Short Strangle Asian Paints

Jan 26, 2020

Asian Paints is not showing any sign of any Big Move on Monday

Long Bullish Engulfing Candle can be spotted on Lower time frame charts
Markets have managed to close above Pivot Resistance zone in Lower time frame charts which shows opening may be a gap up directly facing resistance at 1800 Level and tumbling from there

1800 is Strong Resistance with Highest Call OI, day's high 1779.9 got rejected from 1800 Resistance

Inverted hammer candle is formed but the closing is below Trendline

I think on Monday an Inside Bar formation may take place which will test S & R and decide its trend

So a Short Strangle would be profitable

Short 1780 PE ( 1 Lot )
Premium = 9

Short 1800 CE ( 1 Lot )
Premium = 10.6

Stop Loss = 2

Max Loss = 4 * 600 = 2400
Max Profit = 11760

If Stock manages to break the day's low with high Volume we will unwind 1780 PE and Short 1820 CE, 1780CE

Jan 26, 2020

Note

The stock may for a spinning top on Monday and then show a Breakout
But if it shows Breakout tomorrow itself we will Unwind 1800CE and Short 1800 CE,

Jan 27, 2020

Note

So as said we will Unwind 1800 CE and Short 1800 PE @ 14.60

Loss in 1800 CE @ 19.1 is 8.5 * 1300 = 11050

Jan 27, 2020

Note

Calculation mistake Loss at 1800 CE @ 19.1 is 8.5
And for 1 Lot it is 600
So 8.5 * 600 = 5100

Jan 27, 2020

Note

Unwind 1800 PE @ 14.75
Loss of 0.15 * 600 = 90

Jan 27, 2020

Trade closed manually

Loss in 1800 CE as SL was hit = 2 * 600 = 1200
Loss in 1800 PE = 0.15 * 600 = 90
Profit in 1780 PE = 0.5 * 600 = 300

Net Loss = 990

Jan 27, 2020

Note

Breakout was seen in Asian Paints but the adjustment was not profitable because the Breakout was actually a Fake.

We will wait for some movement and let the market decide its trend then place our positions

Jan 29, 2020

Note

Again this is a fake Breakout as Short wick/shadow below our trigger level shows rejection from Bulls
We need to wait for some more time.
PCR is 0.52 which shows Neutral Sentiment
Max Pain is at 1760 Strike which shows we can expect a 20 bps Bearish move within two days.