We cannot time the market but One of the benefits of having a positional view is when your time comes you will make the most of it....
On 25th Sept 2017 It was recommended to buy SBI between 244-256 for target of 278 and in best case scenario 305... Yes Its been exactly one month but the reward is sweet and there to be seen... From average buy price of 250 to 316.95 so far. Target of 305 well achieved. That's what we have got now...
Here's the link for previous analysis
However if you are looking to buy the stock after news of recapitalization of PSU banks you may have already missed the bus....
As an intra day trader one could have missed this spike of 18-20%
Re capitalization of PSU Banks (2.11 lakh Cr over 2 years) although is good news in the short term but in the longer term there are a lot of questions that will need to be answered...
- how it will effect the Fiscal deficit
& more importantly
- will the banks be able to make the best use of the funds
I wont go much more into the ifs & buts...
So Coming back to charts and understanding important levels from here on...
Going forward we wait and see for a couple of sessions how the stock behaves here...
-303-312 is an important zone for the stock
- the stock has to sustain above this zone for further up move potential up to 354-360 levels
- how ever a close below 297 may give an indication of crack appearing for initial target of 280
- going below 280 may signal strong view again
Hope it helps to Plan your trade accordingly...!!!
Take care & safe trading
Is SBI done with its up move...???
May fall to 308 levels
From 327 to 316
Consider Booking profits in short positions as per risk appetite.
the stock recently made a low of 304.3 i.e. taking support in the important zone of 303-312 mentioned above
so doors are open for SBI to attempt 354-360 zone in the near future
For the current month though 340-347 zone may provide some resistance
- 305-312 is important level for SBI on the lower side
Given the set up one may consider Short Strangle strategy for SBI November month
SBIN November expiry 300 Put option around 11
SBIN November expiry 330 Call option around 13
Lot size 3000
3000 * (11+13) = Rs -1.40% 72000 / -
Maximum profit in this strategy is of Rs -1.40% 72000/- if SBIN stays anywhere between 300-330 zone on expiry day i.e on 30-Nov-2017
( For risk management consider to move out of the strategy if SBIN goes above 345 or below 290 in Equity )
The strategy covers some risk for movement beyond the range but do understand that Trading in Futures & Options involves risk.
Loss will occur if SBIN closes above 354 or below 276 on expiry day so give importance to Risk Management
Understand the risk:reward potential and do necessary homework before taking any decision
Take care & safe strategy
Honestly speaking When we went long in SBI between 256-244 zone we were looking for targets of 278 and in best case scenario around 305.... And we were looking for a bigger fall from those levels. As you said due to valuation concerns
However with a strong gap up and close beyond 305 things look different now and we are giving it a fresh look... Currently we have positioned ourselves for some range bound activity...
we can think of gap filling if SBI starts trading below 297 consistently. And Below 280 Gap filling may happen in quick time...
However till then we take it on face value & we respect what chart is telling us...
Till the time 297-280 zone is held yes doors are open for SBI and we would assign a higher probability to attempt 354-360 zone... whether it will actually go or not that only time can tell and it can take it's own time....
That being said we have mentioned in the reply above that view for the current month is range bound.
" Currently we have positioned ourselves for some range bound activity... "
We have recommended a short strangle strategy in SBI for consideration in another separate post. Details of the strategy is shared in reply to you too. Please go through the same.
In case you missed here's the link for the post....
Where we have recommended selling 300 put option and 330 Call option....
That is what SBI is doing currently....staying in the range...
SBI recovered from 304 levels And today has fallen from 330 odd levels....
We would be a little sceptical if SBI closes below 297 and look for some more upside if it closes above 335. Till then we are looking for rangebound activity....
Hope it helps...