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.
T.sai January 22, 2019 at 9:03 am
Dear sir ,Reply
Kindly post the updates in other segment also.
admin January 22, 2019 at 8:46 pm
This series was started as an experiment. For the current month it did not work out.
I will see what works out and come back for February series.
Suhas January 22, 2019 at 9:06 am
Sir, do you have plans to take webinar classes ?Reply
MR January 22, 2019 at 11:44 am
If I was you, I’ll buy another sector stock, instead of scaling up.Reply
Akshay Kumar January 22, 2019 at 10:21 am
Please clarify with your valuable suggestion, can we scale up to 2 to 3 lots from next expiry on wards if we have the capital investments. Also, those who are the part of this blog, please suggest and guide me with their experience… Thanks
admin January 22, 2019 at 8:41 pm
Trading 1 lot or more is simply an arithmetic issue if you are able to cope up with the stress of the likely loss from more number of lots.
Stay within your comfort zone whether it is one lot or five.
Anand Kumar January 22, 2019 at 11:58 am
Thought behind playing with one lot is, is the minimum that you need to buy to initiate a trade. Secondly, Pramod sir mostly tries to make each trade worth around ~10k, so that we don’t lose big in one trade. That’s the comfortability level of Sir and also most of the traders here.
So if you ask for our advice, then ask I would say is, if you are comfortable losing 20k in each trade, then you can go ahead.Reply
vishal agarwal January 22, 2019 at 12:24 pm
Sir, I started trading based on your method since last 2 expires. And since those were not profitable for me. I booked profits on all my trades of this expiry prematurely today except sun pharma PE (which I re-entered and is in loss anyways). Maybe it was a very emotional decision to book out as I cannot afford to lose for the 3rd month in a row if markets reverse from here. I know this is against your teaching. But maybe it will take some time before I can really imbibe all your learnings. Though it’s so silly to think that we can run away from the markets. As if we will never come back again and take the same risks and lose the gains that we protected today.Reply
Thank you so much for teaching us this unique and simple way of buying options. Though it will still take some time to really trade your style.
dev January 22, 2019 at 12:41 pm
I am sad today. because I shortlisted Vedanta and Jindalsteel yesterday…but could not arrange funds… and both performed vary well.Reply
Pranav Jaiswal January 22, 2019 at 8:51 pm
Sir Do we continue to hold Tata Steel, if so till what price?Reply
admin January 22, 2019 at 9:01 pm
Generally we do not get out of the stocks which are making new 52 week lows. We wait for another day of down trend and try to exit at Rs. 28-30 levels and then enter PUT 440.
Tharik January 22, 2019 at 9:20 pm
Dear Promod Sir,Reply
Reliance Infra is close to 52 wk low. 270 PUT @ 5Rs looks like a good bet. Need your suggestions on this trade
Krishna January 23, 2019 at 2:31 am
I think this month pick has the highest probable hit rate & potential huge profit; though the actual profit may or may not be that high.Reply
It has been a great & satisfying month in terms of right trade in the favour. I don’t know, that feeling of vindicated right is good or not.
Kumar January 23, 2019 at 6:30 am
Sir what’s your view on Sunpharma ? Will it revisit 380 levels ?Reply
Akshay Kumar January 23, 2019 at 9:02 am
Good Morning.. Do we have any watsapp group here in Hyderabad? Please do let me know if you have and if not also…shall we plan for one as the other cities candidates have it…I just wanted to join you all, in or Hyderabad group. Waiting for your reply. Thank you