Nifty displayed a strong bullish move. Went long with covered call position

On April 6th, Nifty began the week with a robust opening at 22,780, marking a 65-point increase from the previous week's close. In the early hours, selling pressure was noted, pushing it down to nearly 22,500. However, strong global signals, such as a drop in oil prices and a rise in Nasdaq futures, allowed buyers to maintain control. By the end of the day, the upward movement resumed and held strong, reaching a daily high of 23,000 before closing slightly lower at 22,968.

The MHAF chart indicated a bullish trend by forming a moderately strong green candle (with a wick on the upper side). The closing price was significantly above the EBR/EBL band, as shown in the chart above. The spreadsheet below identified a bullish trigger at 22885, providing us with sufficient confidence to take a long position near the closing time.

As a result, we took a long position in April futures with 4 lots at 23070. To partially hedge this position, we sold 4 lots of April 23100 call at a substantial premium of Rs 587 (India Vix was above 25). This action established the following status as shown in the table below.

If Nifty does not make a sharp reversal from its current level and stays above 22500 for approximately 2 weeks, we can expect to secure 80% of the maximum profit possible (617.14 points). On the other hand, if Nifty falls below the 22500 support zone, our bearish reversal trade will activate at 22482 (BE point) according to the table.

The hypothetical Futures Only strategy that we have been documenting so far yielded a reasonable profit in March. However, we have chosen to discontinue tracking and reporting it, instead concentrating exclusively on the F&O strategy and the trades we initiated yesterday.

Cheers and happy trading