Trade setup for 27th feb 2020

Lat 3 days have been very bad for the markets. This is a typical example and a case study of how markets can fall and lose its long term gains in some time. Going up is like climbing the stairs while falling is an elevator.
We underestimated the effect
Yesterday was a very volatile day and the nifty again fell and closed in the red. Now even the 200 DMA also got breached. Now the panic is no more limited to China. The panic is that the virus has possibly entered the US. There will be more panic if it actually enters and causes havoc in the US.


  1. I had to close most of my positions in a minor loss. I preferred to do this as there was no much option and today was expiry. So, I decided to take the loss and move on. 
  2. I actually lost most of the gains made in the month of Feb. This is common as a trader. But my loss was not more than 2% of the deployed capital. I am happy that I am able to maintain the discipline in trading. I feel that this is more important than gaining or losing. 
  3. I may not do any expiry trade today as markets move all over. Even if I do, it will be after 1pm and volumes will be really low.
  4. I have done some adjustment for some of the non-risky trades.
  1. The US markets opened well in the green and it seemed like markets would rebound and then came a piece of news that the US may have a new case of the Carona. Then the panic kicked in and the dow closed in the red and the Nasdaq closed almost flat.
  2. European markets also closed in the flat to negative.
  3. Today morning the Asian markets are in red. Hang Seng lost 100 points from its high. SGX suggests that we may open in the red.
  1. Crude is falling as the world consumptions are going down.
  2. Crude is now ar $52 per barrel. When was the last time you saw this? 
  3. Now the money is moving to safe havens which is gold.
  4. $ is now at Rs 71.61
  1. Yesterday FII sold for 3336cr and DII bought for 2785cr.
  2. Now, this was expected. FII's do not prefer to stay in the market when things are not certain.
  3. They are not just selling in India but also in the world.
  4. The best strategy now is to have cash in your account and watch the game and buy at the right time. 
  1. During panic phase, your technicals, OI analysis, max pain analysis do not work. So there is no point in discussing all these.
  2. The best trade for the day is no trade.