025 for better returns and low risk.

Also with this trade and other earlier active trades remember Rs. 30000/- SL.
If anytime we come across this magic number, we will stop trading for the month!

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