Trade setup for 21st October

 Yesterday was another green day for India as the world was in slightly red. It was IT which came to the rescue. HCL tech shot up 4%. The IT index was up by more than 1%.

Yesterday there was a news which came that PM would address the press at 6PM. This made the markets a little volatile and the option premiums shot along with the vix.

The PM address at 6pm did not have much to do with the stock market. It was just a general address and it will be a non-event now.

The US markets are hoping for a stimulus and are now rallying. When the mother market shoots, children simply follow. 

Today we have the bajaj finance result. This is a high beta stock and also the margin is high. So I did not do any result trade.

Reliance and Qualcomm are conducting trials for 5g in India which will give internet speed of 1gbps. So today Reliance might be in focus and it might help nifty to shoot up. For the last few days, reliance, TCS, hdfcbank did not shoot.

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  1. Yesterday I added more hedges to my trades as there was a PM address. I did feel that there wont be any panic news to the market but it is risky to conclude and take the risk as you never know how these things happen. So today I will have to exit the hedges in a minor loss. The premiums will collapse immediately at the open.
  2. I had sold 12150ce yesterday when spot was at 11950. After that the PM address news was out and markets fell to 11900. Still my 12150ce premiums did not fall and it shot up and I had to close some of it in loss.
  3. Today I will be executing the below strategy in the banknifty
    1. +1 X 24000ce
    2. -1 X 24500ce
    3. -1 X 25000ce
  1. The US markets are rallying as the stimulus talks are on the way. Yesterday the dow and Nasdaq closed in the green. Today morning the futures are also in the green.
  2. European markets closed in the red. 
  3. Today morning the Asian markets are in the green. SGX suggests a flat start.
  1. FII have bought for 1500+ cr in cash and DII have sold for 1600+cr.
  2. Its a good sign that the FII are buying. 
  1. Crude fell as there was a sharp increase in the US inventories. 
  2. Now crude is at $42.89 
  3. $ is at Rs73.46