Sun Pharma: Pole & Flag Chart set up & trade opportunity
Sun Pharma
- We observe Sun Pharma giving a steep rise in July month end (Pole formation)
- thereafter the stock went in to consolidation phase (Flag formation)
- Now the stock has come out from that consolidation phase
- going forward, on the lower side 780- 760 may provide support
If the stock manages to hold on to 780-760 zone for some time, then 930 / 944 could be a possibility by mid December.
Any dips stock towards 785, could be an interesting proposition to go long in Cash market.
___________________________________________________________________________________________________________
- Looking at the Derivatives Data, prima facie, it looks like 840-865 zone may be difficult to cross in October month
Now that we have understood important levels with the help of charts, F&O trading strategy that may be considered for October month: Iron Condor
Sell 900 Call option
Buy 930 Call Option
Sell 750 Put option
Buy 720 Put option
The strategy would have max profit potential of approximately 12% on margin requirement till October expiry. Any close between 750-900 on 28 October 2021 would give the desired results.
The strategy tries to focus on managing the risk and roughly provides protection for a fall up to 739.50 on the downside. On the upside, any close above 910.50 on 28 October, would not be favorable.
One can Stay alert, if Sun Pharma closes below 760 or above 880. These levels should provide ample scope to exit with less damage / adjust trading strategy, in case view gets invalidated.
Note: Unlike previous months where strategies worked smoothly, September month was a tough one with stock prices moving crazy.
- Tata Steel although followed the red channel in charts to perfection and was a profitable strategy, it did test out mettle and made us sweat for 2 days
- DLF - had to do adjustments with 2x margin Capital to eventually come out profitable
- Zee Limited was a bad bad reading of data on my part, in fact a terrible one and it went bonkers. Managed to recover a few points but had to pay the price.
If you think trading is an easy way to make easy money, welcome to reality check.
- Focus on managing your risk and protecting your Capital.
- Have provisions for exit strategy
- Remember Survival is the key
I would like to quote a friend of mine here.... "Bachenge toh Ladenge" (We can stay in market only if we survive)
So Take care & safe trading...!!!
The chart pattern has been identified by my student Harsha. If the idea works, you can thank him for the same.
Do read the disclaimer carefully.
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
- We observe Sun Pharma giving a steep rise in July month end (Pole formation)
- thereafter the stock went in to consolidation phase (Flag formation)
- Now the stock has come out from that consolidation phase
- going forward, on the lower side 780- 760 may provide support
If the stock manages to hold on to 780-760 zone for some time, then 930 / 944 could be a possibility by mid December.
Any dips stock towards 785, could be an interesting proposition to go long in Cash market.
___________________________________________________________________________________________________________
- Looking at the Derivatives Data, prima facie, it looks like 840-865 zone may be difficult to cross in October month
Now that we have understood important levels with the help of charts, F&O trading strategy that may be considered for October month: Iron Condor
Sell 900 Call option
Buy 930 Call Option
Sell 750 Put option
Buy 720 Put option
The strategy would have max profit potential of approximately 12% on margin requirement till October expiry. Any close between 750-900 on 28 October 2021 would give the desired results.
The strategy tries to focus on managing the risk and roughly provides protection for a fall up to 739.50 on the downside. On the upside, any close above 910.50 on 28 October, would not be favorable.
One can Stay alert, if Sun Pharma closes below 760 or above 880. These levels should provide ample scope to exit with less damage / adjust trading strategy, in case view gets invalidated.
Note: Unlike previous months where strategies worked smoothly, September month was a tough one with stock prices moving crazy.
- Tata Steel although followed the red channel in charts to perfection and was a profitable strategy, it did test out mettle and made us sweat for 2 days
- DLF - had to do adjustments with 2x margin Capital to eventually come out profitable
- Zee Limited was a bad bad reading of data on my part, in fact a terrible one and it went bonkers. Managed to recover a few points but had to pay the price.
If you think trading is an easy way to make easy money, welcome to reality check.
- Focus on managing your risk and protecting your Capital.
- Have provisions for exit strategy
- Remember Survival is the key
I would like to quote a friend of mine here.... "Bachenge toh Ladenge" (We can stay in market only if we survive)
So Take care & safe trading...!!!
The chart pattern has been identified by my student Harsha. If the idea works, you can thank him for the same.
Do read the disclaimer carefully.
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
