Thursday, October 11, 2012

Trading Plan for 11-Oct-12

Here is the recommended Trading Plan for 11-Oct-12:

Mkt to remain sideways as there is a 4-wave swing seen on india vix daily
charts.however keep a watch on vix values ... if it crosses 17.80 it is likely
to reach 18.80-19 and hence beneficial to go long on ATM PUT options.
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Nifty seem to hv support at 5610 levels and should take some pause. todays
closing was 5652 with days low of 5647. Expecting another 30-40 points
correction on nifty and then a pause. if it is unable to stop at 5600-5610
level then the next support is seen way down at 5450. which is abt 200 pts
down. look for opportunity to buy 5600 PE or short 5700 CE.
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BankNifty: Breakout failed, correction is likely to remain strong till it
reaches 11200 and then 10900. Watch for buying 11000 PE or short 11200 CE.
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IVRCL has seen big correction today and it has reached its halt point of 43.30
if it breaks this too then we can expect it to touch 40.30 which is the next
support.
However the option data is suggesting some different picture...
Highest trading was seen on OTM CALL options and the resistance is seen at 50
strike price on the OTM CALL option side.
45 PE is with highest open interest indication that the stock is unkiley to go
anymore further down. Trading activity on the PUT side reveals that there is
marginaly higher trading volm seen at 45 PE strike alongwith highest addition
on open ineterest as compared to other PUTS. This may be seen as new traders
who have opened fresh long postions in the PE maybe in for a surprise - if the
stock bounces back in tmrows trade and secondly if todays CALL option data is
anything to go by.
For tmrow: look for buying 50 CE @0.40 (Mkt lot = 4000), tgt = 1.00
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NHPC: bearish move to continue till the stock corrects upto 19-20 price range.
CMP is 20.85 with days low of 20.75
if tmrow NHPC is unable to trade above 21 price area then it is very likely to
correct to 19-20 area very soon.
good opportunity to buy 20 PE @ 0.35 (mkt lot = 10000) tgt 0.75
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Cash Mkt: FSL (firstsource soln) buy at cmp of 12.15 tgt 15 stop loss 10, Qty = 250
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Cash mkt: Raj oil mills: may bounce back, heavy climatic selling seen. buy if
it trades abv 6.30 for tgt of 8.0, keeping stop loss of 5.5, Qty = 500
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Dish TV: Bearish tills it corrects upto 75. Look for shorting this stock at
cmp of 80-85.
Buy 70 PE @ 0.30 (mkt lot = 4000) for tgt 0.75
option data shows classic example of how the calls are being sold to retail
investors as new open interest is shown as added and secondly the support
which is currently at 80 as per the option data is shown shifting its gear to
70 region, open interest is seen being unwound from the 80 region...though the
stock was weak today, why did this happen?....it is a clear sign of further
weakness in the stock - which may correct upto 75-70 region very soon.
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Apollo tyres: reaching its support region of 80-84. Look for buying
opportunities.
Buy 95 CE @ 0.75 (mkt lot = 4000) tgt 2.00

Wish you all profitable trades !!!

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Warm Regards,
Lawrence Sequeira
Proprietary Trader & Trainer (Equities & Derivatives)