Trade setup for 28th Jan



 Just last week we were thinking that we would break 15000. But yesterday even 14000 was broken on the downside. I did expect this fall, but I thought the budget would trigger this. But that did not happen and it has happened in the last week of the month trapping all traders. Now the markets have clearly moved from buy on fall to sell on the rally. Almost 700 points fall in just 4 sessions. I think even covid fall was not so severe. 

Yesterday in the US markets, the US FED met and have decided to keep the rates unchanged and told it will pledge all instruments to support the economy. Dow fell 600 points in the last session. Now $ becomes a strong currency and money is flowing into this. As a result, metals and crude are also increasing worldwide.

Apple came out with wonderful results but no wonder the stock is down.  

In our markets, Reliance, HDFC bank, ICICI bank were the top contributors to yesterday's fall. 

This fall is a reality check after huge liquidity which was pumped by FII. Now FII are selling but DII are not buying at this huge valuation and the retailers are trapped.

In the US, a group of Reddit group users who are small traders have ganged up against the big institutions and are taking a share called gamestop to new heights. In this year it has gone up by 1700%.

 Now 14000 has become resistance. Unfortunately, this fall came without any trigger. I was waiting for a trigger. Markets surprised most of us. 20 DMA is gone. Now 50 DMA is the point to watch. I believe that even that might go in the feb month as the rally was too much stretched.

The company earning has been wonderful from many companies. Use this fall to buy into quality stocks. There might be more fall, but nobody knows that. You can wait for the budget and then take a small step by investing in phases.

MY TRADES

  1. Yesterday was a beautiful, trending day. I executed the put ratio spread. When markets were unidirectional, I executed huge volumes of call spreads. For now, all are in good shape.
  2. Today is expiry and I will be busy in expiry trades. I will keep my volume very very low today as markets are volatile. 
  3. I will not be doing any trade for the budget as well. Let things settle and then I will enter.
  4. So most of the positions will be closed today.

INTERNATIONAL MAREKTS

  1. Dow fell 600 points. Now small traders are ganging up against the big hedge fund. This is hilarious. 
  2. Europe also fell. 
  3. Today the asian markets are in the red. SGX suggests a 100 point gap down.
CRUDE AND $
  1. Crude is now at $55
  2. $ is almost at Rs 74
FII AND DII
  1. FII have sold for 1700cr and DII sold for 3cr.
  2. FII are now selling all that they bought these days. 
EXPIRY SETUP
  1. No point in seeing all data today as we are in a panic selling. 
  2. Keep your volume low. If possible, do not trade for today.
  3. Budget fears, international markets fears, expiry fears. All will play today.

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