Trade setup for 7th october


The nifty rose swiftly on 20th and 21st of last month. This was the day when the finance minister reduced the corporate tax and gave other sops. There was a huge gap in the candle. After that, the gap has been covered as nifty has consistently fallen from that point. The markets are showing that they are weak. But I feel that the swift gap has been covered. This week will be a crucial weak to take a particular direction. I will conclude that nifty is weak if the fall continues and breaches 11100. Now the risk-reward is less in short. At the same time, buying would not be recommended. Trade talks between China and the US may provide a trigger.
The rate cut by RBI did not provide many triggers to the market. In fact, markets did not like the rate cut by RBI. Maybe they expected a bigger cut.

MY TRADES

  1. I have sold yes bank 20pe and 25pe. To counter that I have bought 30pe. I will add more legs if the fall continues.
  2. I have executed bought some nifty deep OTM call options in case if there is a short covering.
INTERNATIONAL MARKETS
  1. The US markets rallied on Friday. Nasdaq was up by more than a per cent.
  2. European markets also closed in green. The major indices gained more than 1%
  3. Today morning the Asian markets are in a flat zone. SGX also suggesting that we may pen flat.
CRUDE AND $
  1. Crude is now at $58.13. Sometime back when Aramco's unit was attacked, it looked like we would cross $70 again. But the slowdown in the world economy has bought this back below 60.
  2. The USD is now trading at Rs 70.88
FII AND DII DATA
  1. FII sold for 682cr and DII bought for 606cr.

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