Experts are very bullish about markets on basis that it is oversold and has formed 'Triple Bottom'

Discussion in 'Traders Corner' started by Michael Gonsalves, Jan 14, 2023.

  1. Michael Gonsalves

    Michael Gonsalves Member Staff Member

    Jun 26, 2016
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    Experts are very bullish about the markets on the basis that it is oversold and has formed a 'Triple Bottom' which indicates strong support & bullishness. Some have fearlessly sold large quantities of naked Puts on the Bank Nifty even though it entails unlimited risk on the downside

    Profit from retracement

    One of the indisputable realities of the stock market is that it never moves in a straight line. Every surge is followed by a plunge and every plunge is followed by a surge.

    Sharp traders who keep a sharp lookout and have tolerance for risk can pocket quick gains.

    The most recent example is that of a few days ago when the Indices were on a free fall. The Bank Nifty had broken its crucial support of 42000 and had touched a low of 41750. The PCR was 0.47 which implied an oversold market.


    Predictably, the market has since rebounded sharply and is now at 42330. Obviously daredevils who would have bought the plunge stand to make handsome gains.


    Nifty has now formed a triple bottom

    Rohit Srivastava of Indiacharts pointed out that the Nifty has formed a 'triple bottom' on the 1 hour time frame which implies strong support and a propensity to rise upwards.

    Ghanshyam expressed the same view by looking at the weekly chart of the Nifty.

    "Pichle chaar hafto so Nifty lagatar isi level pe bandh ho rahen hain. Iska matlab he ke Nifty bade move ki tayyari kar raha hai," he said.


    However, Ghanshyam did not assert that the move would be upside. He said there would be a big move which could be either higher or lower.

    Manu Bhatia has sold naked Puts of the Bank Nifty

    Manu Bhatia came into the limelight when he posted a screenshot of MTM earnings of Rs 1.20 crore (see Trader Makes Rs. 1.23 Crore (In 10 Days) & Explains How We Can Also Make Such Gains)

    He has a penchant for naked selling of Calls and Puts depending on whether he is bullish or bearish.

    A few days ago, he was bullish and had sold naked Puts and also bought a Call Debit spread in the Bank Nifty.

    Unfortunately, the Bullish view failed and Bhatia closed the trade for a loss of Rs 8 lakh.

    Bhatia has announced that he is again bullish and has sold naked Puts on the Bank Nifty of the strike price of 41500.

    This time, his conviction appears to be stronger because he has increased the quantity to 9000 as against 3600 in the earlier trade.

    Assuming the Bank Nifty closes above 41500, Bhatia stands to make a gain of Rs 7.74 lakh. However, there is an unlimited risk on the downside.