Strong support zone. Positive Divergence triggered. Falling Wedge pattern on day chart. Target of divergence can be 220 -- 200 DMA. Target of Falling Wedge can be still higher.
Buy Feb future. Investment will be 111000 approx. Hedge by buying Feb Put 200 at 6. Lot size 3500. Total investment will be about 150000. If target of 220 is achieved it will give profit of 20 points. Put bought at 6 will become almost zero. Theta may eat up 1-2 points. So net profit may be about 11 or 12 points (11x3500=38000).
On the closing basis if price goes below 200, close the trade. There will be a small loss.
Trade setup has very good risk-reward ratio.
Buy Feb future. Investment will be 111000 approx. Hedge by buying Feb Put 200 at 6. Lot size 3500. Total investment will be about 150000. If target of 220 is achieved it will give profit of 20 points. Put bought at 6 will become almost zero. Theta may eat up 1-2 points. So net profit may be about 11 or 12 points (11x3500=38000).
On the closing basis if price goes below 200, close the trade. There will be a small loss.
Trade setup has very good risk-reward ratio.