Thursday, October 29, 2009

Big boss is watching you

men says:
"yesterday you said we could see 4550 and today you said buy nifty @ 4800 for a PROBABLE target of 4925, how come change in view in one day, could you please clarify."

My Notes:
It is nice to know that I am closely watched on TV. I am giving a chart for the Nifty (at the end) which highlights the significance of the 4550 zone. This zone has acted as support / resistance many times earlier. I referred to this support when talking with Mitali on Tuesday afternoon as the Nifty was falling.

On Wednesay morning, I provided a day trading call on the Nifty. It seemed that a small relief rally was possible hence the buy call with probable targets and stoploss.

Ravi asks: "I have a question that I'd like to ask. I've been trading in individual stock options recently particularly TATASteel and ICICIBank, making a premium from my prices. But I've noticed that the option prices after a point are not appreciating even though the stock price is falling and there are no trades happening on the options. How do I go about squaring off such an option (second month option)?"


My Notes: Options traders must have a clear understanding of implie volatility. Sometimes when you buy options with low IV, and the price registers a violent move against you, you will find that the option price does not go much against you since implied volatility has gone up. Reverse may happen when you buy options with High IV. As  a seller, you gain when IV comes down, and lose when IV goes up after you sell.
The other question is about liquidity in options. This is a problem in India where we do not have any market makers.You have to wait patiently till a buyer/seller comes for your trade. Often, putting in a fair bid attracts an opposite party, soon enough.
 
I have to go for my Awaaz interview at 9:30 AM. More later.
 

11 comments:

men said...

Yes Mr. Sudarshan I am in particular watching you, as I believe what you say and that is "MARKETS CAN DO ANYTHING", unfortunately SGX is 4762 NOW.

Maneesh041 said...

Dear sir,
Being a student of TA and a follower of yours i have a question to ask i am reading a H&S figure on charts of maruti which is giving some bearish signals can you enlight me on the same.

men said...

4550 is also a fibo level of the march low to high. 4163, 3852 are 38 and 50% retracements for the same period. 3852 I think would also be the gap before the elections I COULD BE WRONG HERE. Mr. Sudarshan a test of these 2 levels is generally expected, what is your view. Thanks,

rajamani said...

hi sudharsanji,

kindly add google search to your blog
so that we can search the old articles needed

regards
rajamani

keralkrishna said...

hello sir
You had a buy call on nifty today with a stop loss of 4750.After this late sell off do you still beleive that a relief rally is posiible from levels like 4750. yesterday and today nifty tried to pull back but failed.Is it possible that nifty will touch 4550before it going back to 4925(you taught us that anything is possible in the market).Anyway iam following the trend which is down...Again the lesson learned from the master sudarsanji..
thanks
krishnakumar

kk said...

YES ABSOLUTELY SIR,THAT'S THE ZONE I HAVE BEEN WATCHING FOR, BUT I THINK, SIR IF WE TILT THAT LINE SOMEWHAT FOR A CLEAR VIEW, COMBINING THE TOPS OF LAST HEAD AND SHOLDER DURING BEAR MARKET AND THE INVERTED HEAD AND SHOLDER THIS TIME THE LEVEL COMES SLIGHTLY HIGHER I.E AT- 4680,4700 OR MAY BE AT 4740 .THAT'S EVIDENT FROM THE FACT THAT LAST TIME WHEN THERE WAS A CORRECTION AFTER THAT 20% CIRCUIT DUE TO ELECTION RESULTS, NIFTY TOOK SUPPORT AT 3918 WHICH WAS THE ZONE JOINING THE TRENDLINE OF MARCH 2007 LOWS ,LOWS OF THE BEAR MARKET RALLY STARTED ON 18 JULY.SO I THINK NIFTY SHOULD TAKE SUPPORT IN THAT 4680-4740 ZONE. I AM A LONG TERM PLAYER AND I AM NOT SHORT ON NIFTY RIGHT NOW .I WILL ONLY GO SHORT WHEN IT BREAKS 4650 LEVELS .PLEASE CORRECT ME SIR.

BullMount said...

Respected Sir,

I would like to contect you for the stock market on professional basis. Kindly provide me your contect details.

Thank you.

Yours faithfully,

Yogesh Chauhan
yogeshchauhan73@gmail.com

Manish.T said...

With all due respect to you, I think some credit should also go to the channels on which you appear...they still have the largest market share in their space.

saket said...

Analysis and Trading two totally different areas
Sir over the past 3-4 months i have learned this fact i had read about this in books but could not figure out how but as u start trading you ccome to know how.
eg.recently i had bought balrampur chini as it had broken out of 128-130 zone i bought at 131.20 with a stop of 122 it went up to 143 and as per my rules i shifted the stop to breakeven 131.5 the stock came down to 130.6 stop was trigerred and the stock then agian went up.my analysis here was correct but trade did not work in my favour.this happened many times in the last 3-4 months.perhaps i am conservative trader thats in my nature as traders u have to learn to take risks.perhaps i have to review my rules.
Also i think different market conditions teach u various trading methods i learnt how to trade breakouts better in this phase.Your thoughts

ANANT said...

Dear Sudarshanji,

My view on extended trading hours is different. We have got habit and mind set of trading for 5.30 hrs. However there are many exchanges who follow more than our exchange timings.

I feel if following detailed exchanges can handle more operational timing why can't we, Hong Kong 1000-1600 Hrs. i.e. 30 min more, Seoul 0900-1500 Hrs. i.e. 30 min more, US 0930-1600 Hrs. i.e. 1 hr. more, Japanese 0900-1530 Hrs. i.e. 1 hr. more, Singapore 0900-1700 Hrs. i.e. 2.30 Hrs. more, Europe-UK-FTSE 0800-1630 Hrs. i.e. 3 hrs. more, Italian CAC & German DAX operates from 0900-1730 Hrs. i.e. for 8.30 hrs., exception is Taiwan where exchange only operates for 0430 hrs.

My point is ours is not going to be first exchange which will operate for more than 5.30 hrs.

We may have to redefine our working style, habits (home work time, lunch time etc.)to suit changing timings; and who knows we may experience more pleasant and workable environment.

Regards,

Anant

Ravi said...

Thank you for the regular replies.
It's sad that we don't see larger volumes on the Indian markets, for now we'll have to make do I guess. :)

Regards,
Ravi.