Nifty Daily Chart
Today Nifty has closed at 4928 down by 36.80 points. Nifty was trading in sloping channel from Nov 2010 to Jan 2012. This channel was broken in Jan 31st and Nifty shot upto 5600. The trend line which was acting as strong resistance can act as major support.So the importance of this sloping trend line is very high.
You can also observe in the graph that RSI is oversold and I personally believe that downside is limited. If Nifty closes below 4850 then we can expect further fall.
Synthetic Call option
In synthetic call option trader will buy Futures and at the same time ATM or close ATM put option is bought in order to minimise the risk.
Today Long position on Nifty fut was initiated at 4914 and at the same time 4900put option was bought at Rs.102.
Breakeven : 4914+102=5016
Profit : Unlimited above 5016
Max Loss : Premium+Diff between fut price and spot price
102+14=Rs.116
Exit the both the positions if nifty closes below 4850.
Today Nifty has closed at 4928 down by 36.80 points. Nifty was trading in sloping channel from Nov 2010 to Jan 2012. This channel was broken in Jan 31st and Nifty shot upto 5600. The trend line which was acting as strong resistance can act as major support.So the importance of this sloping trend line is very high.
You can also observe in the graph that RSI is oversold and I personally believe that downside is limited. If Nifty closes below 4850 then we can expect further fall.
Synthetic Call option
In synthetic call option trader will buy Futures and at the same time ATM or close ATM put option is bought in order to minimise the risk.
Today Long position on Nifty fut was initiated at 4914 and at the same time 4900put option was bought at Rs.102.
Breakeven : 4914+102=5016
Profit : Unlimited above 5016
Max Loss : Premium+Diff between fut price and spot price
102+14=Rs.116
Exit the both the positions if nifty closes below 4850.
It is what people actually did in the stock market that counted – not what they said they were going to do - Jesse Livermore
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