Trade setup for 12th May


  1. Yesterday was a bad day. We opened positively. Nifty gained 150 points in the morning. It was the Autos who were in full swing as some are opening their factories. The financials gained in the morning but by the end of the day, it was down. 
  2. Now there are fears that the 2nd wave of the virus may spread if proper measures not taken. 
  3. The world is opening up slowly. Shanghai Disneyland was opened after 4 months of lockdown. 
  4. Markets are in consolidated phase as we had a very volatile month of Feb and March. So Nifty will be in the range for some more time. It will go up and give you a false breakout and will retrace. Similarly on the downside as well. So be careful as trend following may not work now. 
  5. China data improves as there is a demand for metals. So even in our markets, the metals were in the green yesterday. 
  6. Nifty and Niftybank have taken 20 DMA as resistance. We should break that for the markets to rise further. Let's see if we take out that this week otherwise, we may fall more. 
  7. The only companies which are supporting nifty are Reliance and IT. Reliance has taken resistance at 1600. It will be difficult for it to move above this in the short term. So entering now into reliance may be a bad idea as it has rallied from 1000 to 1600 in less than 2 months. So wait for a pullback. 
  8. If FII continues buying then there will be a point where they will come back to financials. The underperformance in financials should come back for the markets to recover. You cannot have recovery without financials coming back.

MY TRADES
  1. Yesterday was a critical day for intraday trading. I sold banknifty futures and made a good profit. I am updating all intraday trades here https://www.niftynayak.com/2020/05/intraday-trades.html
  2. In options, nothing much trades were done as I already had positions.
  3. I thought of doing bajajfinance earning trade, but I already have a bajajfinance trade which is in profit. So I will be carrying that only. Anyway, I will do a video for people who can do the bajajfinance earning trade.
INTERNATIONAL MARKET
  1. The US markets closed in the mix. The IT sector is rallying so nasdaq closed in green, but dow closed in red.
  2. European markets opened in green but closed in red.
  3. Today morning the Asian markets are red. SGX says we will open with a gap down.
FII AND DII
  1. This is very good data. Yesterday the FII bought for 534cr and DII sold for 830cr. 
  2. If this buying continues and if 20DMA is broken on upside then we may head to 10k soon.
CRUDE AND $
  1. $ is at Rs 75.73. This rate is good for IT so we are seeing IT surging and taking the lead.
  2. Crude is at $29.75. It is good for India if it howers around this area.

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