June 2019 — We Buy Options — Day 07

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NIFTY closed above 11900.

A gain of 52 points for the day.

Once again people are cheerful without actually making money out of these up moves. The gains are selective. Few big stocks are gainers. There is something different going on in mid cap and small cap world. Stocks like RELINFRA, RELCAPITAL, PCJ are losing 8-10% on daily basis for last 4-5 days. They do not count towards the index so no one cares except the people who bought these stocks or who created long positions thinking that having fallen so much, these stocks may reverse now. Nothing of the sort happened and traders are licking their wounds while NIFTY moves up.

This is normal. This is how the market works most of the time.

For us it was just another day.

Pharma stocks moved higher after going down earlier in the day. BIOCON, SUNPHARMA and DRREDDY trades lost value as the stock prices moved higher.

On the other hand IDEA, TATAMOTORS and ZEEL did little bit better than the previous day.

All these gains and losses balanced each other and we remain almost where we were on Friday.

Not bad considering the fact that we are holding 7 PUTS and market was up 52 points.

Position at close yesterday.

SGX NIFTY and Asia Markets are positive today. We may see some up moves initially.

Let us just stay with these trades and do not take any more trades today.

Be watchful with the current positions.

One of the readers has sent this link about IBULHSGFIN :

https://economictimes.indiatimes.com/industry/banking/finance/plea-in-supreme-court-for-action-against-indiabulls-housing-for-misappropriating-98k-cr-public-money/articleshow/69728568.cms

Let us see if this has any impact.

As far as we are concerned, the stock does not meet our 30 day weakness criteria but it is weak over 7 days.

Sometime a news based trade works out but I would not suggest it here.

Trade cautiously, trade profitably.

Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.

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