iCharts Discussions

[Pats]

and this 2nd one is the long....., full 10Y span, see the upper levels of Nifty in last 10Yrs, so for Bulls and bears - both it can be a "To Be or Not To Be" dilemma..

[amitagg]

Dilemma all the time..at 5200..5550...5850...6200 and even if it falls 200 points to 5950 dilemma whether again range 6200-5500 trade OR just a reaction to upmove and further breakout above 6200 to 6500/6900 possible.

[rk_a2003]

Well, I looked at the same chart on Monthly time frame.Look at it for more clarity and for multiple thoughts.This month candle which is still in the making is unique in so many ways(In 10 years) and provide equally favorable arguments for Bulls as well as for Bears.

[Pats]

[vinay28]

[amitagg]

i wrote "Dilemma all the time..at 5200..5550...5850...6200 and even if it falls 200 points to 5950 dilemma whether again range 6200-5500 trade OR just a reaction to upmove and further breakout above 6200 to 6500/6900 possible. "...it just happened today....now what!

[vinay28]

[Pats]

[Pats]

Just for newbees:
Often I think, there must be some safe investment way for the new investors or those investors who has no time to monitor their investments on daily basis or intraday basis. In current situation, we do'nt know which stock may collapse suddently due to Heavy Debt burden ( Dollar denominated - many Metal Stocks for eq. or Rs denominated like Kingfisher ALines etc.).
I wanted some ways not to invest in the all index stocks, so I used NiftyBees - available on NSE. Whenever market nose-dive below certain level, I started accumulating NiftyBees in small chunks - eq 5 qty at a time. I do it now also - i.e. I invest some of my profit earned every mnth here ! So now I have 35 qty NiftyBees avg price @537 !
I also have just 5 qty of GoldBees as well ! When-ever I think market is heading stiff dnward fall, I may encash all, as I always do periodically.

This way, you have your profits/capital locked in safely, at the same time, no worry abt individual company's corporate governance issues/debts and no tension abt Time Decay / Volatilty in options - whichever way market goes ! Another way is - off-course Mutual Funds, for some fees charged by them !
Caution: Current market is already at highs, so buy on sufficient dips in niftybees is much better strategy. As usual, consult your Investment Advisor before investment on any suggestion !

[Pats]

Those newbees, who are interested in the F&O (Future and Options) are often confused abt the terms. In Futures, the investor requires a lot of money to play the game, so we will concentrate on Options only.
Nifty options are far more better than Stock Options, b'cause Nifty options are having plenty of liquidity i.e. lot of buyers and sellers are available, so the investor is not stuck with the trade, but barring a few stocks like RIL, RCOM INFY etc, there can be a big diff. in bid (Buy/Sell) rates.
In buying options, the chances of loss is limited with un-limited profits. But here, I am not explaining the whole tutorial, as lots of F&O utorials are available on the net (may-be in icharts also), but I am trying to explain the importance of Bull Spread!

B'cause in current situation, where Nifty is reached to much higher levels, but we do'nt know, whether market will rise further or slip dnward, but still many expert expect some more steam is left in the bull-run. In such cases, a Bull-Spread may be a better strategy to deploy !

In Bull spread, we expect the Nifty to rise further, but we want to limit our losses and still want to earn some profits, if possible. So to short the concept, we can buy At-The_Money (ATM) or In-The_Money (ITM) call option and sell a higher call option to decrease the risk and at the same time to minimize the invested money. This is called a Bull Spread !

Suppose Taking current (20-09-2013) Nifty value, 6012 as Underlying value, if we buy (ATM) Sept-6000CE 1-lot @90.40 (Close value), then we may sell (OTM) Sept-6100CE 1-lot @39.90 (CV).

So the total investment in Nifty option is now, ( 90.40 x 50 ) 4520 minus ( 39.90 x 50 ) 1995 = 2525 only, intead of 4520.

Now if Nifty goes up, call value of 6000CE will increase more in comparison to the call value of 6100CE, as long as Nifty remains below 6100. And one can encash the diff. btw both the calls as net profit. There are more interesting Bull Spread, Ratio Spread, Ladders etc advance strategies, but this is suffice to put some interest in the Novice Traders, and also newbees may learn what went wrong, when they expect increase in call option value, but instead they see big fall in the CE's value !

Note: Brokerage and Other Charges are not considered to keep the maths simple.
Caution: This strategy best works in the begining days ( first 15 days ) of the mnth/expiry. Also to sell a call, one requires more funds as margin money in the trading a/c.

There is also Bear Spread strategy available for those who expect the other way !

Hope this helps someone !

[Pats]

Although, Chances of Nifty going 6000 or 5700 is equal and OI data today also points to same range. But the confirmed down trend can only be optimized, if Nifty Spot closes below 5750 for the dnward targets of 5680, 5580.

On the other hand, close above 6150, can lead us to 6240, and then towards 6380 onward. And as I mentioned in earlier post, for a sustainable rally, 1 or 2 downward movement towards 5730 and/or 5680 to fill-up the gaps is necessary.

Also note that, upward jerney is always in mm. and cm. but dnward jump can be in mtr. and deci-mtrs ! In 1-2-3 steps, Up-Dn is completed, but if 3rd step - Up is not completed tmr i.e. on 24t, then it can be disastrous, for the Bull Run !

[rk_a2003]

[Pats]

[rk_a2003]

Hi pats,

My shorts were in October NF taken around 6150 and I am in no hurry to book them as I already booked partial profits.

[Pats]