Trade setup for 20th Aug

Taper tantrum is back!!! Luckily yesterday was a holiday else this would have been a bad expiry for many of us. Day before yesterday, there was a FED minutes and they told that they will slow their bond purchasing. This triggered the fall and the dow fell drastically. The world markets fell close to 1-2%. We were closed and our SGX fell close to 300 points. In a bull market, the corrections are going to be sharp. Now we don't know whether this fall is a minor correction or trend reversal. 

The midcaps and smallcapps had started to fall. It was nifty driving stocks which was rising. Also, the RBI gave permission to HDFC bank to issue cards which was a wonderful news. Despite that, hdfc fell. Maybe we should have got the sign. But nobody observed it so closely.

The RSI of nifty was above 70 and a correction was expected. Now this correction will not give people at the top to exit and will not give a chance for new traders to short. It's difficult to take a short trade when there is a gap down like this.

The world is again getting scared by increasing covid cases. The US has agreed to give the 3rd  shot to its citizens which WHO did not like as they wanted the vaccine to be given to other countries.

The china economic data was bad which has also affected the sentiment. Despite this, China did not change the lending rate which is what the markets are not liking. 

The US jobless claims were out and it seems to be good and +ve for the markets. 

Now many countries are taking sides in the Afghan case. The markets and trades will be impacted if anyone takes a major stance.

The crude oil is falling fearing consumption demand which is good for India. Fossil free steel is produced in Sweden. Slowly, the world is losing its dependency on fossil fuels.

The chip shortage is now a growing concern as many automakers are now facing the heat. Toyota has decided to reduce production due to this.


  1. I consider myself to be lucky for having a holiday yesterday as most of my positions were closed on Wednesday. 
  2. I executed just 1 set of the below 
    1. +1 X 16500pe
    2. -10X 16000pe
    3. +9 X 15600pe
    4. +1 X 16500ce
    5. -10 X 17000ce
    6. +9 X 17400ce
  3. Most of my stock options are in profit and today's fall, may not have a major impact on that.
  4. I am planning to close my SRF, Adain ent trades today as margins are set to rise.
  5. From today, I am planning for intraday trading only as positional trading is slightly risky. For now, I will be doing it manually. I may automate it in sometime after fine-tuning. 
  1. The US markets fell drastically yesterday and the US futures are in red. Dow fell around 500 points in 2 days.
  2. Europe also closed in the red.
  3. Today the Asian markets are also in the red. SGX is suggesting a 250 point gap.
  1. The institutions were not investing heavily from many days. So this kind of fall was expected to happen. But nobody knew when. These fall happens with a trigger. The FED would have provided the trigger.
  2. FII sold for 600cr and DII sold for 700cr on friday.