We enter the last trading day of the week.
NIFTY went up again yesterday but there was no steam in the rally. Experts are not likely to agree but that does not matter. The top weighted stocks are not gaining momentum. Till they start moving up, we have a chance to cash some of our PUTS.
Experts are happy that NIFTY closed above 10600. As if anyone made money.
Now the next target is 10700, then 10800 and so on. It may happen for all we know. Or the market may do what it has been doing since last month. Open high and then go down. Let us be ready for the roller coaster ride. Talking about the likely NIFTY moves will not make money for us. Trades make money, talk is free.
Today our idea about IDEA came through. The stock went to a low of Rs. 36.25 during the day and the PUT 40 traded at a high of Rs. 4.00. Ended the day at Rs. 3.35.
SUNTV also decided to move down. It closed below Rs. 600 after a very long time. Let us hope its downward journey continues.
TATAMOTORS went quite high initially but then gave up all the gains. RELINFRA went higher.
MARUTI, M&M, INDUSINDBK all added a little bit to the loss.
But generally one good trade is enough to counter few bad ones. That job was ably done by IDEA.
This is how the position looked at the end of day.
The loss is now brought within a reasonable limit. But still it is a loss. I wish that TATAMOTORS and SUNTV would do what has been done by IDEA 40 PUT i.e. to show some good profit.
New Trades :
If we look at NIFTY stocks, the following 4 stocks are the biggest losers over the 30 day period.
CIPLA and SUNPHARMA are the two from Pharma Sector. IBULHSGFIN and YESBANK are having problems of their own. All these stocks would make for good choices for buying PUTS.
They are volatile, well traded and look weak.
Yesterday I had written that no more trades are being suggested as protection of capital is also a priority. Notwithstanding that statement, trading is about assessing the risk and taking a trade.
For the time being, I am not taking a trade in YESBANK as I already have the INDUSINDBK trade. Out of CIPLA and SUNPHARMA, my choice is CIPLA as it is very close to the 52 week low of Rs. 507.20 made in May 2018.
CIPLA PUT 500 at Rs. 5.50-6.00 has a maximum risk of Rs. 6000 and can do well.
IBULHSGFIN is hugely volatile. It is currently trading at Rs. 803 and moved sharply lower yesterday after doing nothing for the last few days. We shall go for a PUT about 8% away. That would be PUT 740.
It traded for Rs. 16.75 at close yesterday. With a likely positive open, it may be possible to get this trade for Rs. 13-15. Lot size being 500, maximum risk is Rs. 7500.
It goes without saying that there will be a lot of volatility. The trades can go wrong and the entire premium can be lost. So do not venture into the trades if you do not have the appetite for risk.
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.