Up, up and away.

That is how the markets went on Tuesday after a holiday on Monday. There were no half measures in the up move. It was with determined steps that NIFTY neared 11000 levels and may cross that summit today.

Once again markets have turned bullish and naturally our trades got hurt. It is alright to go wrong, no one can be right all the time, but when the stocks you thought should be going down move up by 4-6% in a day, the hurt is painful. The loss is swift. One can only take consolation from the fact that the maximum loss is already known and can not exceed that. Still a loss is a loss and is not a welcome guest.

It is early days yet and we have taken only 2 trades so far. There is no need for second thoughts or panic reactions. Such reversals in trading are normal and have to be dealt with. Emotions will not get us anywhere.

One of the readers has suggested the following trades:

As per buy observation watch out on these calls for tomo .. Targets are mentioned to reduce the influence of time decay

BUY ICICIBANK MAR 360 CE at 10 n trgt 12
buy M&Mfin mar 440 ce at 12 n trgt 15

I respect the opinion of my readers and that is the reason for highlighting the comment.

ICICIBANK option will cost around Rs. 27500 and we are looking for a profit of Rs. 5500. Similarly AXISBANK Call will cost Rs. 20400 and the profit target is just Rs. 3600.

We do not spend this kind of money on buying options and restrict our profits by defined targets. Small profits give us some satisfaction temporally but are invariably followed by one big loss which takes away many small profits. I can happily bear few small losses while looking for one big gain. A different view, but then this blog was meant to be different.

New Trades :

Our two trades have already lost more than 70% value. There is no point worrying about them at this stage. Let us look for new trades.

YESBANK is one of the big gainers over last 30 days and is positive over 7 days ( It did not gain yesterday ).

YESBANK CALL 260 @ Rs. 5.00- 5.40 can work out well if the up trend continues. Lot Size 1750, Maximum Risk : Rs. 9450

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.