In this newsletter read about how to trade Nifty and details of my last trade in Nifty Options
Last week I had indicated at a relief rally which has come about and still sustaining. World markets traded mostly in green in last week.
Technical Overview: Last week Nifty made high of 7907 and low of 7714. A range of 193 points. A bullish engulfing pattern is formed on Nifty weekly chart. This pattern suggests reversal of a down trend.
As I had suggested last week, Nifty bounced from its support. This week we expect further up-move in Nifty. However this up-move is just a correction in ongoing down-trend.
Nifty has resistance near 7926-8002 area.
We are in F&O expiry week. Markets are expected to trade choppy with small moves. This scenario does not give trading opportunities. Better to stay away trading Nifty in Futures.
However one can trade this Iron Condor Trade:
Time frame till expiry. Returns expected 1.2%. Risk 1%.
Buy Nifty 8100 Call
Sell Nifty 800 Call
Sell Nifty 7800 Put
Buy Nifty 7700 Put
I feel, after reaching its resistance (7926-8002), Nifty can move down to retest the bottoms once. Be prepared for that down move.
Let me discuss a very successful trade which I and my paid subscribers had taken this month. (I had briefly mentioned about this trade in last week's newsletter)
I had traded Nifty short strangle. The trade was taken on 6th Nov and exited on 19th Nov. This trade has made us profit of 3202 per Lot. Margin required for trading this strangle is 66000. So the trade earned returns of 4.8% in 13 days. In couple of days I will explain in on my blog why & how did I trade this Strangle.
I run trading portfolio in Options (in which trades like one explained above are taken) for conservative traders 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.
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