This is how NIFTY closed at November 2018 Expiry.
It moved up by 734 points.
It is already past tense. What now?
It actually does not mean a thing to traders if it does not make money. Let it go in any direction but our trades should be right.
But it is fashionable to talk about the Index so let us also do that ritual. As stated many times earlier, today’s rally is actually not a rally. Look at the Top 10 Gainers for the day:
Except KOTAKBANK, none of these stocks belongs to 10 Top Weight Stocks. And KOTAKBANK is at number 9. I agree that those stocks have also gained for the day but they have not led the up move today. And when the leaders do not lead, the rally fizzles out. We have seen this earlier and we may see that again.
These were my views and I may be proved wrong like many other times in the past. I am happy if i am wrong and do not lose money.
Coming to December Expiry trading, there is the outcome of State Elections which shall be casting its shadow on the market moves. We can expect volatility till the results are out. That makes our task more difficult. Well, option buying was always difficult. We are trying to make it simple but some facts can not be changed.
Trades for the day :
SUNPHARMA:
We failed with CIPLA in November Expiry. Time to change the prescription. This stock has been weak over 30 day period as well as 7 day period. It qualifies for buying a PUT.
Current price is Rs. 484.50. PUT 450 at a premium of Rs. 8.00-9.00 is a good choice. Lot Size 1100, Max Risk Rs. 9900.
INFY :
It made a down move today towards close. On November 26, it had gone below Rs. 600 for a while and then recovered. With INR gaining strength against the USD, a similar move mat happen again.
PUT 620 at Rs. 6.50-7.00 would be my choice. Maximum risk in this trade is Rs. 8400 lot size being 1200.
RELCAPITAL :
It came up with good results two days ago and the stock price moved up to Rs. 246.90 on November 28. It came down to a low of Rs. 222.85 on Expiry day and closed at Rs. 228.55. It is trading very close to the 52 week low of Rs. 221.60 made on October 26, 2018.
The price moves clearly indicate that market is not impressed by the stock as it lost 4% on a day NIFTY gained 129 points.
Only problem is that the stock is very volatile and we have to bear the cost of high premiums.
PUT 210 around Rs. 8.00 is my choice for a trade. Lot Size 1500, Maximum Risk Rs. 12000.
This sums up the three likely trades for the first day of the series.
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.
Comments
Vikas Gupta November 30, 2018 at 8:11 am
Sun Pharma lot size is 1100. Please correct it.
Replyadmin November 30, 2018 at 8:27 am
Thanks. Corrected.
ReplyAlok November 30, 2018 at 8:49 am
Good morning sir,
ReplyInfy has given a technical breakout in the last couple of days so I will be wary of buying puts. Of course I could be 100% wrong and your experience proves right!
May this month be profitable.
Regards,
Alok
admin November 30, 2018 at 9:11 am
I am the one who does not care about technical breakouts. At times I suffer for it. YESBANK too had gone to Rs. 229 last month in an up move from 165. What happened to that breakout?
Markets will remain uncertain. We just have to take some risks. Either we shall be rewarded or we lose out.
Cheers.
ReplyInzamammul Ahmed November 30, 2018 at 9:07 am
Sir motherson sumi is showing weakness when market moved up can we look for 145 PE of motherson sumi
Replyadmin November 30, 2018 at 9:13 am
Yes. It can be a good trade. I had thought of mentioning this trade today but then thought of waiting till Monday.
Cheers.
ReplyRavi kumar November 30, 2018 at 10:43 am
Sir, NTPC is consistant looser from a month now…It fits our criteria..
ReplyAshish krishna November 30, 2018 at 1:47 pm
Dear Sir,
ReplyJust curious, but you seem to have a preference towards put options over call options, so I was wondering is it just a preference or is there any reasoning behind it?
admin November 30, 2018 at 3:41 pm
This is a personal choice. Our aim is to earn some profit from the trades, not to be bound by certain preferences. Over the years I have found out that i am good at identifying weakness in stocks. One should do what one is good at. Occasionally i may go for CALLS also, but these occasions are very few in recent times.
cheers.
Replyvishal agarwal November 30, 2018 at 2:38 pm
Sir VEDL is also exhibiting weakness along with other Metal stocks. What is your thought on VEDL 190 PUT?
Replyadmin November 30, 2018 at 2:42 pm
Yes, it is a trade. But I am not suggesting all the trades on a single day.
ReplyYou can take the trade as it meets the requirements.
Cheers.
Raghav Madhav November 30, 2018 at 5:19 pm
Is these trades are for today or for this month
Replyadmin November 30, 2018 at 5:50 pm
The trades are on till they deliver a good profit or go worthless. No day trades are mentioned in these posts. Please go through the previous posts to know how the trades are taken and exited.
ReplyCheers.
Azar Shaikh November 30, 2018 at 10:16 pm
Sir there is stock called RECLTD. volume also good , IV is above 50,not in physical delivery,down by 15% from last 20 day. have you trade in this ever ?
ReplySankha December 1, 2018 at 7:06 am
Most pharma stocks are on verge of upward breakout.Would it not be a better trade to buy call in Sun Pharma ,expecting it to move up along with other pharma stocks?
ReplyMadan Mohan December 1, 2018 at 9:43 am
Some fuel added to our SunPharma Put – insider trading allegations –
SunPharma can’t seem to get rid the monkey of its back. If it was the USFDA closing Halol Plant earlier, then it was the promoter buying Suzlon, then Ranbaxy buyout, then insider trading allegations.
ReplyCan’t we get a whistle blower for govt agencies also?
sailendra sharmaa December 1, 2018 at 10:26 am
sir, your view about HCL Tech pls.
ReplyNagar December 2, 2018 at 6:31 am
Sir.your views on mindtree for december expiry.
Replyvishal agarwal December 2, 2018 at 11:43 am
Sir, I have a question on Relcapital selection. I was looking at historical data, the stock for past several years did not go below 200. Our Put 210 @8 to make money, the price should go below 202. How do you access such situation. What was your thought behind picking this trade?
Replyadmin December 2, 2018 at 9:33 pm
I look at the current weakness to decide a trade. After that it is up to the market. Stocks like Yesbank have fallen from 400 level in mid August to a sorry 170 today ( after touching 146.75 on November 29). Did anyone anticipate it?
ReplyWe just have to believe that the weakness will continue.If it does, we make money, if it doesn’t, we lose. Nothing could be more simple.
Cheers.
saray December 9, 2018 at 11:55 am
Dear Pramod,
I am your follower on Quora. I would like to know how you short listed Reliance Capital, I have gone through your stock selection page and it’s based on Nifty stocks only.
ReplyI would appreciate if you can let me know the strategy to select non-index stocks?
admin December 9, 2018 at 12:44 pm
The reason is given in the post. It was close to 52 week low. And it has made new lows since then.
Replyfor selecting stocks other than NIFTY 50, select NIFTY NEXT 50 MIDCAP 50 and use the same procedure.
Cheers.
Saray December 9, 2018 at 1:49 pm
Thank u Sir
Reply