It is worth trying a long position because the SL can be just a few points below May 30th low 8572... say 8560.
If it dips below that then the Wave structure visualised in the chart is not valid and has to be adjusted.
Even those who trade in are risking only about Rs2000-2500 per lot since the lot size is 75.
Basically I am quite sure that Maruti will go up in the June contract.
Maruti has now hit the 38.2% Fib retracement of the drop from December to end May. It may correct a bit or consolidate. But the trend is up. Levels I am expecting eventually are: 9000/90150/9345 (futures prices)
When you are bullish why not sell Puts rather than buying Calls? Just wanted to know since it looks like you trade a lot of options. I write Puts when bullish as in Yes Bank currently.
- In terms of candle structure it appears to be consolidating since the start of June.
- However OI has gone up. CE 540/550 have the biggest additions and total OI. PE 530 has the biggest addition of OI.
- I have more confidence in Indusind & Yes. In Yes I traded long in futures intraday today and also have written puts @ PE 330 which I am holding
- Seems to have a bit of upward momentum. Daily candle is trying to push up above the Ichimoku cloud. But very narrow range series of Dojis so there may be a breakout in any direction.
- CE 3000 and PE 2850 has had maximum addition of OI
- Basically waiting for a breakout but I can't figure out in which direction.
NIfty: Greatest PE OI addition is at 10500 strike... about 135,000 contracts. However, a somewhat reliable addition number would be over a million OI addition. That is happening in CE strike 10900 with OI addition of 1,038,975 and next comes CE 11,000 strike. PE 10700 has had a reduction of about 89000 contracts since yesterday. So you have to decide buy/sell a call/put. Personally I would not deal in Nifty or Bank Nifty till next week.
As far as risk goes price can go UP DOWN or SIDEWAYS. A call/put buyer only makes profit if the trade moves in his direction. A writer makes money if it goes his way or even stays sideways. So a writer has a statistical advantage of 2/3 but a buyer requires one direction which is 1/3. Something like 80-90% of buyers end up in loss. And then there is the decay factor in favour of the writer.
Theoretically writing has unlimited loss but then you can always close it manually. Plus you get the premium deposited in your account the moment you make the trade. So personally I never understand why people say "unlimited risk" in writing.
I mean there is huge risk in the spot market which is long only so a downtrend leaves you open to loss. But no one alerts you to that. In fact brokers are always saying we are in bull market so that clients and potential clients keep investing and providing the broker commission. Go back in history and read the dishonest broker prediction in the year 2015. It dell around 30% or so I think and yet all the "experts" talked about a "bull market".
However, that said, I must admit that I myself am not sure of where the Nifty is going. I had written Nifty 10700 and 10800 puts which I closed for small profits. I see clearer patterns in Maruti, Tata Global, Yes Bank, Jublfood etc. so I have positions there.
But these are just my opinions. I am not a SEBI registered advisor. But if you see my past posts you will notice that there is a very high level of accuracy.
'Bhasa bhaber bahok, bhab I pradhan bahasa pare' - Swami Vivekananda.