NIFTY again closed at a new all time high.
The leading sector was PSU Banks and ICICI Banks. The move in ICICI BANK proved once again the market contradiction — with bad results stock prices go up specially in banking stocks. This happened once again today. We had seen ASHOK LEYLAND go down on the news of good results. That is market for us.
A trader does not complain. One has to live with the fact that market may be irrational but it is real. The loss caused by a wrong trade is real. The pain of the loss is real. We live with the reality of this all and learn to take good with the bad.
Over last two days, we have been into 4 trades ( 2 each for PUTS and CALLS ).
Here is how the scene looks :
PUT BUYER :
Both the trades are losing at present.
Quite normal as the market has been moving higher. We stay in the trades.
CALL BUYER :
Two trades. One right, one wrong.
I had suggested YESBANK CALL 400 at a higher price but I had entered the trade at Rs. 4.60. For the purpose of record that price is considered.
We stay in both the trades.
New Trades for the Day 03 :
Looking for weakness in a market showing strength is not easy task.
Some of the readers have suggested TECHM and INDIGO as the likely PUT candidates.
TECHM is weak over 30 day period. Over last 7 day period it does not indicate weakness. That does not mean it can not go down, but we should not be in a hurry to take a decision till the trend is clearly seen.
INDIGO is near to 52 week low. Shows weakness in the last 7 days as well. The results are poor. Implied Volatility is very high and the Options are priced too high. My heart says to go for it. My head says– Do not pay such a high premium. And we have seen that even with poor results it is not sure that stock price will go down.
For today, I listen to what my head says and do not enter into a PUT trade.
And same for the CALL trade.
Let us not take any trades today and just stay with what we already have.
Not trading is also a decision which needs to be taken sometime. We may miss some profit by not trading, but we surely avoid a loss also.
Stay cautious, 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.
Comments
Anam July 31, 2018 at 10:43 am
Sir ,
ReplyI took the INDIGO 900 PE trade yesterday @ 23 as i was not ready to shell money for INDIGO 950 PE. Markets really blessed me . Today morning , i closed the trade @ 55.50 . I will wait and enter the INDIGO 850 PE later . This was my first selection based on the lessons taught by you. I really owe this profit to you and the market . Thank you sir.Keep your good work going .
Abhinav July 31, 2018 at 11:40 am
Sir,
Too many pharma stocks in today’s gainers list, Sun Pharma, Cipla, Dr Reddy, Lupin. Could be considered as ideas for call list, although DrReddy is currently in put list.
ReplySaket July 31, 2018 at 12:07 pm
Lupin and Dr Reddy still look weak. Other two we should watch for a while before taking any call.
ReplyCven July 31, 2018 at 11:13 pm
Dear All,
ReplyWhy the Yes bank call is going down.
Girish August 5, 2018 at 11:57 am
Hello Sir,
ReplyI have a question. How do we decide if the premium we are paying is high or low?