scorpiomanoj
Long

Trading opportunity

NSE:JSWSTEEL   JSW STEEL LTD
Trading opportunity:

JSW STEEL
CMP 277.15
Target : 297 plus
Stop : 265 (below the low of previous candle)
Rationale :
W pattern breakout.
Target : Length of the pole of W X 0.5 + breakout level = 297 plus.
Trading Strategy:
1) Aggressive traders : Jan Futures - Lot size 3000; Profit potential around rs             20X3000 = Rs             60,000 per lot. Risk Rs             12 X 3000 = Rs             36,000

2) Conservative traders : Options - Buy 275 strike Call at Rs             10-11 with an outflow of around Rs             11 X 3000 = Rs             33,000. Probable call level at the target of 297 is around ((297-275) * call delta ) X lot size = 22 X 0.5 X 3000 = Rs             33,000. Risk is the upfront premium paid which is Rs             33,000 . Underlying stop of 265 gives a call price of approx Rs             6 per lot, which gives a risk of Rs             (11-6) X 3000 = Rs             15,000.

3) Ultra conservative traders : Bull call spread - Buy 275 strike call at Rs             10-11 and Sell 300 call at Rs             3. Net outflow : Rs             8 X 3000 = Rs             20,000. OTM call strike selected base on the highest addition of OI; so ideally should be a strong resistance level . Max possible profit = 300-275-3 = 22 , ie 22X3000 = Rs             66,000; Max possible loss = Rs             8 X 3000 = Rs             24,000. Profits only if the underlying expires in the range of 275 to 300 (minus premiums paid).

4) Super ultra conservative traders : Buy stock at cmp with a stop of 265 and trail the price with open target.
Trading is my passion.
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