Trade setup for the budget day


  1. Yesterday was a good expiry day. Markets were calm and were a silent expiry. Though we got some NCLAT news, nothing major happened in the market.
  2. Today is the big day as we have Nirmala sitaraman presenting the budget.
  3. These are some of the expectation which mar trigger breakout.
    1. Reducing corporate tax from 30% to 25% (may not happen)
    2. Reducing GST on vehicles as the auto sector is in a bit of turmoil
    3. No change in long term capital gain.
  4. The most favourite stock during budget is ITC. Tax on cigarettes will either be increased or kept the same. Its good news if no tax change on cigarette products and bad news if more tax is put on cigarette products.
  5. We had the economic survey yesterday and chief economic advisor suggested that we need to grow at 8% to make a 5 trillion dollar economy.
MY TRADES
  1. I don't expect a major move in this budget. Saying that, I have closed some of my positions as I don't want to risk carrying huge positions for this event.
  2. I had 12000 July short straddles which I closed. I am having 31000 short straddles in banknifty.
  3. I will buy a few lots of ITC puts. I think there will be a tax imposed on cigarettes as usual.
  4. Will be sitting in front of the TV today. Will take trades as the budget progresses. Sometimes no trade is the best trade.
INTERNATIONAL MARKETS
  1. Yesterday was a USA holiday. 
  2. Europe closed in flat zone.
  3. Today morning asia is also in flat territory. 
  4. Today we have a major event. All these things may not matter. Markets will dance as the budget progresses.
CRUDE AND $
  1. UK marines seize Iran oil tanker. This is causing tension in world politics.
  2. Still, crude has not crossed $65
  3. $ is now at 68.49.
  4. Rupee strengthening is a good sign of our economy doing well.
FII and DII data
  1. Nothing much action by FII and DII on the pre budget day.
  2. FII sold for 28 cr and DII bought for 58 cr

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