Elder tripple screen = impulsive

Elder tripple screen impulse system
Monthly=chart flat consolidation mode long or short
Weekly=Impulse above 3900 long only!! (last time our short trade at 3900 worked out because we had the weekly trend on our side)
Daily=impulsive
meaning all dips to 13/21 ema =buying opportunities (13/21 ema reads 3840-3820 spot)


So on a purely technical foundation the short trade I guess is not even allowed :D.
Reason even though monthly chart says one can trade long/short, daily+weekly only allowing long trades!! (standard levels 3900 ka breakout hai na)
Then again trading long at 3556 on the way down was not allowed either and we got away with doing that. SL as always on option trades is price of option.
Legin agar aap ko tension hai then SL for put can be kept above 4100 spot or 15 rs I guess.
If it goes under 15 its probably going to 0 anyway.
Also as a hedge one can short 3800 puts for 15.
IF nifty goes 4100+ then take the 15 rs loss on the 3900 puts
and let the 3800 puts sold near 15 expire worthless. Net loss=near zero.
Thats assuming we don't do psychosis=4100 then 3760 :)).
Just do the math before you take a position.


In 2004 first rally or failed 5th whatever you want to call it did 0.7 retracement of initial collapse before the killer downswing game and of course all mechanical systems were long at the top near 1931 before the may crash came.
Anyway the corresponding 0.7 level reads 4040.
Nifty intraday swings seem to be targetting 4040-4084 right now.

support at 13-21 hour ema 3960-3920 for a quick cover for people who took the put and are now having second thoughts.
For those who can handle losing the 30 rs for the 3900 put.
Can hold; if we touch 3900 any time before expiry the puts will double.
Mind you my last 3 options calls have doubled. I can't be right all the time now can I. The odds don't favour it.


Is there any reason to short not really
:)
It all depends
Is this w3 or wc?
if this is w3 then new highs for nifty coming target 4186 immediate, 4440-5000 for impulse

bulls took out 3980 like it was too easy for them.
Interesting point sensex has not yet taken out its 0.62 level 138xx or so.

if market visits 4080 first then dip to 3980-3920 will probably get bought
Anyway time decay will kill the put position very quickly.
So look for exits within 3 days. Your position will have lost half its value from time decay within 5 days.

My option calculator values 3900 put at 30+
Stock:NIFTY-I Date:4/16/2007
Stock Price=4005.15
Strike=3900
Trading days to expiry:10
Volatility measured over200 Bars
Volatility=0.243506
Call=148.288
Put=31.8572
with 10 days left put=worth 30 rs
with 5 days left
Stock:NIFTY-I Date:4/16/2007
Stock Price=4005.15
Strike=3900
Trading days to expiry:5
Volatility measured over200 Bars
Volatility=0.243506
Call=126.57
Put=15.7756
put will be worth only 16 rs even if market only goes sideways and stays at 4000. (If nifty is up near 4200 after 5 days put would be worth damn near 0 :D)

So PLAN ACCORDINGLY

If nifty is near 3900 with 5 days to expire the put will still be worth 60
So I am planning to hold for my 2x target atleast!!

Right now market seems to be not very interested in 3900 puts since we have just staged a breakout
I managed to get them for 27.
When fair value is closer to 32.

Need a downside bout of volatility to make money
3920 gap fill bhi chalega for a small profit
just give me the gap fill before friday!! :))
If nifty expires at 3900 next week with a gap fill puts would be worth 0!!