Hey folks, another smashing week for those who tuned into my pre-market YouTube videos! We saw some great results across all option expiries covered this week. This is as trade plans shared panned out exactly as planned for both option buyers and sellers. Also, this week I covered stocks like HDFC Bank (NS:HDBK), Axis Bank (NS:AXBK), Reliance, ITC, and LIC Housing Finance (NS:LICH). All are performing like clockwork and you can catch their respective trade plans on my channel.
Speaking of analysis, today I will cover four stocks and one index. The article will cover Asian Paints (NS:ASPN) and Reliance Industries (NS:RELI). While the YouTube video shared below analyses TCS (NS:TCS), Bajaj Finance (NS:BJFN) and Nifty Midcap. I covered these stocks via a video as their charts are more murky. Hence, this way I can explain their details more intricately. I looked at Midcap Nifty because of its expiry as I daily release a video analysing the index expiring that day. In these videos, I share some juicy expiry strategies for both option buyers and sellers.
Asian Paints: Profit Party Time (Almost Over)
I am perusing over Asian Paints as I covered it on my YouTube channel two weeks ago when it was trading at 2,900. I had shared that I was holding a long position as I was expecting a rise to 3,280, and we hit that peak last week. So, the question is what’s next?
Now, for those who joined with me at the bottom, tighten those profit stops as the party is about to end! Thus, it is preferable that we secure roughly 90% of that sweet profit. Even if the resistance at 3,280 cracks, the maximum upswing we are looking at is until the resistance between 3,320 and 3,350. This is as the stock has reached an overbought state and necessitates a breather.
Hence, due to all the above, I plan to hold the position with a trailing stop loss that ensures I walk away with 90% of the profit made. But if we see the stock’s volume buildup going below 50% for the bulls, then I will exit the equity and move to options. This is as that will confirm a pullback and to profit from that, I will sell calls (CEs) above 3,350.
Reliance Industries on the Ropes?
Now I am covering Reliance, as it is also a star of a previous video on my channel. This is as before the AGM I shared that even if the Ambani's were to promise the moon, the stock would not rise above 3,080. Was correct as the stock obeyed my level like an outstanding student, as the high on the AGM day was spot on at 3,079.45. Then last week I made a new video sharing that I expect a potential drop to 2,900. That too has partially occurred as Reliance on Friday dropped to 2,924 with a hefty bearish candle. So now I am covering it, as I expect things to get a bit tricky since we are a mere 0.8% away from my support.
So going ahead, I see either a “dead cat bounce” or a clean fall. So, what are the choices?
- Choice 1: If the support at 2,900 holds, then brace yourselves for a dead cat bounce that will take us up to 3,020.
- Choice 2: If the support at 2,900 crumbles, then get ready for a quick descent to 2,840. If that breaks, then 2,750 is next.
How am I trading this? As for equity buying, I will stay on the sidelines for now. This is as the dead cat bounce offers a terrible risk-reward ratio. Hence, you will be risking your capital for pennies. However, on the options front, there is a trade. If the support holds, then I will sell PEs options (put options) below 2,900 with a tight stop loss. But if the support breaks, then I will sell CEs (call options) of above 2,950 with a tight stop loss.
The Final Verdict
Asian Paints delivered me and the channel viewers quick profits. However, its upward journey is nearing its end. So I believe it is time to book some profits, but let a trailing stop loss do the dirty work. This is as with a trailing stop you can squeeze out every last drop of profit possible. As for Reliance Industries, on the equity front, I will keep my distance. But on the derivative front, there is an opportunity brewing.
Finally, do check out the YouTube video for the full scoop on Bajaj Finance, TCS, and the Midcap Nifty expiry. Trust me, you won’t want to miss those money-making trading ideas!
Until next time, happy trading!
NB: The links to the Youtube videos I discussed above are shared below:
- HDFC Bank and Axis Bank - https://youtu.be/rgrrH770Nns
- ITC and LIC (NS:LIFI) Housing Finance - https://youtu.be/PUoH13IomPw
- Mahindra & Mahindra Plus Sun TV (NS:SUTV) - https://youtu.be/sWxz30LaukI
- Weekly Market Prep: Price Action Analysis of Bajaj Finance, TCS & Nifty Midcap (08-Sep-2024) - https://youtu.be/RfQUZSGj7nI