Trade setup for 6th July

  • Looks like there is a second wave of the virus. Spain has imposed lockdown in some of the areas. The cases are rising at an alarming rate. Now India is in the 3rd place in the carona cases.  There are many new companies working on the vaccine. Everyone is hoping that there will be a vaccine soon.
  • Coming to markets, the world markets are not caring for virus cases. All the markets are going higher and higher. We may go along with the global rally.
  •  Now many countries are going after China. France govt is asking telcos not to use Huawei components for 5g. 
  • 10900 is the 200 DMA. It looks like we may go and test that in some days and there is a huge resistance at 11000. It will be interesting to see if that is broken in this series. The 20DMA is moving along with the price thereby indicating that we may not fall sharply. 
  • This is more like a V shape recovery which we had. Let's see if this continues. 
  • We have lot of companies coming with results. So we need to see if this earning season can take the market higher.
  • Today HDFC bank will be the man of the match. It will take the nifty and banknifty higher. 
  • Going long in the markets now after such a massive rally will be riskier as the risk-reward is not in your favour. 

MY TRADES
  1. I was expecting some bearishness this week after nifty ran so much in the last few days. I had executed some call spreads in the weekly expiry. Today those will be in danger. I will be adding more legs to these trades and lets see how it behaves.
  2. I will be executing the below strategy in the monthly expiry
    1. sell 10700ce X 1
    2. buy 11200ce X 1
    3. sell 10700pe X 1
    4. buy 10200pe X 1
  3. I will create few butterflies today for this weekly expiry
INTERNATIONAL MARKETS
  1. The US cash market were closed on Friday. The futures markets are in green. 
  2. European markets closed in the red. 
  3. Today morning the Asian markets are in green. SGX is almost at its high and there might be a gap-up in our markets as well.
FII AND DII
  1. Now FII are buying in the market. On Friday, they bought for 840cr and DII sold for 330cr
  2. They have sold heavily, so this buying may not be convincing. Let's see how they buy today.
CRUDE AND $
  1. Crude is now at $43. This means that consumption is slowly rising.
  2. $ is at Rs 72.5




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