Trade setup for 5th October

We had a 3 day holiday after the weekly expiry on Thursday. Many things happened on the long weekend. Firstly, we had Donald Trump has been tested positive for Covid. The US markets started dancing immediately after the newsbreak. The US markets fell on Friday and recovered slightly after there was news that he is recovering. The US is working on the stimulus package and they told that they will come out with one soon. The entire markets are looking for it.

Coming to our markets, we had a volatile expiry where the bears were butchered. Nifty shot up more than 150 points and the banks have come out strongly. Banknifty shot up 800 points as there were huge shorts in the system. They have a reason to shot up as today we have the interest-on-interest case verdict today in the Supreme Court. The govt has given an affidavit that they will take interest on their head. So today this might be factored in. But banknifty has fallen 4000 from its recent high and there is a room for more short covering. 

The Auto sales numbers which came was very good. This was expected as there was a festival. Even this month is expected to be good as we have festivals coming. 

The PMI data and the GST collections also look good. It looks like the demand is back and people are gradually spending more and very soon we may goto the pre covid levels. 

The $ index is also below 94 which is good for emerging markets like India.

There is huge amount of investments in Reliance retail wing. 


  1. I will keep my volumes low this week as Trump news is a little scary. Not sure if this is an election campaign plan to gain sympathy votes or he was genuinely ill. These politicians can go to any level to win. Trump's age is 70+ which is what scares me. So I prefer to stay away from when things are not sure. 
  2. Today evening, I will execute a few butterflies and some put ratio spreads. 
  3. I have some position in stock options which are pretty safe. Today I will buy some puts to be protected on the lower side.
  4. We will have the earning season beginning. We have TCS coming on 7th. Let me see if I can come out with a earning trade. Will share it here if I come with one. They are planing a buyback as well.
  1. The US was dancing after Trump got admitted. On Thursday, dow fell 600 points when Trump news came out and recovered 300 points. On Friday, it was negative but there was some calm when Trump was fine.
  2. European markets were flat on Friday.
  3. Today morning the Asian markets are in green. SGX is positive but we have to consider from Thursday. So considering that it is flat. So we may open in flat and take it from there.
  1. Crude fell on Friday after Trump news and is now recovering slightly.
  2. Crude is at $40
  3. $ is at Rs 73.14
  1. FII have finally bought for 1600cr and DII have also bought for 259cr.
  2. FII have sold heavily in last few days. So lets see how they will play today.