Nifty: Is this a Buy in dips opportuinity
Nifty
Earlier we were expecting Nifty to do a sub 14000 level. In that post we had highlighted that Nifty has a chance of bouncing back towards 14655. Well the bounceback has been much more than that and today despite we seeing a big dip in Nifty, it is so far trading well above
- 20 day EMA at 14648 &
- 50 day EMA at 14622 currently
Trading above the EMA changes the structure and So far as Nifty stays above the 2 EMAs Nifty may be considered as a Buy on dips opportunity.
Exit if closing is below the EMA
Given the set up,
Strategy that can be deployed
Consider
Selling Nifty 06 May expiry 14400 Put option around 70
Lot size 75
Max profit potential in strategy Rs 5250 per lot.
The strategy gives a decent return potential
But More importantly the strategy provides Risk cover for a fall in Nifty price up to 14330 giving ample scope and time to exit with less damage in case Nifty moves otherwise.
Take care & safe trading...!!!
Disclaimer:
- The view expressed here is my personal view
- Past performance is not a guarantee for future predictions
- Use this for educational purpose
- Any decision you take, you need to take responsibility for the same
- It's your hard earned money. Treat it wisely
- Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance
- if trading in F&O, understand that F&O trading involves risk
- Do take proper risk management measures
- Do your own analysis and consult your financial adviser if need be
Earlier we were expecting Nifty to do a sub 14000 level. In that post we had highlighted that Nifty has a chance of bouncing back towards 14655. Well the bounceback has been much more than that and today despite we seeing a big dip in Nifty, it is so far trading well above
- 20 day EMA at 14648 &
- 50 day EMA at 14622 currently
Trading above the EMA changes the structure and So far as Nifty stays above the 2 EMAs Nifty may be considered as a Buy on dips opportunity.
Exit if closing is below the EMA
Given the set up,
Strategy that can be deployed
Consider
Selling Nifty 06 May expiry 14400 Put option around 70
Lot size 75
Max profit potential in strategy Rs 5250 per lot.
The strategy gives a decent return potential
But More importantly the strategy provides Risk cover for a fall in Nifty price up to 14330 giving ample scope and time to exit with less damage in case Nifty moves otherwise.
Take care & safe trading...!!!
Disclaimer:
- The view expressed here is my personal view
- Past performance is not a guarantee for future predictions
- Use this for educational purpose
- Any decision you take, you need to take responsibility for the same
- It's your hard earned money. Treat it wisely
- Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance
- if trading in F&O, understand that F&O trading involves risk
- Do take proper risk management measures
- Do your own analysis and consult your financial adviser if need be
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