Reliance: Support Resistance and trading strategy
Reliance
The Chart set up
The stock has been sideways for the last 8-9 months.
The stock has fallen approximately 9% from the top in the month of December so far.
Important levels on the downside which has the potential to provide support
S1 - 2467-2485
S2 - 2405-2420
Important levels on the upside which has the potential to act as resistance
R1 - 2565-2588
R2 - 2632-2680
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My Trading strategy
Given the set up, my trading strategy for Reliance: Short Strangle strategy for January series
Sell January 2023 expiry
2640 Call option &
2400 Put option
Net incoming 52 points
_____________________________________________________________________________________________________
Gain potential and understanding risk profile
Max profit potential of Rs 13700 per strategy lot, if Jan expiry day close is anywhere between 2400-2640
( roughly 12% ROI on margin requirement)
Loss in strategy, if Reliance closing is above 2692 or below 2348 on 25th Jan 2023.
_____________________________________________________________________________________________________
My Risk Management levels
Review points for managing risk
2467 / 2420 on the downside
2580/ 2612 on the upside
These review points are based on support and resistance levels identified in chart analysis and accordingly trading strategy has been curated which should give ample time and scope to adjust / exit in case view of rangebound movement is getting invalidated.
Apart from these, I would be also monitoring Crude oil price movement.
_____________________________________________________________________________________________________
Hope the analysis and explanation of trading strategy helps you plan and manage your trade.
Do let me know if you find the analysis and insights helpful.
To trade with me, Do Like and Follow for getting more trading ideas like these...!!!
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
The Chart set up
The stock has been sideways for the last 8-9 months.
The stock has fallen approximately 9% from the top in the month of December so far.
Important levels on the downside which has the potential to provide support
S1 - 2467-2485
S2 - 2405-2420
Important levels on the upside which has the potential to act as resistance
R1 - 2565-2588
R2 - 2632-2680
_____________________________________________________________________________________________________
My Trading strategy
Given the set up, my trading strategy for Reliance: Short Strangle strategy for January series
Sell January 2023 expiry
2640 Call option &
2400 Put option
Net incoming 52 points
_____________________________________________________________________________________________________
Gain potential and understanding risk profile
Max profit potential of Rs 13700 per strategy lot, if Jan expiry day close is anywhere between 2400-2640
( roughly 12% ROI on margin requirement)
Loss in strategy, if Reliance closing is above 2692 or below 2348 on 25th Jan 2023.
_____________________________________________________________________________________________________
My Risk Management levels
Review points for managing risk
2467 / 2420 on the downside
2580/ 2612 on the upside
These review points are based on support and resistance levels identified in chart analysis and accordingly trading strategy has been curated which should give ample time and scope to adjust / exit in case view of rangebound movement is getting invalidated.
Apart from these, I would be also monitoring Crude oil price movement.
_____________________________________________________________________________________________________
Hope the analysis and explanation of trading strategy helps you plan and manage your trade.
Do let me know if you find the analysis and insights helpful.
To trade with me, Do Like and Follow for getting more trading ideas like these...!!!
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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