SH's MArket Correction Prediction Strategy

[crusader]

100EMA touched. Time for a 5600 Straddle?

 

[amol_gh123]

It looks like Nifty might close above 100 EMA ... If this happens, SH should we consider buying 5700 or 5800 Calls and not puts.... Please confirm.

..Amol

 

[abhi_neth]

Dear Sh sir,

Now 100ema 5575 which is better option. Option are as follow:

1.) BUY NIFTY JULY 5500 CE & PE
2.) BUY NIFTY JULY 5700 CE & 5500 PE
3.) BUY NIFTY JULY 5800 CE & 5400 PE

please do needful,

In my opinion NIFTY JULY 5700 CE & PE would be ideal, would wait for seniors to confirm.

 

[crusader]

I think it is a question of wether to go with a strangle or a straddle. Strangles cost lesser than a straddle. Apart from this, I don't know enough of options to comment on which is better. But somewhere in TJ there was a comment on preferring ATM/ITM options than OTM ones. Maybe some options guru will comment on this.

Last time (May) I took 5700 straddle and closed out calls and held on to puts giving somewhere around 40% returns. So, I am looking at either 5600 or 5700 straddle.

 

[Tradewithhunter]

Hi SH,

Just come across below attached scenario took place on 27-Jan-2010. The bar on 27-01-2010, closed firmly below 100 EMA. If we would applied our new rules, we might have bought puts than calls, but after that day market went up again to touch 100 EMA. And then again breakdown almost 200 points.:annoyed:

How could we handle such scenario then.

Regards,
Amol.

Yes NF closed below 100 EMA around 4850 range ... you buy puts ...hold until 100 EMA closes above 100 EMA ... which doesnt happen.... nifty crashes a further 200 points next week ... you book sweet profits in puts and enjoy ...

Whats there to worry? In any case there is no gurantee that whipsaws wont happen...

Cheers
SH

 

[amol_gh123]

Yes NF closed below 100 EMA around 4850 range ... you buy puts ...hold until 100 EMA closes above 100 EMA ... which doesnt happen.... nifty crashes a further 200 points next week ... you book sweet profits in puts and enjoy ...

Whats there to worry? In any case there is no gurantee that whipsaws wont happen...

Cheers
SH

Thanks SH. I understand there is no method by which one can avoid whipsaws completely.

Anyway, 100 EMA touch happened today. Just curious to know, whether you
traded any options.

..Amol

 

[bhurasandip]

Yes NF closed below 100 EMA around 4850 range ... you buy puts ...hold until 100 EMA closes above 100 EMA ... which doesnt happen.... nifty crashes a further 200 points next week ... you book sweet profits in puts and enjoy ...

Whats there to worry? In any case there is no gurantee that whipsaws wont happen...

Cheers
SH

SH,
Can,t understand "Hold until 100ema close above 100ema".
Plz explain.
With respect to today's scenerio which was better option & why :-
1) Buy 5700 ce & 5500pe for july series.
2) Buy 5600ce & 5600pe for july series.
THANKS.

 

[VJAY]

I bought 5500pe & 5700 ce......Lets wait for action

 

[yashodhan]

I bought 5500pe & 5700 ce......Lets wait for action

I bought 5600 straddle. Cost Rs. 220/=

 

[Tradewithhunter]

Not sure if anyone traded the 3 EMA reversal on Friday ... worked beautifully and Nifty closed in red on Friday even when world markets were green !!

Thats the power of 3 EMA

Cheers
SH