indiamarketoutlook

Nifty: Wishing u all a Happy new Year & 2021 1st week outlook

NSE:NIFTY   Nifty 50 Index
Nifty

Observations:
- Nifty is currently in bullish territory
- Multiple potential support areas provided by Yellow Line, Green trend line dark blue line
- Risk of Nifty trying to test the 13813 – 13765 unfilled gap zone
- we see a strong rollover of 78% in Index Futures Position
- FIIs are Net 75% Long

Important levels for January 01 , 2021
Important support levels : 13935 / 13904 / 13882 / 13829
Important levels on the upside : 14036 / 14063 / 14085 / 14129

Strategy for January 7, 2020 weekly expiry
- Given the chart set up and data analysis, one may consider selling Nifty 13800 Put Option between 60-80 (Closing Price 64.75)
- Max profit potential in strategy Rs 4500/- to Rs 6000/- per lot till January 07, 2021
- More importantly, the strategy has an in built loss protection for a fall up to 13740-13720 till Jan 7, 2021

Any trading decision should be taken after assessing your risk management and if you are comfortable with the risk involved as against the reward potential it has.

Take care & safe trading...!!!

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Disclaimer:
- The view expressed here is my personal view
- Past performance is not a guarantee for future predictions
- Use this for educational purpose
- Any decision you take, you need to take responsibility for the same
- It's your hard earned money. Treat it wisely
- Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance
- if trading in F&O, understand that F&O trading involves risk
- Do take proper risk management measures
- Do your own analysis and consult your financial adviser if need be

Trade active: Nifty 13800 Put opened at 65.90 made a high of 70.15
giving ample opportunity to sell between 60-80

CMP 43
Trade active: Today was a day of consolidation.

Both Call & Put options closed in negative territory... if you are looking to understand why it happened, just look at the Volatility index... It cooled off by 7.27%

Plus there is a time decay for Saturday and Sunday....

Strategy Update
Our strategy to sell Nifty 13800 Put option between 60-80 works well. It gave ample opportunity to sell above 60 and has closed the day in profit for Option sellers at 35.05
Comment: Nifty 14098

13800 Put option
CMP 16

Consider selling 14200 Call option

cmp 48
Comment: 13800 Put option update
Sold at 65
CMP 3.15

14200 Call option Sold at 45
CMP 32

The strategy is in profit of Rs 5613/-

Happy trading...!!!

Comments

Wish You All A Very Happy New Year!
+1 Reply
Better to have straddle or strangle strategy. Butter fly or iron condor will still work better during volatile or consolidation phase
Close observation holds the key!
+1 Reply
indiamarketoutlook MarimuthuSuppaya
@MarimuthuSuppaya

I prefer strangle and iron condor strategy over straddles and Butterflies.

Some times I start with a plain vanilla Call / Put Short and then at a later stage convert it into a Strangle. I did that in LIC HSG counter in December month where it started with a 410 Call short (when LIC HSG FIN was at 380) and then when LIC did come down to 340 odd levels, we got good premiums to sell Put options as well and converted our position to Short strangle.

So yes, I do agree with you, one needs to observe, keep patience and wait for the opportune moment...!!!👍 😊
Reply
wish you a very happy new year too! you were rocking in 2020! continue to rock in 2021
+1 Reply
@Parasuram, Thank you very much...😁🙏🙏
All the very best to you too for 2021....
Reply
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