For last few days we were seeing an uptrend. That uptrend continued today. NIFTY made the new ALL TIME HIGH. Only it was not done with a bang. It fizzled out as soon as it was achieved. The previous high was 11760.2. The new high was made at 11761.
For this new high at just 0.8 points away from the previous one, some people jumped into early celebrations.
Before we could assess the positions at the new high, NIFTY started moving lower and did it with more determination than the up move.
Now the same experts had another task. How to eat their own words written few hours ago and explain this down move.
They came up with new words of wisdom– Market is cautious of Monetary Policy on Thursday. As lame a reason as any. Market was aware of the MPC meeting at the moment of making new high. Nothing changed with respect to that meeting. why not be cautious at 12:00 hrs instead of becoming cautious and fearful at 14:00 and resort to aggressive selling.
The moves of the day prove that most of the experts can not find their a..hole if a mirror on a stick was given to them.
Market finally closed the day at 11643.95 more than 100 points down from the high of the day.
Some experts talked about monsoon forecast and El Nino effect. Why El Nino should affect ZEEL is beyond anybody’s comprehension.
Well, if tomorrow the market regains the ground lost today, the same monsoon forecast and MPC will be the reasons for the gain, explained by the same experts.
Silly Season in the market. Not now, not today, it is an all time comedy show if you look for the humor.
Our Trades :
Again, the trade in EICHERMOT PUT 19500 could not be taken. The stock opened lower and our price was not seen at all. So we stay in the same trades.
INDUSINDBK made a very smart up move in the first half of the day and went up to Rs. 1818. The entire gains were lost in the last one hour and it finally closed in the negative. This was the story of many stocks but did not give us much. Our losing position became a little better than it was a day before.
A long way to go till April 25. We stay with these trades.
New Trades for the Day :
We have seen that it just takes one or two hours for the trend to change and it happens without any indication. Two hoots for the charts and the indicators. We take our chances with whatever method we have.
ZEEL has been suggested by many readers as a PUT candidate in various comments. It looks like a good trade. Only problem is very high Implied Volatility at 61-64 range and hence high premiums.
But high volatility has advantages too if the price move happens in our direction.
We take a trade around 10% away from the current price. That will be PUT 360.
ZEEL PUT 360 @ Rs. 7.50-8.00 is high priced but can work out. Lot size is 1300, Maximum Risk Rs. 10400.
FMCG sector stocks are not doing well. We have seen HINUNILEVER and DABUR stock prices coming down. HINDUNILEVER has very low volatility for deciding about a trade and DABUR has very low volumes.
We look towards BRITANNIA. The stock meets the 30 day and 7 day criteria for buying a PUT. IV at around 31 is fine. The volumes are a concern but we go with the trade.
Current Price is Rs. 2988.
Preferred trade would have been at 2850 Strike which had just 4 contracts yesterday. So we go for BRITANNIA PUT 2900 @ Rs. 42-45.
Lot Size is 200. Maximum risk — Rs. 9000.
Trade profitably, trade cautiously.
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.
vishal agarwal April 4, 2019 at 8:48 am
Nice humor sir. I am surprised that you suggest short on FMCG sector. Not that it is not weak but FMCG is not that volatile and does not fall too much. Most of the times you have suggested call on FMCG stocks like HUL.Reply
vishal agarwal April 4, 2019 at 8:58 am
The moneycontrol article itself mentions that its a liquidity driven rally and we all know what happens to these rallies. Liquidity can change course anytime without notice. The article also gives lot of stocks that rallied the most. None of them is a good bluechip heavy weight stock.Reply
arnab April 4, 2019 at 2:11 pm
This market is turning me paranoid. Thinking hard to return back to equity, atleast don’t have to deal with crazy time decay thing.Reply
admin April 4, 2019 at 2:15 pm
Can’t bear the heat. Then do not enter the kitchen. This age old saying applies to stock market trading specially options trading.
the current volatility is not even a fraction of what it was in year 2008.
arnab April 4, 2019 at 2:49 pm
Main thing at the end of day is whether +ve/-ve and how much, whether you do options/bonds/equity/index/mutual funds or whatever. If that comes with no heat, I am absolutely for it. 🙂Reply
vishal agarwal April 4, 2019 at 4:08 pm
Typical of Eicher Motors. +/-500 points movements intraday. For the day the reversal reduced the profit in 20000PE considerably.Reply
vishal agarwal April 4, 2019 at 4:43 pm
Sir RelCapital is weak 30days and 7 days. put 170 is a probable trade.Reply
vishal agarwal April 4, 2019 at 8:06 pm
Tcs and Infy to declare quarterly results on 12AprReply
MR April 5, 2019 at 8:53 am
Infy before results.. put..
TCS after results after one day callReply