Global cues:
•
U.S. stock markets opened mixed on Monday,
losing premarket gains amid ongoing uncertainty about the latest stimulus bill
to be prepared by Congress.
•
Gold hit a new all-time high while silver
surged to its highest level in seven years.
Indian markets:
•
Nifty ended lower on Monday;
Nifty Banking fell 3.5% while Nifty Fin services was down by 2.4%
•
Nifty was majorly dragged by
selling in Banking stocks after a report by RBI over possible rise in NPAs in
FY21 due to rise in debt amid pandemic.
•
Shares of YES Bank were
locked in 10% lower circuit at Rs 12.30 on BSE
•
FIIs were net sellers of worth Rs.453.31 Cr and DIIs were net sellers of worth Rs. 977.88 Cr.
•
Nifty IT and Nifty Metal were
the only 2 sectors in green.
•
Gold Financiers Muthoot Fin
and Manappuram Finance gain as gold hits record high.
•
Share price of brokerage
firms shed 5-9% in the afternoon trade on rumours of development of Direct
Market Access system (DMA) by SEBI
•
Reliance Industries continue
to hit record high; stock ends 0.5% higher at Rs. 2156
•
The contribution chart for
Nifty is shown below:
Trends:
•
Nifty formed a bearish belt
hold candle as it made an opening high and witnessed selling pressure during
the session.
•
Nifty has gone sideways
suggesting indecision by most traders
•
If nifty stays in the upward
rising channel and maintains its short-term trend, a mild corrective action or
ranged consolidation cannot be ruled out. However, shoring aggressively is not
recommended as a lot of discomfort is visible at lower levels.
Option strategy for tomorrow:
•
Nifty
is expected to be rangebound for tomorrow.
•
If
Nifty opens at a gap up, wait for the trend but if market opens flat or at a
gap down, chances of a downward trend
•
One
should short only if market goes below 11080 level.
•
Bank Nifty to remain
weak for tomorrow.
•
Upside resistance is at
11200 & 11290 levels
•
Downside support is at
11060 & 11000 levels
•
Maximum
call OI of 45.17 lakh contracts was seen at 11,500 strike which will act as
crucial resistance for tomorrow
•
Maximum
put OI of 41.2 lakh contracts was seen
at 11,000 strike which will act as crucial support for tomorrow
•
Investors should remain stock
specific and keep accumulating only quality stocks in this scenario. Avoid
buying on minor repairs, buying on dips should be on large support such as
10900 0r 10800 levels.
Stock
recommendation:
•
RIL has been moving upwards
and reached an intraday levels of 2,200. With results around the corner expect
the stock to test 2,180 levels
•
Cipla showed some weak
structure on Monday. The stock can see some selling pressure during the Tuesday,
and come to around 640 levels
•
Sun Pharma showed formation
of strong bearish candles on last hour of trade on Monday. Expect the stock to
test 467 levels on Tuesday
•
Jindal Steel showed some
bullish movement all through the day. The stock went up 5% on an intraday basis
expect some buying and movement to 180 level.
Results
on July 23
UltraTech
Cement, Nestle India, IDBI Bank, IDFC First Bank, RBL Bank, Castrol India, NIIT
Technologies, Sunteck Realty, Welspun Corp.
Knowledge Capsule: Option Strategies- Short Strangle
View:
Range Bound Movement (we expect Nifty move
to make smaller moves either up or down)
•
Implementation:
•
Buy 1 OTM Put option
•
Buy 1 OTM Call
option
Take Nifty current price : 7921
Buy 8100 CE option (ATM) @ 32rs
premium (Pay 32)
Buy 7700 PE option (ATM) @ 28rs
premium (Pay 28)
We will pay (net 32+28=) Rs. 60 premium
Now let's take 3 scenarios
1.
Nifty expires at 7500
8100 CE would be zero
7700 PE would be 200rs, payoff = 200 Profit
Net payoff = 200-60 = 140 Profit
2.
Nifty
expires at 7700,7900,8100
Both options will be zero
Net payoff = 60rs Loss
3.
Nifty expires at 8300
7700 PE would be 0
8100 CE would be 200, payoff = 200 Profit
Net payoff = 200-60 = 140rs Profit
As we can notice,
The Max Loss is limited, maximum between the 2
strike prices, so the risk is managed In this strategy and is quite easy to
trade.
In the above table, you can check the payoff at all
expiry prices. Notice our profits are unlimited on either side.
Disclaimer
Please note that all the recommendations/views/ levels we provide are based on the theory of technical/fundamental analysis and personal observations. This does not claim for sure/ certain profit or any fixed returns. we are not liable for any losses you make on the given takes and levels. You are advised to take your position with your sense, discretion, and judgment. only you would be responsible for outcomes of your trades
Analysts at work:
No comments:
Post a Comment