HDFCAMC โ€“ Bullish Momentum with Short Covering Base

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________________________________________________________________________________๐Ÿ“ˆ HDFCAMC โ€“ Bullish Momentum with Short Covering Base
๐Ÿ“… Setup Date: 18.07.2025 | โฑ Timeframe: Daily
๐Ÿ“ Strategy: Momentum Trade Setup with Defined Risk
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๐Ÿ” Overall View
Spot Price: โ‚น5590
Trend: Bullish Bias โ€“ Price sustaining above 5500 with momentum
Volatility: IV ~26โ€“29%, relatively stable with mild contraction
Ideal Strategy Mix: Directional long with partial risk spreads
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1๏ธโƒฃ Bullish Trade (Naked options as per trend)
Best CE:โ€ƒBuy 5700 CE @ โ‚น60.75
Why:
โ€ข Long Build-Up (+11.91% OI) with price โ†‘6.49% = bullish conviction
โ€ข Strike just โ‚น110 above spot โ†’ good balance of delta (0.41) and premium
โ€ข High TTV (โ‚น89.9 Cr) and stable IV (~26.6%) โ†’ institutional activity
โ€ข CE 5600 also active, but 5700 is cleaner structure due to fresh longs
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2๏ธโƒฃ Bearish Trade (Contrarian Trade โ€“ if present)
Best PE:โ€ƒSell 5500 PE @ โ‚น59.5
Why:
โ€ข Short Build-Up on 5500 PE (+118.7% OI), but price โ†“45.84% โ†’ strong put writing
โ€ข Spot comfortably above strike (โ‚น5590), adding margin of safety
โ€ข IV stable โ†’ theta decay benefits seller
โ€ข Acts as support-level hold strategy in case of mild retracement
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3๏ธโƒฃ Strategy Trade (As per trend + OI data)
Strategy:โ€ƒBull Call Spread โ†’ Buy 5700 CE / Sell 5800 CE
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒโ€ƒโ†’ โ‚น60.75 / โ‚น34.15
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒNet Debit: โ‚น26.60
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒMax Profit: โ‚น100 (spread width) โ€“ โ‚น26.60 = โ‚น73.40
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒMax Loss: โ‚น26.60
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒRisk:Reward โ‰ˆ 1 : 2.75 โœ…
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒLot Size: 150
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒTotal Risk: โ‚น3,990
โ€ƒโ€ƒโ€ƒโ€ƒโ€ƒMax Profit: โ‚น11,010
๐Ÿ“Š Breakeven Point: โ‚น5726.60
๐Ÿ“‰ Reversal Exit Level: Exit if Spot < โ‚น5550 (invalidates breakout + weakens CE 5700)
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Why:
โ€ข Strong Long Build-Up at 5700 CE, resistance only mild at 5800
โ€ข High IVs make selling 5800 CE favourable โ†’ lowers net debit
โ€ข Defined risk with RR โ‰ˆ 1:2.75 fits your trade rule
โ€ข Market supports bullish continuation over 5600-5650 levels

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๐Ÿ“˜ My Trading Setup Rules
Avoid Gap Plays
โ†’ Check pre-open price action to avoid trades influenced by gap-ups/gap-downs.
Breakout Entry Only
โ†’ Enter trades only if price breaks previous dayโ€™s High (for bullish trades) or Low (for bearish trades).
Watch Volume for Confirmation
โ†’ Monitor volume closely. No volume = No trade.
Enter on Strong Candle + Volume
โ†’ Execute the trade only if a strong candle appears with increasing volume in the direction of the trade.
Defined Risk:Reward Only
โ†’ Take trades only if R:R is favourable (ideally โ‰ฅ 1:2)(safe = 1:1).
Premium Disclaimer
โ†’ Option premiums shown are based on EOD prices โ€” real-time premiums may vary during execution.
Time Frame Preference
โ†’ Trade with your preferred time frame โ€” this strategy works across intraday or positional setups.
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โš  Disclaimer (Please Read):
โ€ข These Trades are shared for educational purposes only and is not investment advice.
โ€ข I am not a SEBI-registered advisor.
โ€ข The information provided here is based on personal market observation.
โ€ข No buy/sell recommendations are being made.
โ€ข Please do your own research or consult a registered financial advisor before making any trading decisions.
โ€ข Trading involves risk. Always use proper risk management.
I am not responsible for trading decisions based on this post.
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