Sunday, February 24, 2013

Friday, February 22, 2013

Trading Plan for 22-Feb-2013

NHPC: CMP = 28.65, looks weak at 29 levels and may give good opportunity to short if it trades weaker around 28.75 level, keeping a stop loss of 29.35 one can short it for a near term target of 28 and 26.50

TCS: CMP = 1450, seems to be struggling to break its 1450-1455 resistance zone. Option data also suggests fresh positions building up in the 1400 PE of Feb & Mar series. Also we see the same kind of activity on the 1450 CE in Feb series. This suggests that CALL traders are writing the 1450 CALL in anticipation of TCS correcting upto 1400 in near term.
Charts suggests that if TCS pulls back from 1450 then it will most likely reach 1350.

Recommendation :
Sell only if TCS trades below yesterdays candle low (i.e. 1440), best shorting opportunity is at 1455-1458 keeping a stop loss of 1462 for a target if 1440-1400

Sell TCS Feb 1450 CE @ 18.00 (lot size = 250)
Option Margin required to short = 72500
Max profit = 18 X 250 = 4500

However if TCS climbs 1462 then it is likely to go upto 1500.

Happy Trading! 

Lawrence Sequeira

Thursday, February 7, 2013

Trading Plan for Feb-2013


JP Associates should take a pause from falling between 70-65. cmp=73.40, mkt lot=4000
ditm pe of 80-85 are seeing unwinding of their positions as volms are high and open int is falling though price is increasing. from the volms we get to see that many ditm traders are already booking their profits.
simple example is ....
ditm 65 ce volm is 2 and open int change for the day is 8000 and ( price change was -3.40) cmp = 9.40
whereas ditm 80 pe volm is 184 and open int change for the day is 8000 and ( price change was 1.75) cmp = 7.85

Kotakbank is at 52 week high, cmp=696, mkt lot=500
Highest open int is seen at 700 ce, volm=223 and chng in opn int=23,000 (total open int=41,000)
680 ce also saw additions in open int with volm=84 and chng in opn int=19,500 (total opn int=39,000) that means previous day the open int in 680 ce and 700 ce was something like this
680 ce = total open int = 39000-19500=19500
700 ce = total open int = 41000-23000=18000
so till prev day 680-700 would hv been looked as resistance.
also interesting thing to note on the pe side is that the 740 pe has added open int from 0 to 12,000 in a single day with volm=24, now why will traders open new positions in ditm pe of 740, do they expect price correcting sharply from here on ? cmp of 740 pe = 50.00
secondly volms of 680 pe were 75 but chng in open int was 20,000 which is almost equal to the chng in open int of 700 ce (with higher volms=223 though), so what does that mean ? are pe being sold or bought ?
at this juncture the safe bet seems to be 'bear call' strategy:
sell 700 ce @ 13 and buy 720 ce @ 6.60 locking in 6.4X500=3,200 profit on investment of 73500/- (70K for margin and 3500 for buying 720 ce). this will give roi% of 4.35%

Happy Trading !!!