Trade setup for 20th

 The covid fears are back and it looks like markets are taking it seriously this time as the data is showing some concerns. The cases are rising in the US and UK. UK reported 54k new cases yesterday. These countries had vaccinated a great percentage of the population and they had opened everything. Recently we saw how the football stadiums were crowded.

Indian markets fell close to 200 points yesterday and the Dow lost 800 points. This was the worst fall for dow in 2021.

Banknifty fell close to 700 points. So it looks like the cup and handle pattern did not happen and banknifty may not go to its ATH this month and we may have to wait for more. The reason was because of the HDFC bank results. 

Today you have ACC, bajfin coming out with results. Bajfin is being observed after HDFC. I think even this will miss estimates. I am planning to do an earning trade in this

Markets did rally a lot in a short time and usually, the earnings season will be the reality check. Most of the time the earning will not be able to justify the huge movement as implied volatility will be high. I thought that the last earning season would be a reality check but that did not happen. This earnings season is turning to be a reality check. Most of the companies are missing the earning estimate of the street. TCS, HDFC bank, HCL, Infy all missed the estimate. The estimates rose dew to rally which we had. The estimates would be low if we were at 14k. 

The bond yield is at 1.2 which is 5 month low.

Was yesterday's fall an overreaction? We will know that today if there is no follow through. In the "stock market week ahead" program, I did tell that there was no follow-through when 15900 was broken and 15600 can be expected. 

The monsoon session has started in the parliament and it was all about the spyware called pegasus which was used to spy on many politicians and journalists.

The crude crashed when OPEC decided to raise production and covid fears have also put a question on consumption.


  1. I am planning to execute this trade-in baj fin at open
    1. +1 X 6200ce
    2. -2 X 6300ce
  2. Most of my trades are in green as I did a timely adjustment yesterday.
  3. My zerodha account where i am trading in 2lak is in a loss of around 4k as I had sold 15700pe. I may do an adjustment today as tomo is a holiday.
  4. I will sell PE aggressively if nifty falls drastically as there might be a recovery.
  1. The US futures are seeing some buying at low levels. We need to see if this sustains.
  2. Europe also closed in the red yesterday and the futures are now showing some stability which is a good news.
  3. Today the Asian markets are in the red and SGX is suggesting a flat opening.
  1. Yesterday they just dumped everything that they had. It looked like they just wanted to clear everything yesterday. 
  2. FII sold for 2200cr and DII bought for 1000+cr
  1. As expected, crude fell 8%. Covid fears and slowdown in economy made it worst.
  2. Now crude is at $68