A short trade on ITC is seen on charts...
What makes it a good short..
1. A perfect less RR
One can enter on the long in 300 ce at 2.45 and long in 300 pe at 14.25 with a target of 270 on ITC NOV fut..
IF ITC falls as expected.. value of PE will increase with greater appreciation and the max downside in CE will be 2.45 and that too at expiry..
IF ITC moves against the trade and start to move north, CE will gain momentum and PE will start decaying.. HOwever, my study says that the decline will be less than appreciation in the CE..resulting in a minor risk.. The total investment of 17rs will decay max to 15.. A loss of 2 to 2.5k
With a risk of 2.5 rs equalling 2500 on an investment of 17k, one can expect a return of 12 to 14k.. SInce the RR is 5 to 6 times.. SO, i consider it worth a risk..
2. Short trade confirmation on daily charts as per 315 strategy(tweaked to MA instead of EMA) discussed highly on this site
What makes it a good short..
1. A perfect less RR
One can enter on the long in 300 ce at 2.45 and long in 300 pe at 14.25 with a target of 270 on ITC NOV fut..
IF ITC falls as expected.. value of PE will increase with greater appreciation and the max downside in CE will be 2.45 and that too at expiry..
IF ITC moves against the trade and start to move north, CE will gain momentum and PE will start decaying.. HOwever, my study says that the decline will be less than appreciation in the CE..resulting in a minor risk.. The total investment of 17rs will decay max to 15.. A loss of 2 to 2.5k
With a risk of 2.5 rs equalling 2500 on an investment of 17k, one can expect a return of 12 to 14k.. SInce the RR is 5 to 6 times.. SO, i consider it worth a risk..
2. Short trade confirmation on daily charts as per 315 strategy(tweaked to MA instead of EMA) discussed highly on this site
