HDFCAMC – Bullish Momentum with Short Covering Base

________________________________________________________________________________📈 HDFCAMC – Bullish Momentum with Short Covering Base
📅 Setup Date: 18.07.2025 | ⏱ Timeframe: Daily
📍 Strategy: Momentum Trade Setup with Defined Risk
________________________________________________________________________________
🔍 Overall View
Spot Price: ₹5590
Trend: Bullish Bias – Price sustaining above 5500 with momentum
Volatility: IV ~26–29%, relatively stable with mild contraction
Ideal Strategy Mix: Directional long with partial risk spreads
________________________________________________________________________________
1️⃣ Bullish Trade (Naked options as per trend)
Best CE: Buy 5700 CE @ ₹60.75
Why:
• Long Build-Up (+11.91% OI) with price ↑6.49% = bullish conviction
• Strike just ₹110 above spot → good balance of delta (0.41) and premium
• High TTV (₹89.9 Cr) and stable IV (~26.6%) → institutional activity
• CE 5600 also active, but 5700 is cleaner structure due to fresh longs
________________________________________________________________________________
2️⃣ Bearish Trade (Contrarian Trade – if present)
Best PE: Sell 5500 PE @ ₹59.5
Why:
• Short Build-Up on 5500 PE (+118.7% OI), but price ↓45.84% → strong put writing
• Spot comfortably above strike (₹5590), adding margin of safety
• IV stable → theta decay benefits seller
• Acts as support-level hold strategy in case of mild retracement
________________________________________________________________________________
3️⃣ Strategy Trade (As per trend + OI data)
Strategy: Bull Call Spread → Buy 5700 CE / Sell 5800 CE
      → ₹60.75 / ₹34.15
     Net Debit: ₹26.60
     Max Profit: ₹100 (spread width) – ₹26.60 = ₹73.40
     Max Loss: ₹26.60
     Risk:Reward ≈ 1 : 2.75 ✅
     Lot Size: 150
     Total Risk: ₹3,990
     Max Profit: ₹11,010
📊 Breakeven Point: ₹5726.60
📉 Reversal Exit Level: Exit if Spot < ₹5550 (invalidates breakout + weakens CE 5700)
________________________________________________________________________________
Why:
• Strong Long Build-Up at 5700 CE, resistance only mild at 5800
• High IVs make selling 5800 CE favourable → lowers net debit
• Defined risk with RR ≈ 1:2.75 fits your trade rule
• Market supports bullish continuation over 5600-5650 levels

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