NIFTY moved higher for yet another day.
This was the fifth day of upward moves. Apparently it looks like that everything is hunky dory with the index and the markets.
On the day of a reasonable upward move 17 stocks advanced while 33 declined out of NIFTY 50 stocks. This ratio tells us that market may be ready for some correction. We have seen that NIFTY is not giving us profitable trades, it is the visible strength and weakness of our selected stocks which made the trades turn around in our favor.
Let us hope that our stocks continue their trend.
Yesterday it was the turn of HEROMOTOCO to come good. It has moved below Rs. 2800 level which makes it an ITM Option. We now look for a move towards the 52 week low of Rs. 2648. Such a move may happen or the stock may just reverse an go up. But there is no harm in expecting the down move. After all the move yesterday too came unexpectedly.
INFY had moved to Rs. 750 levels in the early trades but then gave up the gains while staying positive for the day.
The new trade of the day was EICHERMOT PUT 20000 which was taken at Rs. 340. By the end of the day, this option had moved up to Rs. 416.
Other trades gained or lost a little and the position at the end of day was:
Picture became a little better than previous day but there is no cause for jubilation yet. A profit is not a profit till the trade is closed. The need of the hour is to stay cautious with our trades.
New Trades for the day :
We have seen that mid cap stocks did not do well yesterday even when NIFTY was gaining. One of our favorite mid cap stock to trade has been IDEA.
The stock touched a low of Rs. 32.40 during the trades which is very near to the 52 week low of Rs. 32.00. The way the stock has tanked over last two trading days further down side is not ruled out.
This stock has got option strikes at Rs. 1.00 intervals so strike selection gives us many alternatives.
PUT 32 was traded at a price of Rs. 1.00 at close on Monday. The lot size is 12000. The risk is Rs. 12000 so am not suggesting PUT 32. We may go for PUT 31 @ Rs. 0.60-0.70.
Every trade has an element of risk. IDEA is more volatile than most other stocks. The trade can go right or wrong very quickly. We hope it goes right quickly.
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.