RELIANCE – Positive Outlook Post Q1 Results with Bullish OI

Jul 20

________________________________________________________________________________📈 RELIANCE – Positive Outlook Post Q1 Results with Bullish OI Confirmation
📅 Setup Date: 17.07.2025 | ⏱ Timeframe: Daily
📍 Strategy: Post-Earnings Momentum Setup with Defined Risk
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🔍 Overall View
Spot Price: ₹1476
Q1 Result Update: Profit ↑12% YoY, beat estimates — strong earnings trigger
Trend: Bullish Reversal – Price holding above 1470 with fresh long build-up in CEs
Volatility: IV ~23–27%, stable to slightly rising → good for directional plays
Ideal Strategy Mix: Bullish directional spreads or high delta long CE
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1️⃣ Bullish Trade
Best CE: Buy 1480 CE @ ₹25.15
Why:
• Long Build-Up (+60.38% OI) with price ↑3.5% — strong institutional buying
• At-the-money with delta 0.50 → responsive to price movement
• High OI (27.5 lakh) with active volumes confirms smart money activity
• Matches post-result momentum — ideal CE for breakout strategy
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2️⃣ Bearish Trade (Contrarian)
Best PE: Sell 1450 PE @ ₹10.75
Why:
• Short Covering seen (-5.57% OI) → downside hedge positions getting closed
• Price ↑3.3% and IV stable (22.36%) → premium erosion favorable
• Spot is comfortably above ₹1450, providing buffer
• Rests below key support zone post-result → limited downside expectation
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3️⃣ Strategy Trade (As per trend + OI data)
Strategy: Bull Call Spread → Buy 1480 CE / Sell 1520 CE
            → ₹25.15 / ₹8.85
     Net Debit: ₹16.30
     Max Profit: ₹40 – ₹16.30 = ₹23.70
     Max Loss: ₹16.30
     Risk:Reward: ≈ 1 : 1.45 ✅
     Lot Size: 500
     Total Risk: ₹8,150
     Max Profit: ₹11,850
📊 Breakeven Point: ₹1496.30
📉 Exit If: Spot closes below ₹1465 (invalidates CE strength and post-result optimism)
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Why:
• Strong Q1 numbers + fresh long build-up on 1480 CE and 1470 CE
• 1520 CE also active but minor short covering = good candidate to sell
• IVs are moderate, giving clean pricing for spreads
• Defined risk, R:R > 1:1, and positive delta makes this strategy safer

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📘 My Trading Setup Rules
Avoid Gap Plays
→ Check pre-open price action to avoid trades influenced by gap-ups/gap-downs.
Breakout Entry Only
→ Enter trades only if price breaks previous day’s High (for bullish trades) or Low (for bearish trades).
Watch Volume for Confirmation
→ Monitor volume closely. No volume = No trade.
Enter on Strong Candle + Volume
→ Execute the trade only if a strong candle appears with increasing volume in the direction of the trade.
Defined Risk:Reward Only
→ Take trades only if R:R is favourable (ideally ≥ 1:2).
Premium Disclaimer
→ Option premiums shown are based on EOD prices — real-time premiums may vary during execution.
Time Frame Preference
→ Trade with your preferred time frame — this strategy works across intraday or positional setups.
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⚠ Disclaimer (Please Read):
• These Trades are shared for educational purposes only and is not investment advice.
• I am not a SEBI-registered advisor.
• The information provided here is based on personal market observation.
• No buy/sell recommendations are being made.
• Please do your own research or consult a registered financial advisor before making any trading decisions.
• Trading involves risk. Always use proper risk management.
I am not responsible for trading decisions based on this post.
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Aug 12

Trade closed manually

Level Invalidated