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Hdvance Hedge17
Chart heading

5%
35%

3085

Nitsh Kr. Singh

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NK STOCK TALK
STOCKTALK Class Date 15-05-2022
Topics Market View and Chart reading
H-17 Advanced formation and possibilities
Notes& Q&A
o

Market View: Using RSI.Try to find those things common 1

people is not aware of.This is the first time in 2 year after March
2020 RSI in Day TF falls below 30. Below 30 RSI means Nifty is in
oversold Zone. This means price is weak and can fall further. For
long trade RSI needs to come above 30. Here we have to check
higher Time frame and take decision accordingly. Trading in this
area is critical. Market can be extreme bearish if not comes
above 30 level of RSI. If a stock falls Rs.100 from Rs.1000 and RS
falls to 30 the stock can become Rs.10. This is the effect of RSI ienkevn iddtilinitn iuhihhibtitniltloititnt
Time frame may be different but effect is same. RSI level 13-14
extreme oversold area. n

To understand movement of nifty we have to plot horizontal line

at the lowest points as shown. Upper support area is 15700,Nifty| 12 1e334 23

has given a bounce back earlier and consolidated for 1 month at

that range. Lower support is 15400. Here is a chance for reversal
but target will be 20 SMA day TF. If price falls below 15400 Nifty
can further fall 1000 pt.
Upper side in day chart we have the resistance line touching 3
highs from October top. If we plot Bollinger Band upper median
will be at that resistance area pointed in the trend line. If price
rises to that area we will check the reversal pattern for trade thrnbunaikaatnnlethiulaintntuntakanitattianallii
confirmation. Such as at the 2nd fall price has canceled 4 days
trade in a single candle and confirmed the resistance.
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Downward sloping 50 SMA indicates that Market is in time wise
correction. For upside confirmation price needs to close above
20 and 50 SMA 50 SMA will need to curve upside to confirm the
end of time wise correction. f upper side resistance breaks 50
SMAwill automatically curve upside.
When these two SMA comes nearer there will be big movement.
Iin weekly chart 20SMA and S0SMA is near (this is not good) we
have to be cautious. When these two averages meets and
curving upside we will take trades bull side.
We can take Future hedge at 15400 area buy side with SL 15400 alalelithllniniGIITlt»dhilaillantan
will adjust below.
We can take Future hedge at 20 SMA Daily area sell side with S
close above 20 SMA will adjust if breaks.
Logic for the Friday (13/05/2022) Fall.(Bank Nifty) In
price has traded 4 hour at same area and its average (20 SMA
comes near it. Whenever this happens price will give reaction at
that area. Here price is below average and gives big movement
in sell side. Hourly TF pivot is also there. Hence price needs to
close above the pivot for further movement. As already told
when 2 or more resistance or support matches that is tradable.

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Logic for the Friday Fall.(Nifty) In nifty price was bullish and|
|closes above 20 SMA but Hourty TE pivot is also there. Hence
price needs to dose above the pivot for further movement. In
this case for long trades we have to check Day TF. In Day TF pivot
resistance is there hence we look for sell trades as Higher TF is in
sell. Buy side trade will only be taken in nifty closes above hourly
pivot or day resistance.
On 13/05/2022 Nifty was strong and Bank nifty was weak. Wel
can trade this kind of movements.

Nifty HourlyTE Nifty Day TE

Option seller trades for 1-2% per month with big amount of money. Advanced H17 can give
1 3% return in intraday. In Advanced H17 we use the concept of option behaviour using
various aspects af the market e.g.
a) Different options OTM, Deep ITM (replacement of future) and Nearest OTM.
Making of Advanced Hedge 17 and possibilities: b) Arbitrage conditions in Nifty and Bank nifty.
c) Market trend.
d) Trading as buyer, seller and future buyer.
Experience in this trade can change trading behaviour of the trader rising conviction, Chart
reading skill Emotion control at the same time can give regular profit. Loss chances is very
lless in soecific.canditionsthatcan he adiusted
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Prerequisite for the hedge.
1. Support Resistance identification. NearRenntanc 1540o
|2. Trend identification.
Support/Resistance can be identified using Horizontal line on
day close and Pivot points. Here in the chart 16400
nearest resistance in
Near support Resistance will be used for intrday and BTST. In daISNifty and Day TF is in Sell
Sell.
chart wecan find the day trend easily using Hilega Milega
and
Bollinger Band. SDay trend in sel)
This hedge can be used for Intraday/BTST/Scalping/ Positional
trades.
Trade will be taken against the major trend. i.e when day TF isin
sell we will take trade on buy side according to the lower Here in 10 M Chart Nifty is
trend using VWAP in 10 M chart.
Step 1: Fisrt step of the trade will be making a far OTM spreadintrading
above VWAP, HM is
buy hence we can take buy
next week expiry call side. Strike price will be chosen a5 per thel'n
nearest resistance identification. We found that 16400 is side trade.Sa we will make far
OTM spread in CE side. If we
resistance hence our sprcad will be
earn reasonable profit from the
Nifty 1640OCE May@ Rs99-Buy (1 Lot)
Nifty 1660oCE May@ Rs S6 Sell (1 Lot) trade we will exit the trade
resistanceaccordingly. our spread fads
If
We will stay
We stay in the spread till price comes to major
price comes below WAP
such as 20 SMA/ Pivot Point/ AVWAP/ PR-PS of Hourly/Day TF. i.e shown in the
the chart
3s shown
chart we will
we w
May expiry will be taken as next week as 2nd week expiry
nasinitiate 2nd Step.
Dassed and monthly expiry is also an weekly expiry.

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Step 2 (Advanced H 17): This will be executed in 2 cases.
1. When above spread fals
2.When price comesto a major resistance.
We have to find the near resistance ot BNF same way we found
for Nifty. Trade will be
Nifty 15500CE May Rs 581 Buy (1 Lot)
BNF 34000 CE May@ Rs.574 Sell{2 lot 50 Qty= 1 Lot of Nifty)
Here we buy deep ITM Nifty next week Expiry (with 60-70%
Hawa) and sell Near resistance area BNF next week expiry.
This is advance formation of H 17, In traditional H17 we buy
Deep ITM Nifty Monthiy option and sell BNF weekly options.
In 10 M chart BNF resistance is 34000.
in day chart Resistance is at 34700 area. In upside this trade is BNF 10 Mchart smaller BNF Day Chart
safe up to 34574 as we sell 574 pt. In upside This trade is TF Resistance 34000 Resistance at 34700
protected to 34574.

1. When thistrade give profit?
2. When thistrade need adjustment ?
3. What will bethe adjustments?.
1. This trade will always gives profit except 2 conditions.
i. Nifty Range bound and BNF Bullish.
i. Niftybearishand BNF mild bullish
2. Above2caseswe need adjustments.
3. Simple adjustment sell PE and book in intraday. Next day the trade will automatically give
profit. (ie it Nitty remains range bound or bearish and BNF rises next day Nifty must rise.)

4. What happen when VIX will rise sudden or fall ? 4. IH VIX rises or talls suddenly both cases profit will rise due to option behaviour. As we have
bought deep ITM (will rise if VIX rises/will not fall much if Vix falls) We sold OTM optians
(will not rise much if VIX rises/will fall if VIX falls). Abo oTM sprcad will have the samc vix
effect and will workin our favour.
5. When to avoid this trade ? s.Both cenario mentioned in Q-1. Wait for trend confrmation after opening when view is
clear make the trade.
6. What is the right time to take this trade? 6. No specific day or time can do anytime any day as per selt analysis.

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7.What is the logic for taking spread opposite the trend ? Opposite the major trend but supporting the minor trend of intraday. Because if price rises
will fall again tomorrow because Higher TF is in sell.
if chart reading is good use that for trade. In rising VIX Put side premium remains high. When
VIX cools then premium will down that can also be traded making this trade PE side.
8. What are the multiple uses of this hedge? a. Can use step 2 singly at BNF major resistance, VIX major resistance, Sellers day, or any day
when Nifty bullish BNF range bound or Nifty range bound BNF Bearish.
b. Can use on expiry day 50 point below spot Nifty call buy and next week expiry BNF sell.
c. Any day when market is range bound.
d. If BNF is bullish wait for the resistance area for trade.
e. According to thought process further uses can be developed.

Notes:
We can not predict market movement by viewing chart or analyzing data. Only pattern can guide future movement.
Avoid over trading focus on learning.Free your mind from recovery attitude. Recovery is not possible till you are chasing for recovery. Forget the loss and
focus on the process can make you profitable one day. avoid repeating the same error what gives you loss. Focus on your process.
Use weapons situation wise. according to chart. Such as H23 in range bound market, Future Hedge/ Spread in trending market. Chart reading skills to be
used for identitying right trade.
I f on expiry day market closes down then on Friday market will open with mild gap up and will fall letter
When price falls it will confirm in 1 hr TF but for rise we need 3 Hr confirmation or day TF. For rise it will take time but can fall in no time.
1 lot future movement in is equal to 2 lot movement of options.
For investment with 5 yr view can include 3 evergreen stocks 1. Pidilite 2. Asian Paints 3. CD5SL.
A19 8NE 36500 trade adjustment: A19 will be made when market is in mid range (may be 1500 pt up/down). If price crosses 38000 area we will shift the
strikes accordingly. If BNF falls in that case we will ageressively sell call options above 36500.

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