Timing Options Trades with the #Nifty50StockList

THE STRATEGY

As has been said before, the point of the Nifty-50 Stock List is to be able to see extremes, especially at the end of a down swing.

To reiterate the strategy is whenever 40 or more stocks on the list are on sells that is most often the bottom or the beginning of the bottom of a down swing. The buy signal is triggered with there are no longer 40 or more on sells.

Posted 5/12/2021:

Yesterday, 5/11, there were 40 stocks on sells. Today there are 38, giving the buy signal for the tomorrow’s open.

So what’s next?

The market is bullish on this signal until it isn’t anymore.

As a result:

Earlier this week, I think it was in the Facebook’s “Day Trading Stocks and Options Group” posted that some guy posted he had bought this week’s MSFT 270 calls at $1.20 per contract, and predicted the stock would jump to 278 by Thursday.

The call doubled the first day but he sure missed his Thursday prediction.

MSFT did not reach 278 until today, Friday.

And the 270 call closed today at $7.56 per contract, up $11, 600 on any $1000 committed to the trade.

A great, great call:

How he happened to pick that particular trade for himself I have no idea — MSFT does not usually move like it did today — but his trade does fit in with the…