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.

It is what people actually did in the stock market that counted – not what they said they were going to do - Jesse Livermore

At this point of time Nifty fut is trading at 4914.  Traders can buy 1 lot Nifty fut at cmp and at the same time buy nifty 4900 put option at cmp Rs.102. If Nifty closes below 4850 then we have to exit both positions.

In summary you are buying 1 lot Nifty fut and at the same time you are also buying 4900 put option. to hedge against the risk.More info about this strategy will be published after market hours.

Exit Nifty put at CMP Rs.102 and Hindalco fut Short at CMP Rs.114. No open position

Trailing SL for Hindalco Short Rs.116

If you are still holding Nifty put move the SL to Rs.95

Book partial profit in Nifty put option. Conservative traders book profit in Hindalco fut short

Place sl for Nifty 4900 put @ 92.00 .Conservative traders exit at 99.00

Tgt for hindalco upto Rs.113.00

Positional Call : Sell Hindalco fut at CMP 116.40 sl abv 119.00 wait for the tgt.

Once 4900 put option premium moves to 96-97 place sl at 91

Buy 4900 put option 2 lots @ cmp 90 sl blw 69(Intraday)