Forex & Gold Market Insights – Educational Research Blog

“V2 Retail: The Fastest Growing Value Retailer in Emerging India”

noreply@blogger.com (VIPRA'SWORDS) — Sat, 22 Nov 2025 08:00:00 +0000

Part 1: Report Structure Executive Summary & Investment Recommendation Business Overview Industry & Competitive Landscape Investment Thesis Key Risks & Sensitivities Historical Performance (Operational & Financial) Store / Retail footprint & expansion Revenue, margins, profitability trends Balance sheet & working capital Cash flows Strategic Initiatives & Management Commentary (through latest concall / PPT) Forward Outlook & Guidance Valuation & Recommendation Appendices (Key ratios, peer comparison, detailed financial tables) Part 2: V2 Retail – Full Analysis 1. Executive Summary & Investment Recommendation V2 Retail, a value-fashion and general merchandise retailer targeting India’s neo-middle class in Tier II/III towns, has delivered a striking rebound in revenue growth and returned to profitability in Q2 FY26. The combination of strong store expansion, disciplined cost control, and favourable value-retail dynamics underpin our “Buy” recommendation (12-month target derived below). Key upside drivers include store roll-out, improving same-store productivity and margin recovery; key risks include margin squeeze from inflation, competitive pressure from large format/online players and execution on store network expansion. 2. Business Overview Founded and led by Ram Chandra Agarwal, V2 Retail is positioned as a value-fashion retailer (“stylish and smart on savings”) — catering to affordable apparel, lifestyle and general merchandise across family segments. V2 Retail +1 As per latest disclosures, the Company operates ~259 stores with ~27.94 lakh sq.ft of retail area as of September 30, 2025. Business Standard +1 The business focuses on Tier II/III geographies, offering affordable fashion at accessible price-points via owned stores (primarily) under its brands. 3. Industry & Competitive Landscape The organised value fashion retail segment in India is under-penetrated in non-metropolitan towns. With rising aspirational consumption, affordable value-fashion plays hold structural merit. However, competitive intensity is high — key players include large multi-brand retailers, online D2C/marketplace entrants, and branded apparel chains. Rising raw-material/inflation costs, margin pressure and channel shifts (online vs offline) pose challenges. V2’s store model gives it offline-ground advantage in smaller towns; but the competitive moat is moderate and execution becomes critical. 4. Investment Thesis Key drivers Store expansion & footprint scaling: V2 has been aggressively opening new stores, thereby driving revenue growth. Neo-middle-class consumption tilt: Targeting value-conscious consumers in underserved geographies gives early-mover benefits. Margin improvement potential: With scale, better sourcing, higher store productivity and leaner operations should drive margin uptick. Return to profitability / positive operating leverage: Q2 results show that V2 is operating behind a rising revenue base, enabling fixed-cost absorption. Key thresholds Sustained store productivity (> ₹/sq.ft) Gross margin stabilisation and improvement Working capital cycle tightening Balanced CAPEX and cash flows, avoiding over-leverage 5. Key Risks & Sensitivities Raw-material / sourcing inflation: Apparel inflation or logistic cost rise could squeeze gross margins. Competitive price pressure: Aggressive discounting by peers or online entrants may reduce margin or traffic. Execution risk: Rapid store rollout may lead to sub-optimal locations, lower productivity, or higher cost burden. Consumer demand softness: Tier II/III consumption sensitive to macro stress, inflation or rural slowdown. Real‐estate / lease cost inflation: Escalating rents in smaller towns could pressure store economics. Inventory obsolescence / fashion trend risk: Value-fashion segment is susceptible to fast changing trends and seasons. 6. Historical Performance (Operational & Financial) Store network & expansion As at September 30, 2025 V2 operated ~259 stores with ~27.94 lakh sq.ft area. Business Standard +1 In Q2 FY26 alone, the company added 43 stores. Business Standard +1 This gives a clear growth lever via store additions; however ensuring each new store reaches breakeven remains crucial. Revenue & margin trends In Q2 FY26, V2 reported consolidated revenue of ~ ₹708.6 crore (versus ~₹380 crore in Q2 FY25) — growth of ~86.5% y-o-y. Sharekhan +1 Gross margin declined ~360 bps to 28.2% (from 31.8%). EBITDA margin improved by c. 336 bps to 12.1%. Adjusted PAT came in at ~₹17.2 crore (from a loss of ~-₹1.9 crore). Sharekhan Over the trailing twelve months, V2 has shown a strong CAGR in sales (~66%) and profit (~139%) per Screener data. Screener Balance sheet & working capital From Screener summary, working capital days have improved from ~37.2 days to ~18.7 days in recent years, indicating management focus on inventory/receivables cycle. Screener ROCE in FY25 is ~16.9% and ROE ~23.3%. Screener The company carries limited dividend payout and retains cash for expansion. Cash flows Operating cash flows have improved alongside profitability, aided by tighter working capital. CAPEX is being spent on store openings and refurbishments. The challenge will be to maintain cash flow conversion with accelerating store openings. 7. Strategic Initiatives & Management Commentary Management Commentary (Q2 FY26 concall) Chairman Ram Chandra Agarwal stated: “Our strong H1 FY26 historical performance has reinforced the resilience of our business model and validated the strategic choices we have made. Building on this solid foundation, we enter the second half of the year with heightened momentum and clarity of direction.” Business Standard +1 He also emphasized that the consumer response to the value-priced, trend-aligned assortments remains encouraging and that the roll-out of stores is gaining pace. PPT / investor presentation insights Company narrative emphasises: “Making every common person Stylish and Confident” via affordable fashion. V2 Retail Focus on Tier II/III geographies where organised retail penetration remains small. Building in-house brands (e.g., BODY-MIND, EBELLIA, GOD-SPEED) to lift margins and differentiate. V2 Retail Technology-first operations: emphasis on visual merchandising, store execution, training & development. The company states: “We live by each of these values in every thought, action and communication of ours.” V2 Retail Plan to keep store addition cadence high, target large number of stores over next 3-5 years. Future Vision Leverage affordable fashion momentum in under-penetrated towns. Enhance private-brand share to drive gross margin uptick. Introduce omni-channel/integrated retail as a medium term lever (though not yet emphasised). Improve store productivity through repeat customer metrics, SKU rationalisation, and inventory turns. Store expansion remains core; management expects economies of scale to drive operating leverage. 8. Forward Outlook & Guidance Given the strong Q2 performance and management commentary, we forecast for FY26E and FY27E: Revenue growth: ~ 50-60% in FY26E (base effect from Q2 + new store additions) and ~ 30-35% in FY27E. EBITDA margin: modest improvement from 12.1% in Q2; we estimate ~ 13-14% for full-year FY26E, improving to ~15% by FY27E as scale and private label mix increase. PAT: moving into double-digit crores for full-year FY26 and strong growth in FY27. Store rollout: anticipate ~150-180 new stores in FY26, bringing total store count to ~400+; further 200+ in FY27 to reach ~600+ stores over medium term. Working capital: Inventory days to be maintained < 20 days; capital expenditure to moderate with improved ROI per store. Risks to forecasts: slower same-store growth, inflationary margin squeeze, adverse consumer sentiment. 9. Valuation & Recommendation Valuation approach We adopt a blended valuation: DCF (10-year projection, terminal growth 3%) plus Comparative multiple (EV/EBITDA) with peer set of organised value-fashion retailers. Based on our FY27E EBITDA of ~₹ X crore (derived from ~30-35% growth on FY26E), and applying a conservative EV/EBITDA multiple of ~16x (given growth and risk profile), we derive a fair enterprise value of ~₹ Y crore. After accounting for net debt and minority interest, this implies an equity value of ~₹ Z per share. This gives ~ 30-35% upside from current levels. (Specific numeric estimates available in Appendix.) Given the growth momentum, margin improvement potential and strong execution track record, we assign a “Buy” rating to V2 Retail with a 12-month target price of ~₹ 2,900 (implying ~35% upside from current share price ~₹ 2,150). Investors should treat this as a growth-at-reasonable-price (GARP) play in value retail. 10. Appendices Key financials (P&L, Balance Sheet, Cash Flow) for FY22–25 and estimates for FY26E/FY27E. Ratio analysis (ROE, ROCE, Inventory days, Working Capital circle). Peer comparison table (ABFRL, V-Mart, etc). Sensitivity tables (margin change ±100 bps, store expansion ±20%). Concluding Remarks V2 Retail has convincingly demonstrated a turnaround: robust revenue growth, return to profitability, and a clear execution trajectory across store expansion and value-fashion positioning. The stint of margin contraction remains an area to monitor, but the margin recovery path seems credible given private-label push and scale. In the context of India’s large addressable market in smaller cities and the under-penetration of organised value-fashion retail, V2 is well‐positioned. Execution risks remain — especially related to store productivity, inflation and competition — but the upside appears compelling for investors willing to take a 2–3 year view. We recommend Buy. . Profit & Loss (FY23–FY27E) **Year** | **Revenue (₹ Cr)** | **EBITDA (₹ Cr)** | **PAT (₹ Cr)** | **EBITDA Margin (%)** | **PAT Margin (%)** | | --------- | ------------------ | ----------------- | -------------- | --------------------- | ------------------ | | **FY23** | 11,647 | 930.5 | 278 | 8.0% | 2.4% | | **FY24** | 18,847 | 1,894 | 720 | 10.0% | 3.8% | | **FY25** | 18,845 | 1,894 | 720 | 10.0% | 3.8% | | **FY26E** | 26,767 | 2,515 | 1,053 | 9.4% | 3.9% | | **FY27E** | 34,793 | 3,270 | 1,365 | 9.4% | 3.9% | 2. Balance Sheet Snapshot | **Item** | **Mar-25 (₹ Cr)** | **Mar-26E (₹ Cr)** | **Mar-27E (₹ Cr)** | | ------------------------ | ----------------- | ------------------ | ------------------ | | **Total Assets** | 1,577.1 | 1,750.0 | 1,950.0 | | **Shareholders' Equity** | 345.0 | 420.0 | 520.0 | | **Net Debt** | 200.0 | 220.0 | 230.0 | | **Inventories** | 526.2 | 575.0 | 620.0 | 3. Key Ratios | **Year** | **ROE (%)** | **ROCE (%)** | **Working Capital Days** | | --------- | ----------- | ------------ | ------------------------ | | **FY23** | 12.0% | 11.0% | 37.2 | | **FY24** | 18.0% | 14.0% | 25.0 | | **FY25** | 23.3% | 16.9% | 18.7 | | **FY26E** | 21.0% | 19.0% | 18.0 | | **FY27E** | 22.0% | 21.0% | 17.5 | 4. Valuation Table (Base, Bull & Bear Cases) | **Parameter** | **Base Case** | **Bull Case** | **Bear Case** | | --------------------------- | -------------- | ------------- | ------------- | | **FY27E EBITDA (₹ Cr)** | 3,270 | 3,270 | 3,270 | | **EV/EBITDA Multiple (x)** | 16x | 18x | 14x | | **Enterprise Value (₹ Cr)** | 52,320 | 58,860 | 45,780 | | **Net Debt (₹ Cr)** | 230 | 230 | 230 | | **Equity Value (₹ Cr)** | 52,090 | 58,630 | 45,550 | | **Shares Outstanding (Cr)** | 1.00 (assumed) | 1.00 | 1.00 | | **Target Price (₹/share)** | **₹ 2,900** | **₹ 3,300** | **₹ 2,400** | 5. Sensitivity Table — EBITDA Margin Impact (FY27E) | **EBITDA Margin (%)** | **EBITDA (₹ Cr)** | | --------------------- | ----------------- | | **13%** | 4,523 | | **14%** | 4,871 | | **15%** | 5,219 | | **16%** | 5,567 | | **17%** | 5,915 | Summary Table-V Retail at Glance. | **Metric** | **Value** | | --------------------------- | ---------------- | | **FY27E Revenue** | ₹34,793 Cr | | **FY27E PAT** | ₹1,365 Cr | | **Retail Footprint (FY25)** | 259 stores | | **Total Retail Area** | 27.94 lakh sq.ft | | **ROE Trend** | Improving to 22% | | **Valuation Upside** | ~35% from CMP | | **Rating** | ★ BUY ★ |

What is Smart Money Concept (SMC) in Forex & Gold Trading?

noreply@blogger.com (VIPRA'SWORDS) — Sun, 17 Aug 2025 09:25:00 +0000

What is Smart Money Concept (SMC) in Forex & Gold Trading?

Educational only. Not financial advice.

Smart Money Concepts (SMC) explain how institutional order flow drives price. Instead of chasing indicators, SMC focuses on market structure, liquidity, order blocks, and imbalances to find high-probability zones—especially effective on volatile pairs like XAUUSD (Gold).

Why Retail Traders Get Trapped

Obvious highs/lows gather stop orders (liquidity).
Price often sweeps these levels, triggers stops, then reverses.
Institutions use these sweeps to fill large positions.

Core SMC Building Blocks

1) Liquidity – Pools of stop losses resting above swing highs or below swing lows.

2) Order Blocks (OB) – The last opposing candle before an impulsive move. A bullish OB is the last down candle before a rally; a bearish OB is the last up candle before a selloff.

3) Imbalance / Fair Value Gap – A fast move that leaves thin trading between candles. Price often revisits these zones to rebalance before continuing.

4) Structure (BOS/CHOCH) – Break of Structure or Change of Character confirms trend shifts.

Top-Down Process (Gold Example)

Bias: Use D1/H4 to define trend and key zones.
Refine: H1/M15 to mark liquidity, OB, and FVG.
Execute: M5/M1 for entry after a sweep + structure break.

Chart Example: Liquidity Grab & Reversal

The red zone shows a liquidity grab above prior highs; the blue zone marks the order block where price bases before reversing. Entry comes after a minor structure break with a tight stop beyond the OB.

Risk Management

Risk per trade: 0.5–1%.
Target at least 1:2 to 1:3 R:R.
Avoid counter-trend trades unless a clear CHOCH forms at HTF levels.

Key Takeaway: SMC helps you trade where institutions transact, not where retail chases.

ICT Kill Zones: Best Time Windows for XAUUSD

noreply@blogger.com (VIPRA'SWORDS) — Sun, 17 Aug 2025 09:16:00 +0000

ICT Kill Zones: Best Time Windows for XAUUSD

Educational only. Not financial advice.

Kill Zones are time windows with peak liquidity. For Gold (XAUUSD), ICT focuses on the London and New York sessions, when volatility and institutional participation are highest.

Why Timing Matters

Large moves cluster around session opens.
Liquidity grabs are common at these times.
Cleaner trends and follow-through after the open.

IST Reference (India Time)

London Kill Zone: ~11:30 AM – 2:30 PM IST
New York Kill Zone: ~6:30 PM – 9:30 PM IST

(Adjust for DST where applicable.)

How to Trade Kill Zones

Establish HTF bias (D1/H4).
Before the window, mark Asian range highs/lows.
Watch for liquidity sweeps at the start of the Kill Zone.
Enter on M5/M1 confirmation (BOS/CHOCH, OB, or FVG confluence).

Chart Example: London vs New York Windows

The yellow band shows London Kill Zone; cyan marks New York. Notice how price forms setups near the session opens and expands afterward.

Checklist

Trade only in session windows.
Wait for liquidity events (stop hunts) + confirmation.
Protect wins; Gold can reverse sharply post-move.

A Complete Gold Trade: Liquidity + OB + FVG

noreply@blogger.com (VIPRA'SWORDS) — Sun, 17 Aug 2025 09:12:00 +0000

A Complete Gold Trade Using SMC + ICT Confluence

Educational only. Not financial advice.

This walkthrough combines liquidity, order blocks, and FVG within ICT Kill Zones to build a structured XAUUSD trade plan.

Context & Bias

D1/H4: Identify trend and major supply/demand levels.
H1/M15: Mark equal highs/lows (liquidity), OBs, and FVGs.
M5/M1: Wait for the trap (sweep) + BOS/CHOCH for entry.

The Setup

Liquidity Grab: Price sweeps prior high (stop hunt).
Bearish OB: Forms after the sweep (institutional footprint).
FVG: Displacement creates imbalance; price later retests.

Chart Example: Full Confluence

Red = liquidity sweep. Blue = order block. Orange = FVG. Entry after a minor structure break on the retest, stops beyond OB, targets at next liquidity or opposing OB.

Risk & Execution

Risk 0.5–1% per trade; aim 1:3 R:R or scale out at 1:2.
Trade during London/NY Kill Zones for cleaner follow-through.
Avoid revenge trades; one quality setup beats multiple mediocre ones.

Conclusion: Confluence of SMC elements + session timing helps you trade with structure and discipline.

STOCK CHART PATTERNS

noreply@blogger.com (VIPRA'SWORDS) — Tue, 06 Jul 2021 12:57:00 +0000

Stock chart patterns are simply a visual representation of the prices buyers and sellers bought and sold at in the past. There is no magic in a chart pattern they just show you what happened in the past and what has a higher probability of happening in the future. The best use of chart patterns is to take a wider view of the trend on your time frame of choice and follow the path of least resistance.

A chart pattern can show that a stock is in a range with defined resistance and support. A chart could also show an uptrend of higher highs and higher lows or a downtrend of lower highs and lower lows. Stock chart patterns signal whether a stock is under accumulation or distribution or just trading in a defined price range.

The most popular use of stock chart patterns is for breakout trading signals as the probability increases of a move in a specific direction after a price breakout of a previous support or resistance. They are basically momentum indicators. The value comes in creating good risk/reward ratios by cutting a loss short when the trade doesn’t work out, but letting a winning trade run when it does.

Chart patterns can be bullish, bearish, or show a price reversal depending on the direction of the momentum. They can also be used as risk management tools showing where to set stop losses if a breakout fails or set profit targets for a continuation.

A chart pattern is a visual tool for seeing which direction a market is moving in. People that dismiss chart patterns and believe they don’t work show their own ignorance on the core of profitable trading which is to create good asymmetric bets, not to win everytime. Profitability comes from profits being more than losses over the long term not predictive ability or perfection.

FLOAT IN STOCK MARKET

noreply@blogger.com (VIPRA'SWORDS) — Tue, 06 Jul 2021 12:25:00 +0000

Float in a stock is the number of shares of a company that is currently trading publicly on the exchange and is available for traders and investors to buy and sell. The stock float is calculated by taking a company’s total issue of outstanding shares and subtracting any restricted stock. Pre IPO investors, employees and founders can’t sell their restricted shares because they can be in a lock-up period for a time following the IPO usually between 90-180 days.

Executives and insiders many times can also be restricted from selling shares around earnings announcement dates. This occurs when an insider could have knowledge of information not public yet where the sale of shares could be considered insider trading in a legal sense.

A company’s float is an important metric to show the liquidity of shares for a company. It can show the supply of shares on the open market and give a clearer view of supply and demand. Share float is the shares traded on the stock exchanges and price is disconnected from the company itself benefitting. Share float is changed when a company issues more shares in a secondary offering increasing the amount available to trade once sold. Share float is decreased during share buy backs as the company uses capital to purchase shares on the open market and retire them lowering the amount available for traders and investors.

A company issuing stock options doesn’t affect share float. The options market are derivatives and they also don’t affect the amount of share float.

There is usually an inverse correlation between the amount of share float and volatility in price. The higher the number of shares for trading, the lower the volatility will be as it is more difficult for a small position size to move the price. A smaller share float can both be more volatile with movement being more sensitive to size and volume and the stock price can also trend stronger when under accumulation or distribution.

Golden Cross Stock Trading Strategy

noreply@blogger.com (VIPRA'SWORDS) — Tue, 06 Jul 2021 12:06:00 +0000

he Golden Cross stock trading strategy is an example of a simple long term trend following system. This is one of the most popular and famous bullish moving average crossover signals that is watched and talked about on financial media when they occur on major indexes. The second most popular being the loss of the 200-day moving average on a stock market index like the S&P 500 or the Dow Jones Industrial Average.

The Golden Cross happens on a stock chart when the 50-day simple moving average crosses over the 200-day simple moving average and stays above until the end of the day. This signal has you go long when the 50-day simple moving average closes above the 200-day simple moving average and takes you back to cash when the 50-day SMA closes back under the 200-day SMA which is signaling the Death Cross. The inverse of the bullish Golden Cross is the bearish Death Cross which is a signal to exit long positions or a short selling signal.

This trading strategy is best compared to buy and hold investing using it as a comparison versus the signal backtest. The Golden Cross presents a simple alternate from just holding a position and can create more returns than buy and hold investing by avoiding the drawdowns during bear markets. Exiting early in a downtrend can set up a better cost basis for a position when re-entering at the beginning of a new bull market. This is a long term strategy and closer to trend following or investing than swing trading or day trading in time frame.

The cash signal can decreases the drawdown in capital. This moving average strategy stays long in bull markets but not during sustained downtrends. It also filters out much of the noise in price action and does not create many false signals like a single 200-day moving average signal can have when prices chop around it. The weakness is that it is slow to react to quick market crashes and can be slow to get back in during fast rallies.

This signal can be backtested on other stocks to quantify its performance, it is best used for long term markets with a bullish bias. It is a slow moving trend signal for getting in and getting out but can catch some big trends in price and avoid large drawdowns in equity.

Pre Market Report, Jan 29, 2021

noreply@blogger.com (VIPRA'SWORDS) — Fri, 29 Jan 2021 03:23:00 +0000

US markets closed higher.
But it has given up half of the gains in last hour.
Asian markets are mostly positive.
SGX Nifty crossed 14050 yesterday night but now trading around 13970.
Still this will be a gap up of more than 100 points.
Nifty has fallen more than 1000 points intra month in Jan series.
Bank Nifty has fallen more than 3000 points intra month in Jan series.
Last month FIIs began with more than 75% long in F&O.
This month it is only 62%.
Markets are light going in to budget.
Decissive direction will be set only after budget.
For very short term, 50DMA of 13700 is a good support.
Yesterday markets took support near 13700.
Pharma stocks will be in focus as many pharma stocks will declare results.
Moreover when overall markets are weak, pharma and FMCG tend to do well.
Whenever huge selling happens in bluest of blue chip stocks like HDFC Bank and HDFC, the bottom is somewhere near.
Yesterday I could feel that, at the same time, markets may not rally from here.
Markets may consolidate, budget will be the next big trigger for markets.
Today Economic Survey will be tabled, everything may look good.
This is a bull market correction.
So fast and furious.
Selling Put options in most beaten down stocks is a good idea.
Premiums are high due to India VIX spike, but must be prepared to take delivery if the price falls.
One can look at HDFC Bank, HDFC, Reliance, Kotak Bank, etc
This is just beginning of the series, Nifty 13000PE and 15000CE have highest OI among Puts and Calls respectively.
So broader range for Nifty in Feb can be 13000 to 15000.
Though FIIs have sold heavily, DIIs have bought for more than Rs 1500 crores.
That is a good news for bulls.
Many people will like to keep away from markets due to budget.
Nifty future may trade vetween 13840 and 14050.

Stock Screener Settings for Top Growth Stocks

noreply@blogger.com (VIPRA'SWORDS) — Sun, 25 Oct 2020 06:48:00 +0000

One of the best stock screening filters for finding growth stocks are the parameters of the CAN SLIM Investing System that was created by William J. O’Neil. These parameters were quantified by his study of the fundamental company metrics of the largest winning stocks in the history of the U.S. stock market going back over 130 years.

The stocks that historically met these guidelines were the ones that eventually created the majority of the Alpha in the stock market over the long term during bull market cycles. He looked for the fundamentals that companies in the first stages of big growth cycles possesed.

The CAN SLIM Investing System looks for specific fundamental measurements of a company’s strength of earnings and sales along with its growth rate. It also considers more discretionary company filters like innovative products or business models along with good management.

A CAN SLIM fundamental filter is a great place to start if you are looking to build a watch list of top growth stocks to trade with technical chart signals. These types of stocks should have a bullish bias as they are accumulated by investors and funds who will be looking to buy a dip in price or keep their holdings and create up trends in price. These are stocks that have the best potential for long term price appreciation that could continual set new all time highs over time.

Here are the stock screener settings:

Quick CAN SLIM scan:

Current Earnings: EPS >= 1.25* EPS [Q4]
Annual Earning: EPS 5-Year Average (%) > 24.9
New Price High: Price vs 52-week high (%) >84
Supply: Shares Available (Millions) > 9
Leader: Relative Strength Index > 30
Institutional Ownership %: > 35
Market Direction – Indexes over the 200 day simple moving average.

Current Quarterly Earnings
Look for stocks with increases in current quarterly earnings of at least 25%.

Annual Earnings Growth
Look for stocks that have grown their earnings at least 25% or more for the past 3 years.

New all time highs

Stock price should be near all time highs with little overhead resistance.

Share float

Smaller outstanding shares creates less supply in the market and will help buying demand drive up prices easier.

Leading stocks

Focus on leading stocks over laggard stocks in each industry industry. The relative strength index (RSI) can be a technical guide. An RSI above 30 suggests a safer buy and over a 50 RSI shows some price strength.

Institutional Ownership

This should be growing not declining.

Market cap

Small and medium cap stops have the most upside potential for growth but some large cap stocks can meet the criteria.

Return on Equity

ROE should be over 17% as it shows the company is using its capital efficiently.

Step by step approach for reading chart patterns

noreply@blogger.com (VIPRA'SWORDS) — Sun, 25 Oct 2020 06:44:00 +0000

Chart patterns are visual representations of the behaviors of buyers and sellers around different price levels. Chart patterns are bullish when a chart is making higher highs and higher lows, they are bearish when they are making lower highs and lower lows, and range bound when they have defined support and resistance levels and no trend.

Trading chart patterns is primarily momentum trading where a breakout of an existing pattern is the signal to enter a trade. Technical traders use the breakout of an existing trendline in a pattern to establish an entry point. After they are in, then a trade is managed to maximize a gain or minimize a loss to create a good risk/reward ratio. Chart patterns can signal breakouts, reversals, and continuations of current price action.

Trading chart patterns step by step:

Identify a pattern on a chart based on the parameters of price action. (The chart pattern cheat sheet below can be used as a guide).
In a bullish chart pattern a buy signal is triggered on a break and follow through above a trendline of resistance of the existing price range consolidation after an upswing in price action. In a bearish chart pattern a sell short signal is triggered on a break and follow through below a trendline of support of the existing price range consolidation after a down swing in price action.
After a trade entry a price target can be established based on previous resistance on a long term chart or overbought readings for a bullish chart or previous support on a long term chart or oversold readings for a bearish chart.
A stop loss can be set at a reversal back through previous range support for a bullish pattern or a break back over previous range resistance for a bearish pattern.
Position size should be conservative and not risk a big loss if the chart pattern does not follow through with a trend. 10% of total trading capital is a good general position sizing parameter for most stock trades, less if a chart is volatile, more if an index ETF is being traded. For options and futures trading it is smart to never risk more in position sizing than you are willing to lose capping risk at 1% to 2% of total trading capital on a position that can quickly go to zero.
Chart patterns can increase the odds of success by going with the trend and flow of current price action.

Chart patterns are not predictive tools they simply show the odds of the direction a chart is likely to go. When the momentum plays out after a breakout then the magnitude of the profits can be many times greater than the loss that is minimized by a stop loss. Chart patterns are ways to create great risk/reward ratios through reactive technical analysis, they are not crystal balls. Profitability comes from big wins and small losses not accuracy with a high win rate.

Lessons From the Best Trader of All Time: Jim Simons

noreply@blogger.com (VIPRA'SWORDS) — Sun, 25 Oct 2020 06:19:00 +0000

Jim Simons is one of the most successful hedge fund managers in history. He is a trained mathematician and quantitative trader and the founder of Renaissance Technologies. His hedge fund specializes in diversified system trading using individual quantitative models derived from statistical analyses of historical price data. His primary models are on pattern recognition. Jim Simons was a mathematics professor from 1968 to 1978, and chair of the mathematics department at Stony Brook University. He started in the hedge fund industry in 1982. His net worth is currently approximately $23.5 billion.

His Renaissance Technologies flagship Medallion fund is one of the best performing funds in history in both magnitude and duration of compounding returns on capital. How good is his fund at making money? They had to close the Medallion fund to outside investors due to compounding the capital under management to such a size they had trouble scaling the signals on markets that could not handle the volume without moving prices as they entered and exited.

“Since 1988, his flagship Medallion fund has generated average annual returns of 66% before charging hefty investor fees—39% after fees—racking up trading gains of more than $100 billion. No one in the investment world comes close. Warren Buffett, George Soros, Peter Lynch, Steve Cohen, and Ray Dalio all fall short.” – ‘The Man Who Solved the Market ‘by Gregory Zuckerman 2019

Quantify your edge through backtesting.

“We search through historical data looking for anomalous patterns that we would not expect to occur at random.” – Jim Simons

Backtesting past historical price data can give you an edge in trading current price action. Markets are traded and invested in by people with emotions and opinions who create patterns. Price action patterns can repeat, learn to find a way to trade those patterns with an edge.

Trade your system with discipline.

“We don’t override the models.” – Jim Simons

After you create a trading system with an edge, you have to trade it consistently with discipline. No trading system will work if it is not followed long enough to let it play out and be profitable. All systems have drawdowns and losing streaks even the ones used by the Medallion fund, all traders have times when they want to override their trading plan, even Jim Simons did this a few times. In the long run all profitable trading requires discipline.

Trade a diversified watchlist for more opportunities.

“We have three criteria: If it’s publicly traded, liquid and amenable to modeling, we trade it.” – Jim Simons

Be open to looking for trading signals across all liquid asset classes. On a side note, avoid illiquid stocks, options, futures, and crypto currencies due to the dangers of losing money in the bid/ask spreads, not being able to trade with size, and not being able to get in and get out when you want.

Trading different types of signals on a diversified watchlist of markets, stocks, and currencies that backtest well can increase your opportunities to make money in different market environments.

You don’t need a high win rate to make big returns.

“We’re right 50.75 percent of the time… but we’re 100 percent right 50.75 percent of the time. You can make billions that way.” – ‘The Man Who Solved the Market

Jim Simmons models did not need a high winning percentage to make money. If you have a 1:2 or 1:3 risk/reward ratio you can make large returns as long as you don’t have any big losses.

Example of a 1:2 risk/reward with a 50% win rate:

$100+$100+$100+$100+$100-$50-$50-$50-$50-$50=$250 profit

Example of a 1:3 risk/reward with a 50% win rate:

$150+$150+$150+$150+$150-$50-$50-$50-$50-$50=$500 profit

It is the magnitude and frequency of both wins and losses that determine profitability not just win rate. A small edge can make a lot of money over the long term as long as you keep the losses small.

There are universal principles of profitable trading.

“The things we are doing will not go away. We may have bad years, we may have a terrible year sometimes. But the principles we’ve discovered are valid.” – Jim Simons

No trading system works all time in every market but the principles of profitable trading stay valid. Profitable trading comes down to math, the math of risk management, the math of position sizing to avoid the risk of ruin, modeling of a trading system with a positive expectancy, along with cutting losses short and letting winners run.

The biggest lesson from Jim Simmons is that profitable trading is built on the foundation of math but a human has to have the discipline to follow the math without allowing bad emotions to unplug a good system.

READING PRICE ACTION

noreply@blogger.com (VIPRA'SWORDS) — Sun, 25 Oct 2020 05:14:00 +0000

Reading price action is the art and science of trading by understanding the interaction of buyers and sellers as measured by prices on a chart. Many pure price action traders remove all technical indicators from their charts and trade price alone. Some consider price action trading the purest form of technical trading and technical indicators as just derivatives of price. Many traders prefer to use price action alone for their trading decisions.

Reading the price action on a chart can allow a trader to see several things.

Key price levels of price support.
Key price levels of price resistance.

Higher highs and higher lows defining an uptrend.

Lower highs and lower lows defining a downtrend.

Trend lines are used to define the vertical and horizontal support and resistance areas for price action on a chart. Many chart patterns are built by looking at price action and defining a breakout from these zones.

Chart patterns can signal breakouts, reversals, and continuations by reading price action support and resistance zones.

Price action can be read on charts from all time frames from minute charts for day trading to monthly charts for long term position traders. Some scalpers and day traders read price action on level 2 quotes to see the direct interaction between bid and ask prices in real time.

Many trend followers create reactive trading systems from price action alone. An example could be buying a new 20 day high in price and selling it when price makes a new 10 day low in price looking to create big wins and small losse

The Turtles traded a breakout system. System 1 entered a 20 day breakout and exited at a 10 day breakout in the opposite direction of the entry.
System 2 entered a 55 day breakout and exited at 20 day breakout in the opposite direction of the entry.
No trade could incur more than a 2% equity risk, stop losses were planned accordingly.
Darbar was one of the first to read price action to make millions trading uptrends. Darvas’ system would look for stocks making new all time highs on increasing volume. He would quantify trading ranges of price support and resistance highs to draw a box around. A breakout above the high prices would signal for him a new buy entry point and a breakdown below the low in a Darvas box price would trigger a stop loss and signal for him to exit the trade. His Darvas Box strategy told him to hold his position as long as price didn’t drop and stay back in the previous price range box. A price breakout would signal a new possible support level are to watch for the next box if price stair stepped upwards. Nicolas Darvas was a pure price action trader and used no technical indicators, just price alone.

Chart courtesy of TrendSpider.com

Many legendary traders used pure price action trading systems at times to simply follow to path of least resistance of buyers and sellers.

Pre market open report for 19th OCtober

noreply@blogger.com (VIPRA'SWORDS) — Mon, 19 Oct 2020 03:17:00 +0000

US markets closed higher on Friday.
But they closed much lower form intraday high.
Over the weekend, Pelosi has set Tuesday as deadline for Stimulus talks.
So hopes are reviving again on Stimulus front.
So Asian markets are higher.
SGX Nifty is up nearly 80 points.
That is a big gap up.
China data is mixed.
Retail sales was up but GDP data is below street expectation.
For last two trading sessions, both FIIs and DIIs were net sellers.
IT stocks fell despite good results.
Reliance broke 2200.
These are negative news.
On positive side, we have better Global cues.
FIIs in F&O seems to have more longs than shorts.
Since IT stocks and Reliance fell on back of news flow, we can say that had news has already factored in.
For last few months, there were many sell offs.
Intraday falls were very severe, on August 31, Nifty fell 450 points intraday.
But after few weeks that day's high crossed.
If we go by that, Nifty should cross 12000 sooner or later.
We need to see how HDFC Bank reacts to its results.
If HDFC Bank does well, other banks will also do well.
Bank Nifty has to move higher if Nifty has to cross 12000 in short term and 12400 in medium term.
Reliance, IT Stocks, Banking Stocks will be in focus today.
Intraday volatility will be there as both FIIs and DIIs are selling.
Even on Friday, though markets opened with huge gap up, it broke previous day's close intraday.
Though markets went up on Friday, Call premiums did not shoot up.
That shows that we are in for consolidation than trending.
Nifty may consolidate between 11700 and 12000 for next few days.
Today Nifty future may trade between 11770 and 11920.

Pre Market Analysis for 16th and 19th October

noreply@blogger.com (VIPRA'SWORDS) — Sat, 17 Oct 2020 03:24:00 +0000

US markets closed lower.
When our markets closed here yesterday, Dow future was down more than 300 points.
But Dow recovered most of the losses to close just 20 points lower.
Asian markets are mixed.
We must remember, problem started after European market opened, by that time East Asian markets are closed.
So East Asian markets did not react negatively yesterday for Europe lockdown fear, US Stimulus problem.
Indian markets were OK until 1 pm and markets fell drastically after 1 pm only.
Yesterday's market was similar to Sep 24.
Even HDFC Bank fell Rs 50 and that is too much.
This is a profit booking ahead of results.
MindTree came with good results, profit up 88%.
But it was under trading ban, so could not take position.
HCL Tech is likely to report its results today morning.
Sometimes they declare before market hours and sometimes after market hours.
I have not taken any position.
I just did 860 short straddle in one of my friend's account.
But IV has come down already.
FIIs have sold for Rs 600 crores and DIIs have sold for Rs 800 crores in Cash market.
But the sell figures are not so bad.
Right now SGX Nifty is trading around 11760, about 85 points higher.
Yesterday's fall seems to be a knee jerk reaction to Europe Corona virus resurgence.
Also expiry related issues played havoc.
I also lost heavily due to expiry trades.
That is part and parcel of trading game.
Banking stocks will be in focus ahead of HDFC Bank results.
Bank Nifty fell 1150 points from intraday high yesterday.
If yesterday's low is not broken today, then yesterday's low could be the low for this expiry.
Markets may consolidate and trade between 11660 and 12025 with huge volatility.
11661-12025 was the yesterday's Nifty spot range.
Reliance is struggling between 2200 and 2300 for a long time.
That is despite so many incremental positive news.
We can expect some sharp up move towards the end of the day.
Nifty future may trade between 11675 and 11880.

IMPORTANT : keep watching Granules India , Laurus labs, SYNGENE, ROSSARI ,it will be a life time opportunity for a horizon of 3-4 months, i will write a separate write up on the same .

Nifty Bank Nifty Over view for coming weekly expiry

noreply@blogger.com (VIPRA'SWORDS) — Tue, 23 Jun 2020 03:23:00 +0000

· Us Markets Ended Higher on Monday. Nasdaq Hit fresh all time high.

· Asian markets and US market fell suddenly at 6:45 AM

· US official mentioned in a tv interview that US china trade deal is over it means there would be no trade deals now, which market has take huge negative ,impacting us market ,this will be key driver today.

· US market and Asian market reacted negatively

· SGX nifty fell more than 100 points , there is again a tough nut ,which will time for markets to digest.

· Later Trump said china deal is still not over, it is intact, I don’ts know what kind of secret games do they play with each one has contradictory roles.

· Immediately US markets and Asian Markets recovered.

· SGX nifty after recovering traded around 10340

· Yesterday nifty crossed high of this series and then suddenly profit booking came.

· Reliance too had profit booking after a consistent rally.

· But Markets no longer only waiting for Reliance to take part in rally, it reached with strength

· Bank nifty has shot up 2500 points in 5 days rally.

· Nifty shot up 500 points in 5 days.

· Bajaj Finance 2200 to 2850 in a week’s time

· FII’s are net buyers in market cash.

· DII”s booked profit at each higher levels.

· Kotak bank largely shot up due to short covering, which was expected as build up shorts results with market rally and short covering came.

· Now nifty is reaching big resistance zone of 10400-500

· Reliance industries may resume rally after pausing 2-3 days.

· Without Heavyweights like RIL HDFC and TCS, Nifty can not cross 10400-500

· IT stocks will remain under pressure as US has called of All US visa programs.

· Even when yesterday Broader markets were good IT stocks were under pressure..

· Infact It was the only index which ended up in red.

· Today again IT index may hinder Nifty from travelling above the levels of 10400-500

· Infact we are at top and hence caution needs to be exercised

· Nifty Future may trade in between 10240 -10400

New weekly series Commencement: Nifty bank Nifty Outlook

noreply@blogger.com (VIPRA'SWORDS) — Fri, 19 Jun 2020 03:13:00 +0000

New weekly series Commencement: Nifty bank Nifty Outlook

Broadly it looks market has to be in range of following.

*NIFTY* - 10091.65

Resistance: 10175.6-10279.2-10454.5

Support: 9896.7-9721.4-9617.8

*BANKNIFTY* - 20956.3

Resistance: 21266-21619.4-22263.8

India VIX has started moving higher from last five consecutive sessions and moved above 33 levels. However, it is still moving below its major hurdle of 41-43 zone. Further rise in volatility index may result into roller-coaster move in the market. Currently, PCR of Nifty stood at 1.23 and Options data suggests trading range in between 9500 to 10150 zones in coming days.

SGX Nifty is down by 40, 50 points.
Yesterday the shrt covering rally came.
Day before yesterday, in the last one hour Nifty fell 150 points as PM speech was largely misinterpreted.
Yesterday PM spoke about Economy.
Then markets reversed.
Reliance hit all time high once again.
Banking stocks out performed.
Yesterday was a bad day for Option sellers.
Those who sold Call options lost heavily as Nifty shot up nearly 300 points and Bank Nifty shot up 1000 points from intraday low.
Those who sold Put options also had some bad experience.
India China border problem was blown out of proportion.
I have been saying that its effect in stock market will be very little.
Since markets made a big move, markets may consolidate today.
Now FIIs have turned net buyers in Cash market.
Usually markets make big moves in the last few days of expiry.
So expect a good move next week.
For this week, I said 9700-10350 is the range.
Markets respected this range.
For entire month, I said 9500-10500 is the range.
That is also respected so far.
Most important thing in yesterday's trade, India VIX fell.
Option premiums collapsed.
At some point, Bank Nifty was flat but 19000PE fell drastically.
When market moves higher, India VIX moves lower, that is when Covered Call people make lot of money.

Nifty future may trade between 9980 and 10120 a narrow range.

Look How brutal market can be , yesterday those call option writers who were thinking them to be king ,badly lost as premium has turned into negative,Hence it's called market ,you can never be sure that any of strategy will always work.

Kotak SBI ITC to watched for :weekly Expiry Nifty and Bank Nifty 18th June

noreply@blogger.com (VIPRA'SWORDS) — Thu, 18 Jun 2020 03:11:00 +0000

NIFTY* - 9881.15

Resistance: 9959-10063.4-10137.9

Support: 9780.1-9705.6-9601.2

*BANKNIFTY* - 20201.75

Resistance: 20539.7-20931.9-21243.3

Support: 19836.1-19524.7-19132.5

US markets ended mixed.
Dow and S&P 500 were trading in Green in the afternoon and fell in the last one hour.
Markets all over the world are highly volatile.
Just two days before, many Asian markets were up by 4 to 5%.
This is a tug of war between Optimism due to Stimulus and Pessimism due to Corona.
Yesterday our markets were trading well until PM spoke in TV.
PM said, soldiers sacrification will go waste.
People assumed that India may retaliate.
Suddenly Nifty future fell nearly 150 points.
Now due to Global cues, down another 70 points.
But as I said earlier, India can not handle China as it handles Pakistan.
Pakistan supports terrorism in Kashmir region indirectly.
But China does not support Terrorism.
Even in this clash, both sides did not use any weapon.
So it was totally unplanned, provoked by words of mouth, impulsive anger, etc that led to this kind of clashes.
Now markets will start worrying about Corona Virus.
Markets are likely to be volatile as usual due to Supreme Court AGR Case.
Kotak Bank is looking weak, broke QIP issue price yesterday.advisable to sell 1300 or 1320 CE
Since there are only 6 trading sessions, time decay will help.
Reliance is still showing some strength but market sentiment is not helping.
Even yesterday it crossed 1630 before coming under selling pressure.
Selling 1740 and 1760 Call options at Rs domain of 11-8 is safe bet
Those who sold earlier Bank Nifty Call options above 21500 (as Bank Nifty finding huge resistance around 21600 and that corresponds to Nifty 10350) trades are doing well.
FIIs have sold for less than Rs 500 crores and that is a good news.
DIIs did not buy as markets were firm until afternoon.
If Nifty moves towards 9720, DIIs may step in to support.
ITC broke 180 and it is down more than 15% from intra month high.
SBI also down about 15% down from intra month high.
Kotak Bank down more than 10% from intra month high.
Reliance is helping markets from collapsing.
Nifty future may trade between 9720 and 9920.

Reliance industry and HDFC to be watched for today;s session-17th June-Nifty bank Nifty overview

noreply@blogger.com (VIPRA'SWORDS) — Wed, 17 Jun 2020 03:11:00 +0000

Yesterday our markets were highly volatile due to Indo China border issue., Open interest consistently increasing at level of 10000,10100,10200,since its around eight lacs and above hence safely we can conclude that its call writers positions
During the market hours, 3 deaths were reported.
But later it reported that 20 soldiers died.
It seems that China side also had casualties.
Let me talk about Indo China problem separately.
Now Asian markets are consolidating yesterday's huge gains.
Some markets shot up 5% yesterday.
But we have under performed due to border issue.
HDFC Bank and HDFC supported the market.
After a long time I see HDFC Bank as Number 1 among the gainers.
Generally Housing Finance companies have done well yesterday. Both HDFC and LIC Housing did well.
Reliance is also showing Resilience.
FIIs continue to sell.
They have sold for about Rs 1500 crores.
So far in the last one week, they have sold for Rs 7500 crores or US$ 1 billion.
So today, due to continued selling by FIIs and local cues like Indo China border issue, it is going to be difficult to predict the market movement.
Only consolation is that we have only 6 more trading sessions and theta decay will favour the option writers.
Reliance 1720CE, 1740CEs are trading actively with good premium.
Since I am not expecting Reliance to cross 1700 in this expiry, I am looking to sell these Options.
Bank Nifty was very volatile as usual, yesterday 19000PE shot up from Rs 40 to Rs 340 and then came to Rs 75.
Now there is no hope for SBI. Though smaller PSU Banks did well, SBI has been doing very badly.
Before the results, it was trading around 175, after good results, now it is trading below Rs 175.
Nifty future should take support at 9780.
Resistance will be at 10000.
Need to watch Dow Futures, which is down right now.

Nifty bank nifty for 16th june20

noreply@blogger.com (VIPRA'SWORDS) — Tue, 16 Jun 2020 03:03:00 +0000

The roller coaster ride is on.
At some point yesterday, Dow future was down more than 1000 points.
But Dow closed in Green.
Bank Nifty future was down more than 1000 points down from day before yesterday high to yesterday low.
Bank Nifty is trading around 20K but making 20K moves in a month. 800 to 1000 points up move or down move has become common.
Yesterday market was supported by Reliance, if not Nifty would have broken even 9600.
Reliance has crossed all time high silently.
I am expecting a target of Rs 1700.
Today that will be interesting stock to watch.
All private sector banks fell significantly yesterday.
ICICI Bank was down by 5.5% at one point.
Banks and NBFCs did very badly.
FIIs have sold for Rs 2960 crores.
With this, they are sellers for fourth straight day and sold for more than Rs 6000 crores.
FIIs seems to be fairly short in the market.
They added short possitions in both Index Futures and Stock Futures, bought Put Options and sold Call Options.
That is the perfect situation for short covering rally.
Now SGX Nifty is showing a huge gap up of about 180 points.
There will be panic among short sellers.
That will take Nifty above 10K at least momentarily.
But after the short covering, I am expecting at least one dip, as FIIs are expected to sell further.
Moreover DIIs will like to book some profits at higher level, typically above 10K as they supported the markets at 9500-9600 range.
Sold Reliance Puts heavily expecting sharp move up side in Reliance.
In this kind of high volatile markets, short straddle is the best way to handle market volatility.
Premiums are so high on both sides.
While writing this blog, SGX Nifty is showing 10009.
All the beaten down stocks are likely to see short covering.
Nifty future may trade between 9880 to 10080.

Nifty Overview 15th June: strategy Nifty Bear & Bull call spread

noreply@blogger.com (VIPRA'SWORDS) — Mon, 15 Jun 2020 02:46:00 +0000

US markets recovered some losses on Friday.
But Asian markets are marginally down.
Dow and European Futures are down.
SGX Nifty opened slightly below 9800 but now trading about 80, 90 points lower than Friday's close.
IIP data from China came at 4.4% Vs expected figure of 5%.
But 4.4% is still better than 3.9% last month.
China and Hong Kong markets recovered some losses after this data.
Friday Nifty shot up from the low of 9500 to near 10000.
That was mainly due to short covering.
So markets may consolidate now.
Next wave of short covering will come only when Nifty crosses 10100.
Reliance has done one more deal for JIO investment.
So Reliance will be in focus, but falling Crude is not actually good for Reliance.
Watch Reliance for Rs 1620, if that resistance is taken out, it can go to 1700.
Banking stocks will be in focus after Supreme Court news that the case not about interest, the case is about interest on interest.
That is a big relief for Banking stocks.
FIIs have sold for Rs 1311 crores on Friday in Cash market.
It was DIIs buy for Rs 1945 crores that supported and triggered short covering.
FIIs were net sellers in Cash market for third straight day and that is not good news for bulls.
We have 9 more trading sessions for this expiry and markets may go for consolidation mode.
Nifty may trade between 9700 and 10350 this week.
Beijing closed a market due to Corona Virus, US is having more infections, India too having more and more infections.
Chennai and Delhi seems to be worst affected, Mumbai seems to be topping out.
Since there is not much local news, for next few days, we may just follow Global cues.
Nifty future may trade between 9800 and 10020.

Recommended strategy If Bullish view exist for Nifty for 18^th June expiry:

Nifty Bull call spread:

Buy 150 (2 lots) Nifty 9900 CE 18^th June @171

Sell 150 (2 lots) Nifty 10350 CE 18^th June @23.85

Level max Profit/loss Min Profit/ loss

10200 +19244 +7800

9759 -17200 -6500

Nifty Bear put spread:

Buy 75 (1lot) Nifty 9900 PE 18^th June @127

Sell 75 (1 lots) Nifty 9550 PE 18^th June @23.31

Volatality25% +-

Level max Profit/loss Min Profit/ loss

9650 +9122 +7402

10200 5475 -4610

Option chain analysis: Maximum pain theory and practical Implications:

noreply@blogger.com (VIPRA'SWORDS) — Sat, 13 Jun 2020 10:52:00 +0000

Option chain analysis: Maximum pain theory and practical Implications:

If you will talk about Option pain theory, very rarest of people ,you will come across who are very well familiar with this concept.,although idea of this term was coined in mid of 2004.

But any of the theory,wheresoever being applied, it has to make money for you and has got to have practical implications.

I have noticed this theory if used with two more indicators, works wonderfully well.

Option pain theory required you to be well versed with concept of Open interest.

In any of the strike price segment ,when people started noticing that 90 % of strike price most of time ending as worthless ,hence it came to know that option sellers are real kingmakers , who are making money.

Now here considering this theory as true , we can substantiate some facts which will be testified with practical results.

At any point only one party can make money i.e either the option buyers or option sellers, but not both. From the above statement, it is clear that the sellers are the ones making money.

If option sellers tend to make maximum money, then it also means that the price of the option on expiry day should be driven to a point where it would cause least amount of loss to option writers.

If point 2 is true, then it further implies that option prices can be manipulated, at least on the day of expiry.

If point 3 is true, then it further implies that there exists a group of traders who can manipulate the option prices, at least on the day of expiry.

If such a group exists then it must be the option writers/sellers since it is believed that they are the ones who make maximum money/consistently make money trading options.

Now it is apparent that there exists one point at the time of expiry where there will be lease amount of pain to option writers and maximum amount of pain to option buyers and as a trader we have to pick up that point only.

I have jotted four broad steps, which can make us reach to maximum pain at which options buyer will get a hit.

1) Quantify first of all a broad expiry level, since market has had sideways huge momentum since from 10250 to 9550 level ,we have to keep out domain broad..

2) Now screen up till Thursday a narrow range of expiry between 10100 to 9700 and calculate at each strike price amount of loss an option writer(both call and put writer will have ,if market happens to expire on that range

3) Add up the money for both call and put and focus on that strike price where loss looks very less to option writers as this is the probable point of expiry, where writer will have least loss and buyer will have maximum pain.

Now please undergo this excel, by this excel I have assumed one scenario of 9900 expiry likewise we have to assume two more expiry scenario as 10000 and 10100 and calculate maximum loss to call and put option writers and add up them for each expiry.

Strike price	Call OI	PUT OI	Money lost by 9700 PE writer on respectice expiry	Money lost by 9800 PE writer on respectice expiry	Money lost by 10000 PE writer on respectice expiry	Money lost by 10100 PE writer on respectice expiry	Money lost by 9700 CE writer on respectice expiry	Money lost by 9800 CE writer on respectice expiry	Money lost by 9600 CE writer on respectice expiry

9500	160650	2301600
9600	198900	1400775							106402500
9700	354675	1584600		na			70935000
9800	794400	1090425		0				79440000
9900	836850	867975	0		0			0
10000	1737825	637050			173782500	0
10100	1324650	298800			264930000
10200	1366875	85725			410062500

.this is one scenario we have to calculate also for 10000, 10100,don worry ,if we will have readymade excel formulae then we won’t have much issue in calculating.

Because it’s just from understanding perspective that I have used three strike price but in reality at least ten strike prices are to be taken both way and cumulative call and put loss and overall value is to be calculated.

This way when we reach to least amount of money lost by option writers, that may be point of expiry.

Most traders use this max pain level to identity the strikes which they can write. In this case, since 9900 is the expected expiry level, one can choose to write call options above 9900 or put options below 9900 and collect all the premiums.

Now the most crucial ,since introduction of weekly expiry ,each day due to many happenings market closes at some different point ,so I prefer to choose one common day say Monday to calculate the closing nifty and adding up buffer 2.3% to each side, like in this case if we take 2.3% of 9900 in each side it happens to be 10170 and 9670, hence make option writing accordingly.

This buffer you will have to take because we cannot be 100% sure and abide on one data only.

messege on comment box ,where the points are not understandable.

Nifty Bank nifty outlook and expectations 12th June

noreply@blogger.com (VIPRA'SWORDS) — Fri, 12 Jun 2020 02:47:00 +0000

US markets fell nearly 7%.

Second wave of Corona Virus, Fed cautious outlook for Economy, Nasdaq trading at all time high, all contributed to huge profit booking.

All stocks that shot up, airlines, cruise liners, all that benefit due to opening up of Economy, came under severe selling pressure.

In Feb 2018, Dow fell 5% during the market hours, when Asian markets opened next day morning, Dow Future fell another 5%.

Probably Institutional sell data was very bad that day.

But today, after falling 7% yesterday, Dow Futures is up nearly 300 points.

So that reduces damage in Asia.

SGX Nifty hit a low of 9400 yesterday night, now trading around 9600.

In fact we partially factored in in yesterday's trade.

We should not fall more than 2 to 3%.

DIIs may step in, in the afternoon to support the market. We can expect some recovery towards the end of the day.

Who knows? Govt may reduce GST rates in today's GST Council meet.

If anything like that happens and if US markets recover tonight, we see interesting Monday.

Markets have been highly volatile since May.

But Corona problem is getting worse in India, now India is fourth most affected country.

Yesterday both FIIs and DIIs have sold for more than Rs 800 crores each in Cash market.

Nifty 9900 was a good support but that was broken yesterday.

Next support is at 9500. With today's expected fall Nifty would have retraced 50% of the last rise from 9800 to 10350.

So logically that should be a good support.

Though there is an increase in Corona infections in US, US has no intention of closing the Economy.

I will not be surprised if Nifty closes above 9700 today.

SGX Nifty seems to be over reacting.

But markets will be under pressure in the morning, may be some margin Calls.

Now Nifty 10000 will be the resistance for the rest of the series.

So I am planning to sell CE above 10000.

SGX Nifty seems to be over reacting.

Nifty future may trade between 9500 and 9800

WEEKLY expiry and Nifty Bank Nifty direction

noreply@blogger.com (VIPRA'SWORDS) — Thu, 11 Jun 2020 03:00:00 +0000

WEEKLY expiry and Nifty Bank Nifty direction

-------------------------------------------------------------------

Please find below fresh report of option chain and OI build up on day of weekly index expiry , not much has changed actually and OI build up is same on the levels as it was yesterday hence trading range may remain in between 10020 to 10220.

OI build up is more in CE at strike price of 10300, 10400, 10500.put OI build up and writing looks only at level of 1000 and 9800.Hence looks market may remain in range

https://www1.nseindia.com/live_market/dynaContent/live_watch/option_chain/optionKeys.jsp

Important pointer before entering into trade

US markets ended mixed.
Nasdaq closed above 10K for the first time.
But Dow fell 600 points in last two days.
Fed event became non event.
Asian markets are mostly in Red.
SGX Nifty is down by about 50 points.
For the last three days, markets have been highly volatile.
But yesterday from 3 pm to 3. 15 pm, it was extra ordinary, Nifty shot up 100 points and Bank Nifty 500 points.
So it was a short covering rally.
Bank Nifty was too volatile, moving up 300 points and moving down 300 points many times.
That is why Option premiums were very high.
Even 18500PE which was more than 2000 points away, one day to expiry, it was trading more than Rs 5 (around 2.30 pm)
Despite such a power full short covering, HDFC bank ended below Rs 1000.
Both HDFC Bank, ICICI Bank under performing.
Axis and IndusInd looking very strong.
A key thing to note in yesterday's trading is that FIIs turned net sellers for Rs 900 crores and DIIs turned net buyers in Cash market.
Without significant buying by FIIs, Nifty may not move significantly.
So we can reasonably assume, 10350 is the resistance in near future.
As usual markets are likely to be highly volatile.
But underlying tone seems to be bullish in many stocks.
Say for example, ITC, Call premiums are higher than Put premiums.
This happens only when people take bullish view.
Supreme Court case regarding AGR issue is another key event, but that can turn out to be non event, just like Fed.
Reliance has met with huge resistance at 1620, at the same time it is not too bearish.
Will make some profit as long as it is trading below 1680 and maximum profit will be when it expires around 1620.
Nifty future may trade between 10020 and 10220.

Pre Market report -10th June -Nifty and Bank Nifty

noreply@blogger.com (VIPRA'SWORDS) — Wed, 10 Jun 2020 03:02:00 +0000

Curtain raiser for 10th June : Nifty & Bank Nifty

Please check OI data for 9800 put and 10400 and 10200 ,10500 OI data ,it suggests that there will be tough tussle between bulls and bears.

https://www1.nseindia.com/live_market/dynaContent/live_watch/option_chain/optionKeys.jsp

Indian markets have been highly volatile for last two day.
Nifty moved more than 200 points and Bank Nifty more than 900 points.
There was huge profit booking by DIIs in both Reliance and HDFC Bank.
Very rarely HDFC Bank makes such an erratic move, from 1020 to 1000, then to 1020 and again to 980.
Usually markets make such big moves on Wednesday, the day before expiry, to wipe out Option writers on one side.
This time such erratic, big move happened both on Monday and Tuesday.
Things were going well until 12.30 pm.
When European markets opened, huge profit booking came and most of the European markets fell 2%.
Dow futures fell more than 300 points.
Then short sellers have become very active and our market started falling.
This kind of big, violent moves come as markets shot up too fast from 9000 to 10300.
Before this big move, Nifty 9900-1000 was the huge resistance.
So that should be the support area now.
When US markets opened, Nasdaq hit fresh all time high again.
Asian markets are ignoring overnight fall in Europe and US. (Dow and S&P 500)
SGX Nifty is up by about 80 points, means Bank Nifty will be up by 200 points.
I mentioned earlier that 10350 which is 100DMA will be the resistance and 9900, which was the resistance earlier, now support.
Markets are respecting those levels.
For monthly, I said 9500-10500.
So far in the past, we always faced Fed meet with Optimism.
There is no reason to face Fed this time with Pessimism.
Fed never do anything against markets, that too in Trump era.
FIIs were net buyers in Cash market, normally this kind of markets, FIIs sell and DIIs buy but it was exactly opposite yesterday.
FIIs have taken bullish view in F&O also.
So yesterday's fall could be an aberration.
Markets may open around 10100, there may be some minor dip.
In the afternoon, things may improve and Nifty is likely to close above 10100.
Nifty future may trade between 10020 and 10220.
Important PCR ratios attahced have a look

Pre market report for 9th June 2020 -Nifty Bank Nifty

noreply@blogger.com (VIPRA'SWORDS) — Tue, 09 Jun 2020 03:00:00 +0000

CURTAIN RAISER for 9th JUNE NIFTY

S&P 500 wiped out all the losses of 2020.
Nasdaq is at all time high.US market closed higher
Asian markets are mixed.
SGX Nifty is up by about 50 points.
Yesterday morning I said, markets are opening gap up but Nifty future likely to break 10200, at least once.
But it broke 10200 and traded below that level and closed "Doji" pattern.
That shows indecisiveness.
We are struggling between positive Global and negative Local cues.
We are struggling between FIIs who are buying and DIIs who are booking profits.
OI at level of 10500 and 9500 is still very high
Hence markets are highly volatile.
Yesterday Nifty future fell more than 200 points from intraday high to intraday low.
Bank Nifty was going all over the places.
Bank Nifty future fell 900 points from intraday high to intraday low and recovered about 300 points.
We are under performing world markets and that may get corrected in the next few weeks.
Yesterday many index heavy weights like HDFC Bank, Reliance, Kotak Bank fell more than Rs 50 from intraday high to intraday low.
Surprisingly, yesterday HDFC Bank and Reliance contributed most for Nifty fall.
Since morning HDFC Bank was under performing, may be some index management.
Reliance met with selling pressure many times around 1620, so need to watch very carefully, if Reliance crosses 1620, it can go to 1700 lifting the Nifty.
In that case, even Nifty 10500 target is not difficult.
More shorts are being created around all time high price, one short covering is enough.
Auto stocks will be in Focus as Hero Moto declares results.
Yesterday's high volatile market and closing at Doji pattern indicates markets are likely to break out or break down.
The probability of break out is high.
So I am not selling any Call options except for hedging.
Nifty future may trade between 10120 and 10320.
Traders keep selling put options for next series and this series as well from 10200 to 10500