Today is the 6th day of November Expiry trades for us.
If we look at daily up and down moves, NIFTY has been up on 2 days and down on 3 of them. But the gains were very big– 220 points and 188 points. The declines were lesser with the result that NIFTY is up 256 points since October Expiry.
Has the trend changed?
Were September and October big corrections in a bull market?
Are we back into the sustained bull market run which began from March 2016?
Such questions come up everyday and really there are no answers. Markets can do whatever they wish to do and we are left with explanations and no money.
Just two days ago, we had all kind of bad news in the morning. Now it seems everything is fine. There is no tussle between RBI and the Government. There is no uncertainty about the State Elections in Rajasthan, Madhya Pradesh and Chhatisgarh. Probably we are not aware that suddenly all the NPAs of the PSU Banks have become good and there is no stress in the NBFC sector.
But the way banking stocks have gone up it is apparent that bullshit sells at a high price till people find out what they bought.
It is not for us to challenge the market wisdom or market action. We look for some signs that help us to take our trades.
These are the Top 5 Gainers and Losers yesterday.
There is none of the 10 Top Weight Stocks in the list of gainers.
One of them ( INFY ) is among the top losers.
Any meaningful rally is to be led by the leaders. Yesterday, the leaders were not participating. To me it is an indication that the relief rally which began near 10000 level may soon come to an end. But it may give us some trouble before it does that. SGX NIFTY is up more than 70 points and when that translates into today’s market gains, we are looking at serious trouble for the day.
That is the life of the Option Buyer.
Our position as of yesterday:
New Trade :
TITAN has done well over last 30 days and last 7 days.
We go for CALL 900 at about Rs. 20.00.
Premium is high but let us see how it works out. We are trying to get into a CALL for the first time since August Series. I have nothing against CALLS but am generally more successful with PUTS.
Some of the readers have been asking questions whether time has come to get into CALLS?
My answer is that it is the strength and weakness which tells us what to do. We have seen TATAMOTORS and BHARTIARTL in a continued decline since January 2018 irrespective of what NIFTY was doing. Every time is a good time for a right trade. And for a wrong trade too. We may end up a loser more number of times than we win.
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.