Trade setup for 06th Jan



 Again markets have closed at a record high. 14200 also done. Every intraday dip is being bought and markets are making a new high. This is definitely not a market to enter and also not a market to short. There is no fundamental change but the liquidity gush is pushing the markets higher and higher. Huge money is pumped in all sectors, midcaps, small caps. That is how bull markets are. There is no point in coming out with the logic. Simply follow the trend that it lasts. I personally do not think that this can go on for a long time. But the thing is I am feeling this from 13k. I am not the only one. Many traders whom I am interacting with are feeling the same. For now, the best indicator is the FII money. Just wait for that to go on a break. All the major indicators are showing that the markets are overbought. But the buy on dips still remains till there is a clear sign of reversal. 

Some of the midcaps like alkyl amines have decided to split the stock. Fundamentally nothing changes, but the stock price shot up 15%. This is really crazy :) but the stock market is a crazy place and it is for crazy people. 

Now many companies are coming for IPO. Nykaa is planning an IPO with $3 billion valuations.

The Georgia runoff has made the markets volatile. This is a very critical seat and will decide the rate of Joe biden's agenda. 

Now Earning season will begin and we have TCS coming out with their result in this week. It has already rallied in this week. So lets see if the rally continues or  will there be a break.

Crude has shot up as Saudi cuts production.

Trump has signed orders to stop transaction with payment apps from China.

MY TRADES

  1. Now I am going with the flow. I have bought TCS futures
  2. I have bought Eicher motors in futures and I have sold a deep OTM call as a hedge.
  3. I have executed the below strategy for this week expiry
    1. -1 X 14000pe
    2. +1 X 13700pe
    3. -1 X 14400ce
    4. +1 X 14700ce
INTERNATIONAL MARKETS
  1. US gained more than 0.5% yesterday. They are very volatile ahead of Georgia runoff. 
  2. The European markets were mixed. FTSE closed in green whereas DAX and CAC closed in the red.
  3. Today morning the Asian markets are in red. The US and European futures are also in the red. SGX is flat. There will be buying if there is a huge dip. So wait for the dip and then go long. This is the simple strategy which is working for months now.
CRUDE AND $
  1. Crude is above $52 and yesterday it shot up 5% as Saudi voluntarily decided to cut production.
  2. $ is at Rs 73
FII AND DII
  1. Now FII have come down from 2000 to 1000. Yesterday they bought for 1000cr and DII sold for 500cr.
  2. This is the very very important indicator which I am watching closely.

Comments

Post a Comment