Wednesday, October 29, 2014
Sunday, October 26, 2014
NTPC update - will it disappoint bulls once again
Since the last post on NTPC, with specific reference to the OI of 150 CE, it seems the 150 CE writers are not willing to give up, and in fact the OI has increased from 16 odd to 18.72 lakhs.
The levels on the 150 CE chart indicate that the CE can rise to 1.5-1.8 or even 3, which means the stock can cross 150, but as long as NTPC does not cross 153, these CE writers are safe with their written CEs.
Since we are heading into expiry week, this OI becomes even more important, and hence needs to be closely watched.
Those who have bought the CE below 1, can consider booking it near 1.5, but at the same time need to keep an eye on the OI of this CE.
It is possible that the CE might lose in price from 1.5, but the OI too can start reducing.
Another hint can come from OIs of 145PE (OI 3.34 lakhs) and 150 PE (OI 2 lakhs). If these OI figures start going up, NTPC can rise
If this happens, it is worth buying it again below 1.
It is all about the Push from the OIs of the PEs and the pull from the OI of the CEs, and whoever is stronger will win.
To summarise - watch for RISE in OI of 145 and 150 PEs, and also FALL in OI of 150 CE.
If this does not happen, NTPC will once again disappoint bulls, as it has done so many times of late.
If following so many figures is difficult, just wait for updates on Twitter.
Happy trading .....
The levels on the 150 CE chart indicate that the CE can rise to 1.5-1.8 or even 3, which means the stock can cross 150, but as long as NTPC does not cross 153, these CE writers are safe with their written CEs.
Since we are heading into expiry week, this OI becomes even more important, and hence needs to be closely watched.
Those who have bought the CE below 1, can consider booking it near 1.5, but at the same time need to keep an eye on the OI of this CE.
It is possible that the CE might lose in price from 1.5, but the OI too can start reducing.
Another hint can come from OIs of 145PE (OI 3.34 lakhs) and 150 PE (OI 2 lakhs). If these OI figures start going up, NTPC can rise
If this happens, it is worth buying it again below 1.
It is all about the Push from the OIs of the PEs and the pull from the OI of the CEs, and whoever is stronger will win.
To summarise - watch for RISE in OI of 145 and 150 PEs, and also FALL in OI of 150 CE.
If this does not happen, NTPC will once again disappoint bulls, as it has done so many times of late.
If following so many figures is difficult, just wait for updates on Twitter.
Happy trading .....
Monday, October 20, 2014
An old observation on OI on stock options - watch NTPC now
NTPC suddenly shot up in the last hour of trading today.
Looking at the OIs of various CEs, it is seen that 150 CE has the maximum OI (16.08 lakhs).
It has been observed that when a stock rallies beyond the strike price that has the maximum OI, it rallies further for at least another 10%.
Looking at the chart of 150 CE, there is a resistance at 3-3.2.
It can be safely said that once NTPC crosses 153-154, it can rally for another Rs. 15 to say 165-170.
Nothing is certain in the stock market, but it is worth keeping the above in mind and if and when NTPC 150 CE crosses 3.5, you can aim for a target of 15 on it (but trail it, and not wait blindly).
It will also help to keep an eye on how much the OI of 16.08 lakhs reduces, since that will be a big indication of things to come.
Happy trading.....
Looking at the OIs of various CEs, it is seen that 150 CE has the maximum OI (16.08 lakhs).
It has been observed that when a stock rallies beyond the strike price that has the maximum OI, it rallies further for at least another 10%.
Looking at the chart of 150 CE, there is a resistance at 3-3.2.
It can be safely said that once NTPC crosses 153-154, it can rally for another Rs. 15 to say 165-170.
Nothing is certain in the stock market, but it is worth keeping the above in mind and if and when NTPC 150 CE crosses 3.5, you can aim for a target of 15 on it (but trail it, and not wait blindly).
It will also help to keep an eye on how much the OI of 16.08 lakhs reduces, since that will be a big indication of things to come.
Happy trading.....
Thursday, October 9, 2014
"Jara hatke" study
I noticed the triple bottom on SBI on the monthly chart (August, September and October so far), and realised if this bottom holds, SBI can give a good rally.
This made me plot the following chart:
This made me plot the following chart:
This chart is the ratio of BankNifty futures to Nifty futures on hourly time frame.
At present it is trapped in the range 1.9 to 2. A breakout above 2, can take it to 2.1.
These fractions look small, but if you apply the ratio to Nifty, it becomes clear.
8000 x 1.9 = 15200
8000 x 2 = 16000
8000 x 2.1 = 16800.
It might be argued that Nifty futures will not remain static, and this ratio can still remain range bound.
However, it is worth going long in BankNifty when the ratio drops to 1.9, and hold long till the ratio hits 2, and on crossover 2.1.
This can also give good 'Pair trades' for those who do it regularly.
The historic high is 2.15 !!
Friday, September 26, 2014
Nifty at a long term support
The low on Nifty spot is bang on a long term trendline right from where this bull run started.
If this support holds, there can be a rally - whether a pullback rally, or a rally to new high, time will tell (rather options charts will tell).
It makes sense now to hedge shorts, or even take naked longs with 7800 as stop loss, on Nifty spot
If this support holds, there can be a rally - whether a pullback rally, or a rally to new high, time will tell (rather options charts will tell).
It makes sense now to hedge shorts, or even take naked longs with 7800 as stop loss, on Nifty spot
Wednesday, September 24, 2014
Same support, but at a higher level this time
It was mentioned in the post dt 16th September, why the level near 7925 might give support and had said --
"If this region gives support once again, bulls have some hope to make another attempt to conquer the formidable 8150 - 8200 resistance."
Nifty did get the support and did make an attempt to cross the formidable resistance, but failed (in the process made a triple top at 8160 on 3 consecutive days, this top is also a double top on weekly charts now, unless crossed in the next 2 days..unlikely! )
As explained through tweets, this was visible on the 8100 CE which made a double top near 83, and this CE crashed to a low of 2.25 today !
Nifty made a panic low at 7950 today and again hit the 200 hourly moving averages.
8000 CE also hit the support band (tweeted a few times), and went below it briefly in the panic after the SC verdict on 'Coalgate'.
Nifty is now oversold on hourly charts, and with expiry tomorrow, it will be interesting to see if expiry is closer to 8100 or 8000. My guess is, it will be between 8050 and 8075)
It is likely that Nifty might be rangebound next week too (7930--8150)
"If this region gives support once again, bulls have some hope to make another attempt to conquer the formidable 8150 - 8200 resistance."
Nifty did get the support and did make an attempt to cross the formidable resistance, but failed (in the process made a triple top at 8160 on 3 consecutive days, this top is also a double top on weekly charts now, unless crossed in the next 2 days..unlikely! )
As explained through tweets, this was visible on the 8100 CE which made a double top near 83, and this CE crashed to a low of 2.25 today !
Nifty made a panic low at 7950 today and again hit the 200 hourly moving averages.
8000 CE also hit the support band (tweeted a few times), and went below it briefly in the panic after the SC verdict on 'Coalgate'.
Nifty is now oversold on hourly charts, and with expiry tomorrow, it will be interesting to see if expiry is closer to 8100 or 8000. My guess is, it will be between 8050 and 8075)
It is likely that Nifty might be rangebound next week too (7930--8150)
Thursday, September 18, 2014
The bullish Harami has played its part...now what ?
Every candlestick pattern can be called a pattern only if there is a followup action in the next couple of days, and the Bullish harami candle of yesterday got a confirmation straightaway today.
Now, what next? Logically, the previous all time high should now be crossed in coming days.
Below are some facts based on charts of futures and options that can help in managing the long trades.
Firstly, bears can claim that the rally today was just a gap fill (8100 to 8134 was a gap over the weekend) on Nifty futures.
To negate this, Nifty futures has to cross the first hurdle at 8148-8150, which was a double top. There are some resistances above that too.
PCR at 8100 strike price is 0.9 as of now, and this will give further hints.
This has to rise way above 1.2 as soon as possible. This will happen when 8150 is crossed, and also when 8100 CE shorts are covered and at the same time, OI of 8100 PE rises (should go well above 50 lakhs).
Now, what next? Logically, the previous all time high should now be crossed in coming days.
Below are some facts based on charts of futures and options that can help in managing the long trades.
Firstly, bears can claim that the rally today was just a gap fill (8100 to 8134 was a gap over the weekend) on Nifty futures.
To negate this, Nifty futures has to cross the first hurdle at 8148-8150, which was a double top. There are some resistances above that too.
PCR at 8100 strike price is 0.9 as of now, and this will give further hints.
This has to rise way above 1.2 as soon as possible. This will happen when 8150 is crossed, and also when 8100 CE shorts are covered and at the same time, OI of 8100 PE rises (should go well above 50 lakhs).
If all of the above happens in the next couple of days, logical target for the 8100 CE is near 140!! (cmp 68)
So, keep an eye on the OIs of 8100 CE and PE tomorrow to get a hint regarding future price action.
Tuesday, September 16, 2014
Nifty at crucial level
Something for the bulls:
Although Nifty declined sharply today, it is at a critical level on the charts as explained below:
Ever since this bull run started from 5930-40 in February 2014, Nifty has taken support around the 200 hourly moving averages thrice so far, and the low today was again near the 200 hourly moving averages (Simple and exponential).
If this region gives support once again, bulls have some hope to make another attempt to conquer the formidable 8150 - 8200 resistance.
The next 2 days will be very crucial (have I heard this before?).
Ideally, Nifty needs to open with a gap tomorrow and go straight up, since more time spent around these levels will be an invitation to more bears.
The 8100 CE hourly chart also shows how the panic low was bang on a previous low near 15 today.
One overnight hint will be available from the India ETF - INDY in the US markets. INDY gapped down today to 29.68 to fill a gap. If it closes above 30, it indicates that bulls have some fight left in them.
So, watch where INDY closes when you get up tomorrow.
INDY hourly chart :
Although Nifty declined sharply today, it is at a critical level on the charts as explained below:
Ever since this bull run started from 5930-40 in February 2014, Nifty has taken support around the 200 hourly moving averages thrice so far, and the low today was again near the 200 hourly moving averages (Simple and exponential).
If this region gives support once again, bulls have some hope to make another attempt to conquer the formidable 8150 - 8200 resistance.
The next 2 days will be very crucial (have I heard this before?).
Ideally, Nifty needs to open with a gap tomorrow and go straight up, since more time spent around these levels will be an invitation to more bears.
The 8100 CE hourly chart also shows how the panic low was bang on a previous low near 15 today.
One overnight hint will be available from the India ETF - INDY in the US markets. INDY gapped down today to 29.68 to fill a gap. If it closes above 30, it indicates that bulls have some fight left in them.
So, watch where INDY closes when you get up tomorrow.
INDY hourly chart :
Thursday, September 4, 2014
Nifty reversal ?
Nifty is overbought on hourly, daliy, weekly and monthly timeframes (stochastics above 95)
Nifty daily candle formed a DOJI yesterday (at the top), and is now trading below yesterday's low.
This can be a potential reversal.
How can this be traded now?
Buy 8000 PE on dips, with sl below recent low (42.5), for a possible T1 of 100.
If this PE crosses 120, 150 is also possible.
Nifty daily candle formed a DOJI yesterday (at the top), and is now trading below yesterday's low.
This can be a potential reversal.
How can this be traded now?
Buy 8000 PE on dips, with sl below recent low (42.5), for a possible T1 of 100.
If this PE crosses 120, 150 is also possible.
Happy trading !!
ITC trade (360 CE)
ITC is holding up well in this fall, and can move up.
A low risk trade is to buy 360 ce on dip near 2.5, with SL below 2,
Targets 6 - 10-12
Happy trading !!
A low risk trade is to buy 360 ce on dip near 2.5, with SL below 2,
Targets 6 - 10-12
Happy trading !!
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