A day makes a big difference in the life of an option trader. A good price move in the desired direction is a boon not bestowed very often by the markets. We should gratefully accept such bonanza as and when it is given.
NIFTY was finally down by about 86 points having gone negative by about 115 points at one stage.
Still it is way above where it was last week. Our trades led by SUNPHARMA went right today. This stock which is under a cloud for various reasons held firm for some time before it breached its previous 52 week low of Rs. 435. There was no stopping after that and with huge volatility it moved down to make a new low of Rs. 401.50 and then recovered sharply to Rs. 417 level. We take what the market gives.
At this stage I would think of getting out of PUT 450 and move down to a lower strike. It could be 390 or 380 strike depending on how much risk one is willing to take.
RELCAPITAL too made a new 52 week low at Rs. 216.90.
Many readers had posted comments about this stock having a very strong support at 221 level and some were sure that it is not going to move below 220. Well, the market proves us wrong all the time but we still persist with our habits of making predictions. Many had talked of the support levels in case of SUNPHARMA too.
All along my theme has been that we can be either right or wrong with our selections. Key to profit is making the best use of the trades that go right. Do not keep second guessing yourself with support and resistance talk. We have seen how these fail on multiple occasions. We have nothing to lose but the premium paid.
TATAMOTORS too started the downward journey but I am not impressed. It must go below the previous low of Rs. 164.60 quickly for PUT 160 to be of some use to us.
INFY did not do well. We can not win them all.
IDEA trade could not be taken as our price was not seen during the day.
With negative sentiment prevailing, TITAN CALL 980 lost out a little. Still the stock made a very smart recovery from the low point of the day and had even gone positive for a while.
This is how the status looks like:
A good picture after many days. Let us hope it stays like that or gets better. Remember, a day in the wrong direction can take it all away.
New Trades :
Metals is a week sector currently.
TATASTEEL has lost over 10% in last 30 days and is negative for last 7 days as well. Its 52 week low is Rs. 493 which was seen on July 19, 2018. Can the present downtrend take it to those levels once again?
Only time has the answer to this question. We shall back the trend and go for PUT 480 at Rs. 6.00-7.00. Lot Size is a bit odd at 1061. Maximum risk in this trade is Rs. 7427.
We shall know over next few days whether we have the nerves of steel to make some money from TATASTEEL.
If the trade is taken, it will be our sixth trade for December Expiry.
Indications from Asia and SGX NIFTY are for a negative opening for our market.
US Market data is for December 04. With SGX NIFTY down by about 85 points ( it may change by the time market actually opens) our trades should do well.
Let us not get carried away and start counting our chickens before they hatch. Stay cautious and move to lower strike in case any PUT comes into a big profit because of a big move.
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.