Welcome to Monday morning.

This week we have four days of trading with a holiday tomorrow. We begin the day with this position.

We are holding 3 trades in financials ( PNB, L&TFH and LICHSGFIN), 2 in Pharma ( SUNPHARMA and BIOCON) and 1 each in IT and Realty.

Financials are week but loading too much into one sector is never a very good option.

We stay with all the above trades for the day while looking for another trade.

New Trade:

NIFTY is up 3.49% over 30 days. TATASTEEL is up 0.09% over the same period. I would have liked it to be negative but we are looking at performance as compared to Nifty.

It is weak over 30 days. It is also weak over 7 days.

That makes it a candidate for buying a PUT.

Closing price on Friday was Rs. 333.10 which is not too far away from the recent 52 week low of Rs. 322.20 in August 2019. A little downward push can take it below that level.

The Implied Volatility at 49 is high and meets our requirement.

We look for TATASTEEL PUT 310 @ Rs. 8.00-8.50 .

Lot size is 1061, maximum risk is capped at Rs. 9019.

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.