An interesting day for the index and for our trades on Tuesday.
NIFTY had a negative close after 5 days of positive trading.
It was not so simple. At one stage NIFTY was down 90 points. Thereafter it started moving up and ended the day with slightly negative close.
I had written yesterday:
“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.”
This proved true for HEROMOTOCO trade. PUT 2800 moved up to Rs. 85.00 and then came back to Rs. 36.35. It is still profitable but the dream of a big profit is put on hold now.
Almost similar move was seen in BHARATFORG, This stock staged a smart recovery from the low of near Rs. 473 to be back at Rs, 484. Again it was a big set back to our expectation from this trade.
INFY improved towards close. Good for us.
The three good performers for the day were TATASTEEL, M&M and ZEEL. All of these made a nice down move and did not recover when NIFTY was recovering. That gives us hope for today.
The new trade for the day was IDEA PUT 31 which did not do well. The stock had fallen 13% over previous two days but moved up on the day with negative close. We can not win them all and can not win on every day. We take good with the bad and look forward to another day.
With few trades going well yesterday, this was the situation.
I would like the readers to tell me whether any of them moved out of HEROMOTOCO trade with a good profit and entered a lower strike option.
Not that it was necessary to be exiting but whether someone actually did it.
New Trade for the day :
One of our old favorites RELINFRA is trading very close to the 52 week low. It is down over 30 day period as well as 7 day period. The stock is highly volatile and the current IV ( Implied Volatility) of the near PUTS is in the range 50-55.
CMP is Rs. 278.95. We go about 5% away from the current price. That would be Rs. 264. Available strike prices are 270 and 260.
I would go for PUT 270 @ Rs. 5.00- 5.50. Lot size is 1300, maximum risk is Rs. 7150.
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.