NIFTY crossed 11000 yesterday.

During the day it made a high of 11078.30 and came down in the last two hours of trading.

The gain was based mainly on RELIANCE making the all time high.

SENSEX made the all time high.

But do we get carried away with the rise in Indices. There is no reason to do that.

Even on a strong day like yesterday, there were 22 losers and 28 gainers. At 10:00 am the position was 8 losers and 42 gainers. We see that 14 NIFTY stocks went from a gainer to loser position on the day the SENSEX made a record high.

I just looked at the data on NSE website about the NIFTY 50 and this fact emerges:

Over last 365 days, NIFTY has gained 12.64%.

In this period 26 stocks are losers and 24 are gainers.

Losers are more in number in spite of the 12.64% gain in NIFTY. This tells us that only few heavy weight stocks are moving the index but in general the market health is not good. There is a lot of weakness in this deceptively strong market.

Moneycontrol has presented another interesting viewpoint.

NIFTY had closed at 11027 on January 31, 2018.

We are almost at same position now.

NIFTY remaining where it was, there are 31 losers and 19 gainers.

You can read it here:

This further affirms my theory that it is really not a strong market.

How the day went for us ? :

US markets being down the previous day did not mean two hoots for NIFTY. Like mentioned earlier, it went close to the previous highs.

Such a day should have been a disaster.

But the inherent weakness ( not visible to the experts on business channels ) saw to it that we came out better at the end of day.

Just 2 days ago, we were looking at a notional loss of about Rs. 42000. NIFTY has gone up by 73 points in these two days. With 8 PUT trades in position, we are back into profitable position. Strange, but fortunately true.

Again it was due to UPL stock making the new 52 week low, now falling to  Rs. 577.65 during the trades. PUT 600 made a high of Rs. 32.50 and is mainly instrumental in bringing our positions back into the green.

BHEL too went down nicely and is once again marginally in profit.

RELCAPITAL went up initially to Rs. 390 and then moved down very nicely to Rs. 372 levels before close.

BHARTI stayed near Rs. 362.

Bank Nifty was up, so were banking stocks. Our 3 PUTS in banking stocks did not do well but it was more than made up by the gains in UPL, BHEL and RELCAPITAL.

Let us look at a slightly better picture :

Some peace of mind.

My only concern is that profit or loss can be real quick in option trades. We do not mind the profit part but loss is an altogether different issue. If it happens after seeing the profit, it is more distressing.

Stay alert and book the profits in UPL if it reverses. We shall wait and watch if the stock keeps on falling further, but if it moves up and PUT 600 goes down, we exit at around Rs. 25-26.

The stock is highly volatile. If it can go down so much in two days, it can do a similar reversal as well. It is by way of being cautious. I personally expect it to move down a little more.

With US market positive overnight and Asia also in the green this morning, we may see some positive move in NIFTY in the early trades.

But when does NIFTY do what we want?

As long as our selections are doing what we expect them to do, I do not mind NIFTY going up a few points. After all TV channels need something to keep talking about.

Any New Trades :

Metals sector is not doing well. I had tried to include VEDL in my list but the preferred price did not come about. In fact the price range occurred few days later and some of the readers have taken the trade as I could see from the comments. Good for them.

I am looking at HINDALCO this time.

PUT 210 was at Rs. 2.90 at close yesterday.

With a lot size of 3500, maximum risk is about Rs. 10000. With 10 days remaining to expiry and market having run up 450 points since June Expiry, we may see some down move.

PUT 210 HINDALCO in the range Rs. 2.60-3.00 looks like a good OPTION to buy.

Let us see how the day pans out.

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.