As expected, the break out bull run continuing in Nifty. Our position is in green

On Thursday 2nd July Nifty opened with a strong gap up by 57 points at 24062 and during the day never came down from that level. Throughout the day it progressed firmly to the upside and closed 170 points higher confirming the bullishness we expected in our previous post. On Friday before the weekly closing Nifty showed further strength by opening 200 points higher at 24375 but failed to sustain there. Immediately after opening it started drifting down and closed the session at 24270, still 95 points higher than the previous day closing. Today on 6th July it again moved higher with strong conviction and is up by 150 points at the time of this writing.

During these last 3 days the MHAF chart formed 3 strong bullish candles. As per our spreadsheet which calculates the triggers beforehand, the buying trigger was breached on 2nd July sitting at 24095. That day Nifty closed at 24175 hence we initiated our first bullish position by going long on Nifty futures and simultaneously selling 24300 CE.

We bought 260 qty July futures near the end of the day at 24260 and sold equal qty of 24300 CE at Rs 277. Because of sharper drop in India Vix during recent days, we received this relatively small amount of premium which reduced the maximum profit potential from this combination to Rs. 317 only. This is not very desired but we decided to still go ahead and see how the trades unfold over the next couple of weeks. Accordingly, our reversal point to the downside now sits at 23983. If this level is not breached during the next 2 weeks and the upside momentum continues for some more time, we may not have to reverse the bias and 80% of the profit potential will be achieved prompting us to get out of the trades for this monthly series.

Right now our position is showing an accumulated, unrealized profit of Rs 32000 and our target is to close down by booking at least Rs 66000 for this month by deploying only Rs 7.5 lac as margin money.

Cheers and happy trading.