Trade setup for 2nd June

  1. Yesterday we had a wonderful rally to start the month with. The rally was lead by banks. The banking and the NBFC sector came back sharply. We have rallied close to 800 points in just 4 days. So there might be some profit booking and some consolidation. 10000 is a resistance point. Let's see if we cross that and we go beyond that. But overall it is a buys on dips rally now. 
  2. Yesterday the margins for hedged positions are reduced drastically. Saying this I am not going to increase my positions. I will do it gradually probably in a month. 
  3. The Carona cases are increasing but all countries are now done with this and are reopening the economy. 
  4. The RIL rights issue is oversubscribed. 
  5. Bajaj finance is again back to 2000+. Yesterday it did rally 10%. I have an equity position and I had executed the covered call. I am planning to roll over today if the bull rally continues in this stock.
  6. Moody has downgraded India's credit rating. The markets have rallied whenever Moddy downgrades. Let's see if we follow the trend. 
  7. Nasdaq is just 2% from its all time high. It looks like it will break that soon. 
  8. China and the US are again back to their dog fights. Now China has stopped some of the agricultural products from the US. 
  9. Trump is threatening to bring in the Army to control the protesters. There is a curfew imposed in NYC after rioters started looting. They have elections coming in some time. So it's common to expect this kind of incidents. 
  1. I have executed the spreads
    1. 8900pe buy, 9000pe sell
    2. 8900pe buy, 9100pe sell
    3. 8900pe buy, 9200pe sell
  2. I had many stock and index options which I had carried from last month. I converted them to spreads to release the margins.
  3. Yesterday I sold banknifty futures at 20100 and covered at 19750. Got a wonderful profit of 7000. I had shared this in telegram as well.
  1. The US markets have rallied from 2 days. Nasdaq is just 2% from ATH. The protest in the US caused some sentiment negative
  2. European markets were mixed. The DAX closed in the red but CAC and FTSE closed in the green.
  3. Today morning the Asia is in green. As we had a massive rally yesterday, we may have a slight negative start. Lets see if there is follow through.
  1. FII have bought for 1500+cr and DII have sold for 459cr.
  2. This is what we call a liquidity push.