August series started with strong bullishness. We went long on Nifty

On Monday, 27th July, Nifty ended a five-day bearish streak by recovering and closing 228 points higher at 23,995. The following day, 28th July, marked the monthly series expiry, during which Nifty remained stable and closed with a 10-point loss at 23,985. From that moment, we awaited a new trade trigger, which occurred on 29th July. Despite the bullish trigger for that day being at 24,048, Nifty demonstrated a strong movement and closed significantly higher at 24,250. Consequently, we had no choice but to go long at this elevated level by purchasing Nifty August futures at Rs 24,303 and selling 24,400 August puts at Rs 245.25. Due to the lower implied volatilities at that time, we were unable to secure a higher premium, limiting our maximum profit potential from this leg to Rs 89,000.

From then on, Nifty maintained its bullish momentum on the 30th and 31st of July, eventually closing the week at 24,384. This was supported by its position above the EBR/EBL bands and the formation of consecutive green candles on the MHAF chart displayed above.

While the MHAF spreadsheet suggests a possible stop loss point for the ongoing bullish trend at 24,158 for next Monday, our existing position has established a predetermined reversal point at 24,058, which is currently at a safe distance.

Currently, our position is in the profit zone. If Nifty doesn't experience a sudden reversal and instead consolidates at this higher level for a while longer, we plan to book a profit of approximately Rs 72,000 and refrain from initiating new trades in this August series. However, if Nifty declines next week and closes below 24058, we will close the long future position and initiate a new bearish strategy while maintaining the short 24400 CE.

Till then cheers and happy trading.