In June series Nifty started fresh down move. Sell level triggered

On Friday 29th May Nifty took a sudden reversal move towards the end of the day which indicated the first trend change for the new June series. After closing all the trades in the May series with a minor profit, we have been waiting for a new trend to appear which seemed to be the case on Friday. Nifty formed a strong bearish candle, closed near the low of the day and the MHAF candle also confirmed the reversal.

The sell trigger for the day was calculated as 23701, however, in this strategy we do not sell exactly at the trigger but rather wait for the closing price to see a confirmation of the trend strength. In this case the price moved sharply lower towards the 23500 level confirming the signal and also with a favorable spike in the India Vix. Also, the premium on the Nifty futures shoot up to almost 250 points around that high time of volatility offering us good advantages to initiate the short position of the month.

Accordingly, we shorted Nifty futures at 23735 and shorted June 23500 PE at Rs 307 premium. This position gave us a maximum potential profit of 542 points (equivalent to Rs 1,41,000) with a breakeven cum reversal point to the upside at 24042.

For next few days our role will be to remain vigil on any sharp up move in Nifty to check if we need to reverse our position bias towards the long side. However, it looks like market will fall further in coming days. If 80% of the maximum profit potential becomes realizable at any point, we will close the positions for this month.

Cheers and happy trading.