NIFTY November 2020 – MoneyDhan

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Nifty is 1085 points up since opening for November month, at the time of writing this answer.

Today is Diwali , Saturday 14th of November.
Nifty closed at all time high.

Did you know,
Nifty never made a closing above 6.8% in November month till date. This means we should expect nifty to close below 12600 by end of November month.

Ofcourse, records are to be broken.

Did you notice how Nifty fell 8 % in 2011.

Now In 2016 read carefully,
Nifty fell from 8653 till 7916. This is a damn 8% fall !! This is not shown in the above table.

However if someone took a calculated risk and made a buy at 7916 levels , “hoping” that worst 8 % crash is the limit on downside….

The 2016 November ended at 8224. This is a cool 300 points rally from its bottom to close at 4.95% for the month. You made 300 points profit as a reward for taking that risk.

For nerds; 300 points in Nifty Futures means 21,000 rupees against 1 lakh margin. This is 21% returns.

Similar line of thought , action for this month could be as follows…

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Go short with a hope that , 13000 would not cross and close in November month. This is the stoploss level. This is 220 points away from current market price of 12780 (14th November 2020)

We hope Nifty will end at just 7 % up for the November Month. This means Nifty should close at 12500 for November Month. This is 280 Points down from present levels.

Now probability of a 10% rise in Nifty does exist. At moneydhan we always believe is asking for data as proof.

Notice how many times nifty made more than 10% rally in a month historically?

It is 7 times.

If nifty crosses 13000 in November 2020, ( next 2 weeks) That would be its 8th time. Not just rally above 13,000 but it must close as well.

This is how you can gauge that risk on short is lower w.r.t chance of winning with a short. Do comment what was the November 2020 close once November ends 🙂

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Money Dhan

Money Dhan

Sujith comes with 15 years of experience in the derivatives market along with Long term Wealth creation via Large-cap companies. His theory is: If risk-free Bank FD generates 100% in X years, the Stock market should provide that return in half the time.
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