NIFTY stayed above 11000 on Friday.
On Thursday, it was up only 1 point. Now down 4 points. We call it consolidation after the very good up move over last week.
On June 28 ( June Expiry ) , NIFTY had closed at 10589.10. In 11 trading days it has gone up by 430 points. The rise is mainly due to TCS, RELIANCE and few others. All the stocks have not participated in this rally.
Even for this small 4 points loss, there were 39 losing stocks as compared to 11 gainers for the day. NIFTY MIDCAP Index lost 1.34% on the day NIFTY was flat. This does not signify a strong market.
We are concerned with our trades. NIFTY moves matter to some extent that they can give a sense of the direction but each stock is different.
Our selections improved even when NIFTY moved up 72 points. They came into profit on the day NIFTY was just 1 point up. This profit increased significantly yesterday.
One good trade can do wonders for your profit and loss account. Market gives the opportunities. Traders think they are smart and they miss out on these chances by taking out very small part of those profits.
UPL 600 PUT did wonders yesterday.
For the third successive day, the stock made a new 52 week low and this time it was Rs. 548.85.
This PUT had touched a high of Rs. 52.95 during the day. Two of my readers exited at Rs. 51.00.
Few more got out at Rs. 47/45/42 etc.
A good trade for most of them and this one trade has recovered the loss from all the others put together.
BHEL which had gone wrong in the beginning of the week came back and made yet another 52 week low at Rs. 66.85.
Now PUT 67.5 is ITM put.
This trade has also turned profitable.
RELCAPITAL and BHARTIAIRTL also moved lower and are in the profit zone.
Banking stocks PUTS did better than previous day but we are not yet out of the woods there.
HINDALCO 210 PUT mentioned yesterday as a new trade was possible to get at Rs. 2.60 and it ended the day at Rs. 2.85 after having moved up to Rs. 3.90 at one stage.
Overall a good day for our trades.
In the chart below, I have taken value of Rs. 42.00 for UPL 600 PUT and this trade will now be considered as closed.
I had suggested in few comments yesterday that one can wait for Rs. 50 but get out at 42 if it reverses. It reversed. So Rs. 42 is the price for getting out of trade for us.
Something good to look at thanks to one good trade.
I am really pleased to note that some of the readers made profit from this trade and shared the experience through comments.
Traders need to talk to each other to keep their morale up and this site provides that opportunity.
Market Up PUTS Up — A Contradiction :
We have seen that market is up by more than 400 points in last 11 days.
We also see that 4 out of 8 PUTS ( Out of Money at the time of entry ) have done well while 4 have gone wrong.
It is a little about getting lucky like in UPL losing so heavily. But it is more about our selection process and the conviction being right.
Having the belief in our methods is crucial. In the two days when market went up by 174 points, there were suggestions to get out of the PUTS and buy some CALLS.
I would have bought some CALLS if there was some conviction about that. But staying with what we had already done has proved rewarding even though NIFTY has gone up another 70 points after that.
Trust your methods and keep the belief.
If the methods fail sometime do not ditch them. Probably you are in for much bigger profits next month.
Enjoy the weekend but do check these pages every day.
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.
Prince Nahata July 14, 2018 at 10:06 am
Sir why don’t we make active the forum you have on this site?This question is to all fellow traders also.Because I check comments multiple time during whole day While you write just one insightful post.Are we being greedy?lolReply
Rajkumar July 14, 2018 at 10:35 am
I am Rajkumar from Chennai, I am following your wonderful guidance after attended last class in Chennai. had exit UPL @ 41.. Thanks for being a good teacher and mentor for guiding on the right path.
admin July 14, 2018 at 3:07 pm
Congratulations on a good trade.
Thanks for the kind words.Reply
Jayesh July 14, 2018 at 1:30 pm
Hello sir, I wasn’t well hence missed to interact for last few days.
UPL did what it did in last month and I’m able to exit around 50 in UPL unlike last month where i exited bit early. Hope other trades also moves in our direction.
sir i want to ask you a question regarding ITR.Reply
I am getting confused as to turnover for option trading. if you could explain in short ,it would be helpful.
is it (loss + profit + sale value of premium) ?
here loss should positive amount or negative amount for purpose of turnover ?
admin July 14, 2018 at 3:06 pm
Congratulations on a good trade.
I am happy when some readers make money by doing a right trade.
As regards ITR, it would be best to consult a CA.
Narayanan July 14, 2018 at 2:05 pm
Excellent Analysis and also you have loads of patience and that is why you are a good teacher. Help me Sir where can i take the calls from you? Please inform me where can i reach you for options trading. I have bbeen following you for quite some time. I request you once again where can i reach you for good options trading.Reply
Thanks and Warmest Regards
Narayanan July 14, 2018 at 2:11 pm
I am following you in this column for quite a while. Your trade analysis is excellent and above all your advice to us to be patient is proving to be right in the end. Excellent work Sir. Keep it up. Will i have the privilege of reaching you? Tell me Sir where i can take calls from you in options trading. Please guide me and help me.Reply
Thanks and Warmest Regards
admin July 14, 2018 at 3:04 pm
Thanks for the kind words.
I have sent a mail to you separately.Reply
Narayanan July 14, 2018 at 2:16 pm
Hi… Iam Narayanan from Chennai and have been following you for a while. Your logic behind selecting a stock is excellent. I would like to reach you for getting such calls in options trading. Where do you give such calls? Please help me for wich i will be grateful to you for ever.Reply
Thanks and warmest regards
Narayanan July 14, 2018 at 2:46 pm
YOUR ANALYSIS ARE EXCELLENT. KEEP IT UP. YOUR ADVICE OF BEING PATIENT IS PAYING RICH DIVIDENDS, AND YOUR OPTIONS NEXT FOLLOW UP IS VERY SIMPLE AND USEFUL.Reply
THANKS AND WARMEST REGARDS
Nathan July 14, 2018 at 4:00 pm
Dear Pramod ji,Reply
From the guidance enriched with your experience, many of us are evolving as better traders.
Personally I am able to note the difference in the mind set earlier and now when a trade is ON.
Heartfelt thanks to our Master for his simple but effective way to manage a trade.
We have just 9 more days in this series.
To my eyes, the following trades seems to be appealing.
All with limited risk with potentially high reward.
With due respect to the supremacy of the market, the following trades seems attractive:
BALRAMCHIN 60 PUT below Rs.0.50
Lot :7000 Maximum Risk : Rs.3,500/- only.
IDFCBANK 35 PUT below Rs.0.40
Lot :11000 Maximum Risk :Rs.4,400/- only.
L&TFH 140 PUT below Rs.1.70
Lot :4500 Maximum Risk Rs.7,650/- only.
Once again thanks Master !
Chirag July 14, 2018 at 7:33 pm
I agree with you Nathan that with guidance of pramod sir we are evolving as better trader….I was never able to trade options before meeting pramod sir….infact I was never comfortable with leverage product…..thanks for the above trade set ups….lets all of us make this forum more active and post the trades which can benefit others as well….Reply
admin July 14, 2018 at 8:17 pm
Thanks Chirag for the kind words.Reply
admin July 14, 2018 at 8:17 pm
I agree that the risk is low. The problem is that the volumes of trades are very low in Balrampur Chini and IDFCBANK.
One of my friends had Balrampur PUT in March Expiry. It was bought for Rs. 4.00 and sold for Rs. 44.00 on Expiry. It is not that the person was patient with the trade. There were NIL contracts traded once it became ITM and he could not exit. Luckily for him price did not recover in the end.
Do have a look at the volumes before entering a trade.Reply
Nathan July 14, 2018 at 4:03 pm
As our Master encourages, let all the traders come out with their views to improve interaction.Reply
Let the number of comments increase like the UPL PUT price !
Mahesh July 14, 2018 at 9:08 pm
UPL and BHEL looks like. it will bounce back.. it is beaten down stocks this month.Reply
Prince Nahata July 15, 2018 at 10:09 am
I am seeing that for infratel Spot @302.25 While 300Pe is @16 but 300ce is available at just 4.8 Can anybody explain such disparity in prices? Volatility is also very high for put options.Reply
Sandeep July 15, 2018 at 11:22 am
Hi Sir, UPL’s volume has increased significantly on Friday and it sees a sharp bounce back from 548 to 568. Looks like it may reverse it’s trend for few days before it starts it downward journey again. Please share your views.Reply
admin July 15, 2018 at 9:30 pm
Let us see. No views right now. As far as I am concerned, the trade is over at Rs. 42.00.
May enter another trade when it looks appropriate.