One day up, another day down.
Markets make merry and we make nothing. This is the story of last 3 days.
Yesterday was a day full of contradictions. On the day NIFTY fell 50 points, we did better in CALLS. PUTS did not do well.
GAIL was the best performer of the day as it ended 3.61% higher. It was top gainer among NIFTY stocks. Made a new 52 week high at Rs. 399.40. The increase in the value of CALL 400 brought down the loss for CALL BUYER considerably. Today we look for this CALL to get In The Money.
The position for CALL BUYER :
Some relief. We expect things to get better from here.
For the PUTS it was a strange day.
With NIFTY down 50 points, we should have done better. BIOCON, TATAMOTORS, TATAGLOBAL, HEROMOTOCO and DRREDDY ended up as gainers for the day. Strange but true. All these PUTS lost out.
RELCAPITAL and HINDALCO moved lower but the PUTS did not gain much.
Only IDEA did something good for us.
The position of the PUT BUYER :
We need few more IDEAs.
New Trade for the Day :
It is tough to take new trades when the previous trades are not doing well. It is a matter of conviction. Nothing risked is nothing gained. We still have 9 days of trading left including today.
Hindustan Petroleum ( HINDPETRO ) is likely to open higher as the Crude Price went lower overnight in US markets. But the stock has been very weak in the last 5 trading sessions. The last traded price for PUT 260 was Rs. 6.20.
With stock likely to open higher, I would go for PUT 260 at near Rs. 4.50-4.80. ( Lot Size 1575 ).
UPL is another stock which gave us good results in the past. I prefer the known devils to unknown angels. This stock is also showing current weakness. I would go for PUT 580 for Rs. 5.50-6.00. ( Lot Size 1200 ).
With these two trades if taken, we shall have 4 CALLS and 10 PUTS .
14 trades in 15 trading days is not excessive trading. What remains to be seen is few profitable trades. It is time we get them soon.
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.
Anand Kumar August 17, 2018 at 9:11 am
When do you cut losses? Current loss is around 28k for 60k invested in PUTs.Reply
admin August 17, 2018 at 9:39 am
I consider the premium paid as the maximum loss. Normally I do not cut losses as long as the stock prices is within 10% of the strike price. If everything fails, I move on to next month’s trades. I agree that this is not palatable to most of the readers but there have been many instances in the past when a big loss had turned into a big profit just in the last two days. Most recent example is the June series which is posted here.Reply
Anand Kumar August 17, 2018 at 10:17 am
Thanks for your reply sir. Ok, many people suggest having stop losses. You have a unique approach. Hats off. Saw the June series. That was really great!Reply
Srikanth August 17, 2018 at 9:23 am
Pramod Sir ,Reply
Do you think Airtel 360 Put between 4.5-5.0 is a best bet ?
admin August 17, 2018 at 9:40 am
Looks okay to me.Reply
Dinesh August 17, 2018 at 11:39 pm
If a trader enters now,keeping the current premium as an entry point . Will that be a good move ,having observing the premiums from starting of the both ,as they are cheap now.
Rakesh August 18, 2018 at 11:07 am
What is your opinion on icicibank 300 Put?Reply
Saket August 18, 2018 at 9:07 pm
Though the fundamentals of banking sector haven’t changed, ICICI is in a good uptrend since the beginning of this expiry-month (you like it or not!). It has gained almost 28% in the past 30-days and is the leading gainer of Nifty50. Having said that, 300 PUT may not be a good choice. In fact, if it corrects a bit in next few days, we should look for a CALL opportunity at a suitable strike either this month or for next month.
Pramod-ji, what is your opinion?Reply
admin August 18, 2018 at 9:16 pm
There may be some correction. But the way NIFTY and ICICIBANK are moving up, buying a PUT would be betting against the trend which I do not suggest. We can avoid trading in this counter. Readers might have noticed that in spite of my aversion to banking sector, specially public sector, this month I have avoided trading in them. Only YESBANK CALL was selected which fortunately has gone right presently. Bank stocks are behaving irrationally at present. PNB had gone above 90 and is back to near 83. In my view it should go to 70 but at present I am hesitant to take a trade as NIFTY is in uptrend.Reply
So not trading is a good choice.