Let me start this letter by wishing you all on the occasion Diwali.
Wish you all a very Happy, Healthy and Wealthy Diwali
In my last letter I had indicated at bearish sentiments. Nifty moved down by 150 points in last week.
I had also indicated Nifty upside capping at 8300. Now, one can bet on Nifty trading below 8300 in this month.
Technical Overview: Last week Nifty made high of 8116 and low of 7926. A range of 190 points. This is small range. This small range near support area of 8000 (as written in last letter) is indicating that the fall can pause/stop here.
Markets never move one way down or up. After continuous fall for last 8 trading sessions, let's expect Nifty to pause. A support emerges at 7930. Nifty can see some bounce from current level. However upside is capped at 8230-8330 level.
This means Nifty can trade in a broad range 7800-8300.
Let me know (In comments below) what do you feel about this Nifty range? (nifty chart is attached below)
Nifty trading in range is good opportunity to make money by trading Option Strategies.
Take this opportunity to trade Nifty Short Strangle of 7800 Put & 8300 Call . To hedge this trade Buy Nifty 7600 Put and 8500 Call.
Total Premium you get in this trade is 62. Margin Utilized is 90000. Has potential max 5.1%. One can exit trade if you are getting gain of 3% in say 8-10 trading sessions.
Don't you feel that trading for 3-5% returns per month can make lot of money in few year? Let me have your opinion in comments below.
I run trading portfolio in Options for conservative and comparatively safer returns of 3-5% per month. I use hedging strategies as one mentioned above to generate relatively safer returns per month. Click here to read more about "Index Options" portfolio. Click here for Index Options Performance.
My another portfolio is for traders who prefer to trade in Futures. I give Swing recommendations for this portfolio. To check this one click here.
For any query write back in comments below, I will try to answer to the best of my ability.
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