The markets seem to be in a strong bear grip.
NIFTY closed just below 11600 mark after touching 10547.25 during trading.
Actually at close of trading NIFTY was down 309 points. The fall was very severe in the last half hour and the closing price is taken as the weighted average price of the last 30 minutes. That saved the blushes for NIFTY.
The fall in NIFTY did not give any benefit to our trades.
TATASTEEL and ZEEL ended up slightly higher even while NIFTY crumbled. ASHOKLEYLAND closed near the opening price.
For us, the unexpected star of the day turned out to be HINDPETRO.
The stock initially made a low near Rs. 242 and then moved up to Rs. 254. With NIFTY losing steam it came below Rs. 250 around 3:00 Pm.
And the floodgates opened around 3:20 pm.
Finance Minister made an announcement of reduction in Petrol price by Rs. 2.50 per liter out of which Rupee 1.00 per liter is to be borne by the oil marketing companies.
As soon as the announcement was made the stock was dumped.
The fall is accompanied by very large volumes.
The last price was Rs. 194.80, the new 52 week low being Rs. 191.
Thanks to the weighted average method for closing price, the Close Price is shown as Rs. 217.15.
Today, if the stock opens at yesterday’s level, it will be seen as down by 10.5%. Funny, but a fact.
This movement took PUT 240 to a high of Rs. 45.15 with last traded price of Rs. 40.05.
We do not know whether the stock will see a further decline or a pull back from here. This price is good enough to book a profit in this trade and some of the readers have already done it yesterday as can be seen from the comments. Congratulations to all those readers for a smart profitable trade.
IDEA made another 52 week low at Rs. 33.10 and PUT 37.5 has now more than doubled in value.
This is how the position looks now:
As already mentioned on quite a few occasions, these profits are notional till they are booked.
Looking at SGX NIFTY this morning, it appears we are in for another day of down move. It may change in the afternoon when the Reserve Bank announces Monetary Policy but more likely scenario is that the slide may continue.
We nurse our trades and do not add anything for today.
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.