The current BPCL trade

Blabbering Trading Diary =

Well I do not possess the concept of stop-loss till my initial idea goes invalid.

Firstly we have a fuckload of IOC in covered call model plus we minted good in HPCL and IOC both by buying them last year and this January.

Check here -

https://in.tradingview.com/u/Amit_Ghosh/#search-charts=NSE:IOC

You will see dozens of buy buy buy positional… Buy!

Idea was simple and fundamental. Entry was technical but it went huge down afterwards and I kept it… It was like -1.3L per lot once too.

Anyways,

https://www.tradingview.com/x/hWFGi805/

The dotted line is the first trade. The second dotted line is sell trade. It is based on this rationale -

  1. Govt will divest BPCL. But it is only profitable for retail share holder if and if only there is an open offer.

  2. Govt generally makes open offer at 25% higher AT MOST based on statistics of last all data. points. Market has appreciated over 35% right now which will results in mean reversion.

That alone will reach out BEP of short but why continue the short -

  1. Govt has no benefit on open offer and Energy PSU is unlikely to open offered to minority stake holder.

  2. It will be offer for sale towards interested parties it may not trigger an open offer. This would be a negative. And we can see a mega gap down if there is slight mention of it anywhere.

  3. Now we may not get open offer in strategic sales too as we have two bamboos behind it - Subsidy Payment and PM Ujjwala Yogana. Thats a linchpin issue which can topple government due to large beneficiaries so no forecasting principle will say it will be good deal for someone who buys something and is obligated to donate something for free.

  4. Oil price is set to rise on November. Saudi effect comes at that time

Expecting a full reversion by December. Sell ATM CEs OTM CEs and keep over lotting. Although sell OTM PEs to get some momentum benefit too. I already made 30% of the unrealized loss back in options put shorting.

Fundamentals first and tells direction; technicals tell entry.