The first day of the year was positive. On second day market decided to get back to negative zone and it was done in a big way,
We are back to below 10800 once again. This tug of war between buyers and sellers will continue for a while. Ups and downs are part and parcel of life in the market and it is where opportunities are to be found.
INFY kept its head above water even in such a big fall. TATASTEEL came down to near Rs. 492 level and PUT 480 gained decently. SUNPHARMA looked to do well in the first few hours and then ran away from us.
MARUTI 7200 PUT never came to our price. So it is a missed trade. It moved in the right direction a little early and we could not get into the trade.
With all these moves happening yesterday, we come into profit zone.
I could shut shop right now and claim that January Expiry ended profitably and that will be a true statement. But that is not how trading is done. We have to keep looking for trades, see where the right trades take us and be active throughout the month. Not very active though.
On the first day of the January expiry we were looking at buying a CALL in M&M. Decided against it and went for INFY. Since then M&M has lost about 8%. Good escape.
Today, I am thinking of buying PUT 700 in M&M. It fits the 30 day and 7 day weakness criteria. IV is still on the lower side. But like I decided to go for MARUTI yesterday, M&M is a trade for me now.
M&M PUT 700 @ Rs. 7.00-8.00 is my selection for a trade for the day. If the stock opens higher, we may buy this option for up to Rs. 6.00 but not lower than Rs. 6.00 as that would indicate the reversal of weakness. This means that the price range is revised to Rs. 6.00-8.00.
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.