On Friday, US markets closed higher.
SGX NIFTY is up by 68 points at 7 am today indicating a strong opening for our markets. Nowadays SGX NIFTY has actually stopped being a good indicator. By 9 am the status may be different.
But this strong opening does not bode well for our 7 PUT trades. As it is Friday moves had spoiled some of the good trades. Another day of up moves will cause a major loss.
We may have to tough it out for few more days. Each day costs some time decay. To make up for that we shall need a volatile move in our direction soon.
Adding a new trade to a list which is already under some stress is not an easy job.
But looking for opportunities can not be stopped.
Let us have a look at UPL :
Over last 30 day period this stock is down by 9.47% while NIFTY is up by 1.69%.
This is weakness further confirmed by the fact that it made a 52 week low of Rs. 604.20 on June 28.
It is not showing strength over last one week of trading.
In technical parlance it can be said to be consolidating before it breaks out on a higher or lower sign. Considering the weakness exhibited in the last one month and the tepid performance over last few days, my expectation is that move will be towards the low.
And when it goes lower, it may breach the Rs. 600 level.
All these theories are just theories but we need some reasoning to support our trade and this is a good enough reason for me. Possibility of going wrong is always there with every trade. That should not stop us from making decisions.
PUT 600 closed at Rs. 8.85 on Friday.
With the market likely to open higher, there may be some up move initially. It would be alright to Buy this PUT in a range of Rs. 7 -8.
If it does not move up with rest of the market and remains at lower level, we may go up to Rs. 8.50 too.
Asian Markets :
As of 7:30 am this is how Asian Markets are performing:
Let us be ready for a real rough ride today.
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.