Trade setup for budget day


  1. Sorry for missing the budget day setup. I was full busy in lot of work. 
  2. Today is a major event and what can happen to the markets??
  3.  Frankly speaking, I don't know. It majorly depends on what the finance minister announces.
  4.  There is a huge expectation on various issues. LTCG, personal income tax cut relief and DDT(dividend distribution tax). If these happen then the FMCG can rally as the common man will get that extra room for spending.
  5. ITC is the favorite stock for traders during budget as taxes on tobacco product prices are either increased or not changed. Since taxes are not changed for a long time, the probability of increasing taxes is high. Obviously this is bad for cigarette companies(ITC, godfrey philips) but now ITC is now an FMCG company as well. So reducing income tax slabs will also be beneficial  for them.
  6.  I had sold ITC futures last month. I closed all the positions in last few days in good profit as we had resutls yesterday and I didn't want to take major risk. 
  7. For today, I am not doing anything major in trading as I am in doubt as to what direction the markets can take. 
  8. The corona virus is also playing a major hindrance for the markets to rally. So, I am slightly bearish at the moment. 
  9. Yesterday in the last hour, nifty fell close to 100 points from its high. Banknifty fell close to 300 points. Nifty has broken 12000 on the lower side which was a huge support. 
  10. So, budget should really give a major boost to the markets else we can see 11500 range in this month.


INTERNATIONAL MARKETS

  1. International markets play may not effect us for today as today the market will be completely controlled by Nirmala Sitaraman. Today is Saturday and no international markets can effect us as all are closed. We will be concentrating only on budget today.
  2. However, yesterday the US markets fell close to 2% and the reason was Carona, carona and Carona.
  3. Now the Carona fears are growing day by day.  
FII AND DII
  1. Yesterday FII sold for 4000+cr and DII bought for 3800+cr
  2. Now this is very bad. There was a huge selling by them in the second half. No wonder markets fell 100 points in the last hour yesterday.
  3. Monday move by FII will decide the further move.
If today's budget does not take nifty above 12000 then one can expect more downfall as nifty is respecting the chart as expected. It clearly broke 20DMA, then 50DMA and then 12000 support. 


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