Nifty Key levels for day traders

[trader.trends]

Added a third element to this

shorted 5100 put of April at 82...

now position held :
5100 put april short at 82
5200 put March short at 22
5200 put April long at 102


can anyone explain what my possible What-if scenario are..?

You have a April debit put spread costing you 20/- with a max profit of 80/-. Good RR 4:1. If we head towards 5100 you reap the max benefit from this but you will lose 80/- on your March shorts if we hit 5100 at expiry. So essentially at 5100 you end in a no profit no loss zone. If we tank below 5100 you are in serious trouble as you lose on the March short put. That seems unlikely as of now. If we head beyond 5200, say towards 5300, you gain 20/- on the March short but lose 20/- on the April shorts. So no gain if we shoot past 5200.

Net net no gain no loss as of now. Don't know what's swirling in your mind to alter the position. OR have I been slow on the uptake on your plan and missed the obvious?

Gregory (Scotland Yard detective): "Is there any other point to which you would wish to draw my attention?"
Holmes: "To the curious incident of the dog in the night-time."
Gregory: "The dog did nothing in the night-time."
Holmes: "That was the curious incident."

 

[simple_trader]

Today's candle seems to be a short term reversal. Swing basis till 5282 NF is crossed better to play for down side. Do not know how far it can go. If it completes proper retracement, then support is around 5050 NIFTY.

For day trading, tomorrow, if we are unable to cross today's high 5259, better to play for down side.

NIFTY resistance for tomorrow is around 5240 NF.

RIL 30 mins TF support is around 1070.

happy trading!

regards

 

[linkon7]

You have a April debit put spread costing you 20/- with a max profit of 80/-. Good RR 4:1. If we head towards 5100 you reap the max benefit from this but you will lose 80/- on your March shorts if we hit 5100 at expiry. So essentially at 5100 you end in a no profit no loss zone. If we tank below 5100 you are in serious trouble as you lose on the March short put. That seems unlikely as of now. If we head beyond 5200, say towards 5300, you gain 20/- on the March short but lose 20/- on the April shorts. So no gain if we shoot past 5200.

Net net no gain no loss as of now. Don't know what's swirling in your mind to alter the position. OR have I been slow on the uptake on your plan and missed the obvious?

I am treating it as a combo of 2 strategies:

a. long 5200 put April and short 5200 put March make one pair (calender spread) with short 5100 put April acting as the third wheel

b. long 5200 put April and short 5100 Put April makes one pair (bearish Put spread) with short 5200 put March acting as the third wheel


Possible What-if scenario : I
1. We open gap down to 5180 and go below that..
2. We open gap down to 5180 and pull up above 5200...
3. We open gap down to 5150 and go below that...
4. We open gap down to 5150 and pull up to 5180...
5. We open gap down to 5150 and pull up to 5200...
6. We Open above 5200 and stay flat...
7. We open above 5200 and then Sell off to 5180...
9. We Open above 5200 and then slowly rise to 5225....
10 we Open gap Up above 5225 and sell off to 5200....
11 We Open gap up above 5225 and rise or stay flat....

Now if i have a answer to all these scenario... market wont be able to surprise me.... Thats my home work...

Now the question is, how would you adjust these positions... to maximum benefit...?

 

[AW10]

now position held :
5100 put april short at 82
5200 put March short at 22
5200 put April long at 102

can anyone explain what my possible What-if scenario are..?

Linkon, I was shocked by last stmt above ?It is your position, and you shd be knowing the what-if outcomes from this. So I am interpreting it as
"can others show their views on it ?" and sharing my views here..

I looked at some of your prev posts to check your view about mkt and as I understand, you are mildly bearish in short term. With all FII /India rating etc, u seems to be bullish on longer term. Hence I am making my observations here. You have already got a view from TT who analysed the strategy from vertical spreads perspective.

1) 5200 Calender Spread (buy 5200 april put, and sell 5200 mar put) is something that u created first. It is mkt neutral and should be able to give u 22 rs of premium by month end. Assuming, due to volatlity increase (which is likely, if we fall), 5200 April Put does not increase at faster pace.
So, what ever is the case, treat it as Calender spread and don't worry about the mkt drop.

2) Considering your short term bearish view, I fail to understand, why would one go for naked short put, in bearish market and invite the disaster.
As you are slightly bullish on longer term, 5100 apr short put fits with that view. But keep in mind that it is naked short put and hence any surprise crash can hit hard.
So if mkt is nice to you and it behaves nicely till expiry, then you will gain some time decay of 4 days on it. But any 40 points move in nifty is sufficient to eat away that 20 points profit due to timedecay.

3) Maybe on the day of expiry, depding on mkt conditions, you might like to adjust the position and convert this naked short to Bearish Put Debit Spread of 5100-5200 April.
or create 5000-5100 Bullish put Credit spread by buying 5000 put as protection.
Wednesday being holiday, it would be better to manage the high risk of naked short trade in advance. All markets globally are overdue for correction and it can happen at anytime. And IMO, biggies, FII are in no hurry to buy on the same or very next day of announcement.

This is assuming that you have slightly long term holding horizon for this trade. If it is short term trade, then probably all above may not make any sense.
Hope this helps.

PS - while I was writing my post, realised that u have already made one post. So please read my post in right perspective.


Happy Trading

 

[linkon7]

Linkon, I was shocked by last stmt above ?It is your position, and you shd be knowing the what-if outcomes from this. So I am interpreting it as
"can others show their views on it ?" and sharing my views here..

I looked at some of your prev posts to check your view about mkt and as I understand, you are mildly bearish in short term. With all FII /India rating etc, u seems to be bullish on longer term. Hence I am making my observations here. You have already got a view from TT who analysed the strategy from vertical spreads perspective.

1) 5200 Calender Spread (buy 5200 april put, and sell 5200 mar put) is something that u created first. It is mkt neutral and should be able to give u 22 rs of premium by month end. Assuming, due to volatlity increase (which is likely, if we fall), 5200 April Put does not increase at faster pace.
So, what ever is the case, treat it as Calender spread and don't worry about the mkt drop.

2) Considering your short term bearish view, I fail to understand, why would one go for naked short put, in bearish market and invite the disaster.
As you are slightly bullish on longer term, 5100 apr short put fits with that view. But keep in mind that it is naked short put and hence any surprise crash can hit hard.
So if mkt is nice to you and it behaves nicely till expiry, then you will gain some time decay of 4 days on it. But any 40 points move in nifty is sufficient to eat away that 20 points profit due to timedecay.

3) Maybe on the day of expiry, depding on mkt conditions, you might like to adjust the position and convert this naked short to Bearish Put Debit Spread of 5100-5200 April.
or create 5000-5100 Bullish put Credit spread by buying 5000 put as protection.
Wednesday being holiday, it would be better to manage the high risk of naked short trade in advance. All markets globally are overdue for correction and it can happen at anytime. And IMO, biggies, FII are in no hurry to buy on the same or very next day of announcement.

This is assuming that you have slightly long term holding horizon for this trade. If it is short term trade, then probably all above may not make any sense.
Hope this helps.

PS - while I was writing my post, realised that u have already made one post. So please read my post in right perspective.


Happy Trading

Aw-da,
My assessment of the scenario and the next actions are as follows:

legs held :
Short 5200 put March @ 22 CPM : 29
Long 5200 put April @ 102 CPM : 118
Short 5100 put April @ 82 CPM : 83


If we do see a sell off, then 5200 put march will be compensated by 5200 put April. The m2m loss on 5100 can be arrested by shorting NF near the 5112 (20 ema on EOD).

If we end the series above 5200, then the 5200-5100 April spread becomes free as 5200 march expires worthless (102-82-22 = -2)

I'll still attempt to job down the price and so far my next line of action are as follows :


Possible What-if scenario :
1. We open gap down to 5180 and go below that..
Action : Add 5200 Put April

2. We open gap down to 5180 and pull up above 5200...
Action : [/B] No action Required

3. We open gap down to 5150 and go below that...
Action : Short NF

4. We open gap down to 5150 and pull up to 5180...
Action : No action required

5. We open gap down to 5150 and pull up to 5200...
Action : No action required

6. We Open above 5200 and stay flat...
Action : No action required

7. We open above 5200 and then Sell off to 5180...
Action : Add 5200 put April

8. We Open above 5200 and then slowly rise to 5225....
Action : No action required

9. we Open gap Up above 5225 and sell off to 5200....
Action : Close 5200 put March

10 We Open gap up above 5225 and rise or stay flat....
Action : No action required


Expectations : Worst case we gap down to 5180 to 5150 and then pull up. Some amount of profit booking was on the cards and RBI's rate announcement on friday evening provided the trigger. The whole day we witnessed attempt to hold on to the 5225 (34 ema on Hrly chart), the selling pressure was visible in the last 2 hour. The premium on NF has reduced to 1 point. If 5200 levels are held for the better part of the trading day then we will make attempt to go back to the 5250 mark.

 

[AW10]

Thats Great Linkon. Seems you are fully prepared for various scenarios.

If we do see a sell off, then 5200 put march will be compensated by 5200 put April. The m2m loss on 5100 can be arrested by shorting NF near the 5112 (20 ema on EOD).

If we end the series above 5200, then the 5200-5100 April spread becomes free as 5200 march expires worthless (102-82-22 = -2)

This is what a swing traders would do with this position and stay peacefully.
Only 1 decision/ action is required at 5112 level.

Possible What-if scenario :
1. We open gap down to 5180 and go below that..
Action : Add 5200 Put April

2. We open gap down to 5180 and pull up above 5200...
Action : [/B] No action Required

3. We open gap down to 5150 and go below that...
Action : Short NF

4. We open gap down to 5150 and pull up to 5180...
Action : No action required

5. We open gap down to 5150 and pull up to 5200...
Action : No action required

6. We Open above 5200 and stay flat...
Action : No action required

7. We open above 5200 and then Sell off to 5180...
Action : Add 5200 put April

8. We Open above 5200 and then slowly rise to 5225....
Action : No action required

9. we Open gap Up above 5225 and sell off to 5200....
Action : Close 5200 put March

10 We Open gap up above 5225 and rise or stay flat....
Action : No action required

This is what only a fast action trader like you can do (read it as +ive comment). Pretty detailed plan. 4 decision points and 4 possible actions
- 6 out of 10 situations, no action required
- 2 situation, buy April 5200 PUT
- 1 case Short NF
- 1 case squareoff March 5200 PUT.

How about comparing the performance of both approach and seeing the reward to effort ratio at sometime in after the trade is closed ?
And analysing which one fits your short term goals and long term goals of life.

All the best with this trade and Keep up the right trading practice.

Happy Trading

 

[simple_trader]

Today's candle seems to be a short term reversal. Swing basis till 5282 NF is crossed better to play for down side. Do not know how far it can go. If it completes proper retracement, then support is around 5050 NIFTY.

For day trading, tomorrow, if we are unable to cross today's high 5259, better to play for down side.

NIFTY resistance for tomorrow is around 5240 NF.

RIL 30 mins TF support is around 1070.

happy trading!

regards

Let me add one more thing here. Frankly I am adding this after seeing SGX NIFTY current price and it is applicable for day trading.

In case NF is able to sustain above 5240 today, one needs to be careful in holding short. NIFTY may scale to 5300-5320 odd level in that case.

Happy trading!

regards

 

[simple_trader]

NIFTY remained below 5240 NF and is under pressure so far.


For closing today, 5240 NF still remain the strong resistance. In case, we cross this in 2nd half, my sense NIFTY will cross 5300 (do not know it will cross resistance or not).

RIL may have potential to move up more.

Interesting trade ahead in the day.

Happy trading!

regards

 

[simple_trader]

NIFTY could not cross the intraday resistance level 5240 NF.

RIL though made new intraday high towards the end.

my Sense RIL may be still having up side before it corrects.

anyway, tomorrow is holiday. take a fresh view on Thursday.


regards

 

[simple_trader]

It is difficult to comment on intraday moves on expiry day. It looks weak to me in intraday so far. It would be down till it trades below 5225 NF.


Down side momentum is not that high to trade either.


happy trading !!

regards