Bullish Divergence in Nifty Day Chart, but still below zero line.

Bullish Divergence in Nifty Day Chart, but still below zero line.

Time: 3:55 am
Banknifty
·                    
It has formed bullish divergence.
·                    
MACD signal is still below Zero line.
·                    
It is below 200 DMA (18100).
·                    
Volume is getting picked up right now.
·                    
Long positions have been maintained in all index heavy weight
stocks.
·                    
PNB has formed bullish hammer pattern.
·                    
There was an aggressive long position in south indian bank.
·                    
Let us start with selling PE first till it goes over 200 DMA and
above zero line.
Nifty
·                    
Clearly Nifty has formed Bullish Divergence Pattern. Attached
the chart.
·                    
However volume is not great and MACD signal is still below Zero
line.
·                    
It is below 200 DMA (8250).
·                    
Volume is getting picked up right now.
·                    
FII is in sell side yet. Good time to create short straddle,
Premium is not attractive.
·                    
Long positions have been maintained in all index heavy weight
stocks.
·                    
Since we have mixed review, it is better to sell PE than going
long in Nifty.
·                    
Index heavy weight stocks ITC and Reliance Industries are going
up with volume.
·                    
CEAT, ITC and RELINFRA also had formed bullish Divergence with
good volume.
My Position & Trading Plan
·                    
Huge margin is blocked each time I hedge SBI long positions with
multiple CEs.
·                    
Exited SBI long.
·                     Exited Banknifty shorts and respective hedging.
·                    
Since Market had formed bullish divergence, I sold out naked
18000 PUT.
·                    
If it comes down I will sell 18000 CALL.
·                    
Sold out 18800 CE and 16500 PE
·                    
Will sell more PE and CE in coming days.
·                    
I don’t have any contract in current month to get rid of gamma
affect.

Open Positions(5) Historical Download

Product
Instrument
Qty.
Avg.
price
LTP
P&L
Chg.
NRML
BANKNIFTY17JAN16500PE NFO
-200
0.00
45.05
+4320.00
NA
NRML
BANKNIFTY17JAN18800CE NFO
-80
0.00
59.00
-1116.00
NA
NRML
BANKNIFTY17JAN18000PE NFO
-40
0.00
380.00
+5206.00
NA
NRML
USDINR17JAN69.5CE CDS
-5
0.0000
0.0750
-137.50
NA
NRML
CRUDEOILM17JANFUT MCX
-2
3,567.00
3,671.00
-2080.00
+2.92%
TOTAL
6,192.5

 

Jegathesan Durairaj, a mathematician by qualification, an Ex-software professional and now a full time Risk Defined Option Writer. With his Open Book Strategies, he is the most known identity in twitter as itjegan, with huge followers. He had won Zerodha 60 Day Challenge – 10 Times round-the-clock. He is one of the prime Option Writing Trainer and tutored close to 1000 members till now.

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