BHEL: Chart set up.. trading strategy.. R&R and Risk Management
BHEL
Chart set up
- the stock has seen a meteoric run of approx. 14 points from 122 to 136 on 1st Sept 23 and then a 14 point drop back to 125.65 a few days later on 12 Sept 23.
- this makes the zone of 122-125.65 a crucial level to watch out for which may potentially act as resistance zone
- on the down side 63 day EMA is around 118
- recent closing low of 116.3 and intra day low of 113.5 make those levels important on the downside...
View
- possible range bound movement
Trading strategy
- Given the view, an Iron Condor strategy can be considered to trade the current set up
It consists Buying and selling of both Call and Put options
Buy Out of Money Call & Put option and Sell Near money Call & Put Option
Understanding Risk & Reward
An example of Iron Condor strategy and its working
Sell 115 Put option around 1.85 and
Buy 110 Put option around 0.85
Sell 125 Call option around 2.9 and
Buy 130 Call option around 1.6
Margin requirement for the strategy : Rs 66800 approx.
Net receivables 2.3 points per strategy
Lot size 5250
Max profit potential Rs 12075 if BHEL closes any where in between 115-125 on 30 November 2023.
Loss in strategy if BHEL closes below 112.70 or above 127.30 on 30 November 2023
Risk Management
One can review around 116-115 on the lower side / 124-125 on the higher side giving ample time and scope to adjust / exit with minimum damage.
Focus on managing risk. If risk is managed, one stands a better chance to stay profitable.
Do let me know in the comment section below if you find the analysis helpful.
Like and Follow
Take care & safe trading...!!!
Disclaimer
-The view expressed here is my personal view
- Past performance is not a guarantee for future predictions
- I have been wrong in the past and can be wrong again in future too
- Use this for educational purpose
- Any decision you take, you need to take responsibility for the same
- It's your hard earned money. Treat it wisely
- Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance
- if trading in F&O, understand that F&O trading involves risk
- Do take proper risk management measures
- Do your own analysis and consult your financial adviser if need be
Chart set up
- the stock has seen a meteoric run of approx. 14 points from 122 to 136 on 1st Sept 23 and then a 14 point drop back to 125.65 a few days later on 12 Sept 23.
- this makes the zone of 122-125.65 a crucial level to watch out for which may potentially act as resistance zone
- on the down side 63 day EMA is around 118
- recent closing low of 116.3 and intra day low of 113.5 make those levels important on the downside...
View
- possible range bound movement
Trading strategy
- Given the view, an Iron Condor strategy can be considered to trade the current set up
It consists Buying and selling of both Call and Put options
Buy Out of Money Call & Put option and Sell Near money Call & Put Option
Understanding Risk & Reward
An example of Iron Condor strategy and its working
Sell 115 Put option around 1.85 and
Buy 110 Put option around 0.85
Sell 125 Call option around 2.9 and
Buy 130 Call option around 1.6
Margin requirement for the strategy : Rs 66800 approx.
Net receivables 2.3 points per strategy
Lot size 5250
Max profit potential Rs 12075 if BHEL closes any where in between 115-125 on 30 November 2023.
Loss in strategy if BHEL closes below 112.70 or above 127.30 on 30 November 2023
Risk Management
One can review around 116-115 on the lower side / 124-125 on the higher side giving ample time and scope to adjust / exit with minimum damage.
Focus on managing risk. If risk is managed, one stands a better chance to stay profitable.
Do let me know in the comment section below if you find the analysis helpful.
Like and Follow
Take care & safe trading...!!!
Disclaimer
-The view expressed here is my personal view
- Past performance is not a guarantee for future predictions
- I have been wrong in the past and can be wrong again in future too
- Use this for educational purpose
- Any decision you take, you need to take responsibility for the same
- It's your hard earned money. Treat it wisely
- Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance
- if trading in F&O, understand that F&O trading involves risk
- Do take proper risk management measures
- Do your own analysis and consult your financial adviser if need be
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