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.