Money making ideas for the current
week starting from 15th May 2023
A good entry opportunity to buy Nifty
Background: Nifty has fallen by
112 points today i.e. on 16th May 2023, Tuesday and closed at
18,286. This could be the retest of the breakout from double top on Nifty
weekly chart. If we look at the Nifty weekly chart attached below, Nifty’s high
during the week starting 2nd January 2023 and 2nd May
2023 was 18,252 and 18,268 respectively. It should be noted that today’s fall was not
backed by any FII selling as their net cash buying figure for the day was Rs 14
billion. DIIs did some profit booking by selling shares worth Rs 9 billion. Moreover,
today’s fall in Indian equities was isolated and not due to any weakness in
global stock markets. Nifty was dragged down mainly by the HDFC twins, which
were down owing to the ex-dividend effect.
Actionable point: Traders who are
already long should continue to maintain their positions with stop loss of
18,200 on closing basis. Also, the current fall may be used to initiate fresh
long positions with minimum target of 18,500 in the next few days. Long
position could mean buying in futures and also hedging it by buying 18,200 put
option. The other options are to sell put options with strike prices below
18,200. Conservative traders may opt for call ratio strategy by buying 18,300
call options for the May series and selling 18,600 and above strikes of call
options.
Update on the strategy given in
the previous week i.e. week starting 8th May 2023: It was suggested that
option sellers can consider selling Bank Nifty 41,500 PE for the monthly expiry
and earn a total premium of around Rs 4,500 for one lot as the price then was
Rs 180. The price has now come down to Rs 25. So, the bulk of the profit has
been captured now. It is advisable to book profit by squaring off the put
option sold.
Further adjustments and stop loss levels: Watch out for the
next updates to know more about further adjustments and stop loss level. For
further details, write to us in the comments section below.
DISCLAIMER: This article and any other material on the
website is only for educational purpose and to demonstrate that positive
results can be achieved if one does a deep study of the markets. Kindly do not
blindly take positions based on above content without consulting your financial
advisor and without proper risk management. We are not SEBI registered advisor.
