Market is closed today.
NIFTY closed 44 points lower at 11213 yesterday. This was a third continuous losing day for NIFTY.
Previous two days had seen bigger falls and brought our positions mildly into profit. The small decline of yesterday helped our cause much more.
The star of the day for us was RELCAPITAL. After around 4% decline previous day, it went into almost a free fall yesterday and ended up losing 8%.
This is the type of day PUT buyer looks for. The low for the day was Rs. 355.25 which makes our PUT 390 a deep in the money PUT. It traded at Rs. 30.70 at the end of day.
Some of the readers have commented what they have done about the trade. The best thing to do would be to exit this trade and get into PUT 360 or PUT 350 depending on your risk appetite. Part of the profit is booked and we stay in the trade to take advantage of the trend if it continues.
Maximum profit will come if we stay in the trade but then there is a chance of losing it entirely also. So we make a move to a lower strike.
If RELCAPITAL was the star of the day, L&TFH did a good supporting role.
This stock made a low of Rs. 144.65 during the day and closed at Rs. 146. The 52 week low of Rs. 140.55 is less than 4% away. Te stock is showing real weakness and may breach the previous low.
It would be advisable to book the profit in PUT 150 and move to PUT 140. PUT 140 was available for Rs. 0.90 at close yesterday. If the stock falls below 140 quickly, we make some profit in the new trade or lose Rs. 4050 at the maximum.
ZEEL and BHARTIARTL did well for the day while IBULHSGFIN and TATAMOTORS lost out slightly.
This is how the status looks now mainly thanks to RELCAPITAL and L&TFH.
Looks good but it is not booked yet. The steps explained above need to be gone through tomorrow to book partial profits. Let us hope the trend stays our friend for the next few days.
We shall look for any new trades tomorrow. Today was about what to do in the present situation.
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.