Wednesday, August 10, 2011

Big up day likely

With American markets rallying big time, almost 4% +, we can expect the Nifty to open with an up gap, then, stay higher. It now seems that 4950 will act as a short term low.

Trading ideas:
 1. Opening Range Breakout. use the first 15 minutes as the support and resistance range. Buy above resistance with stop under support.
2. On intraday declines, look to sell PUT options. This may work since implied volatility was very high on Tuesday. I.V's could come down on wednesday but may still be high enough to be sold into. See my earlier post on this trade.
3. Buy Futures on intraday consolidation / dip.

Manage your trade carefully. Do not take unneccessary risks. Keep volumes low.

2 comments:

bkmm said...

Sudarshanji,

Though US DOW and other indices are 4 to 6% +ve, but during the day most of them went into -ve with high volumes and recovered only for the last 1 hour.

Does that indicate they sold and covered up all very very HIGH volumes. Even the Vix was in the range of 48 to 35, ending at 35.

So panic would still prevail.

bkm

daytrader said...

dear sir
if i use 15 min opening range breakout what abt my exit option ,when to exit or humble request explain some exit strategy for day trading
thanks and regards
ur follower