Trade setup for 06th September

 Markets are just finding reasons to rally. Markets are rallying if there is good news and it will rally stronger if there is bad news. This is how the bull markets actually operate. Trading in bull markets is slightly difficult than bear markets because in bear markets the recovery does not happen quickly but in the bull market, the corrections are going to be sharp and markets may even turn bearish suddenly.

The US jobs data was not good on Friday. It was way below the estimates. The dow fell and closed in the red but it was not a dark red. Dow fell just 70 points for this.

The covid cases are rising and we are now clocking 40k every day for some days now. The markets are not worrying about this anymore. In Kerala, we have another virus called Nipah virus which has got some attention. 

The RIL has started rallying and it was one of the major contributors for the last week rally. RIL is on a buying spree. It is now buying a stake in strand life sciences. 

Today the Japanese markets are on fire. They are continuing to rally for the 2nd day. The Japanese markets are coming out of a long term consolidation. It has not even made its all-time high which was done more than 25 years back. The rally on the upside can be very strong if the all-time high of around 35k is broken on the upside.

The Indian rupee is improving so the IT revenue can go down. Now you can see that IT is consolidating.

Gold and crude oil imports are 2 things which is putting India on a backfoot, else India would be among the top 10 countries in the world. Now, to reduce the oil dependency, all efforts are taken to make use of renewable energy. RIL, Adani's are all betting heavily on these. If India's dependency on crude oil reduces then we can expect the country to grow more.


  1. This weekend I did a deep analysis on various strategies and now I feel that options seller does not have the edge which they used to have before as the new margin rules, lower premiums and volatile markets will pinch them. Now there is more minefield in the markets. The freak trades are adding more salt to the wound.
  2. From now I will be playing safely with reduced volumes. Anyway, the volumes have been reduced due to margin issues. 
  3. I will be trading in stock options now where I will be selling some deep OTM PE. I will be doing adjustment of the trade goes against me and I will be willing to take delivery if it falls further.
  4. I will be trading in monthly strategy in Index options.
  5. I had executed a put back spread for this month and the markets have rallied a lot. Now I did some adjustments and for now, it looks good.
  1. The US markets ended lower. 
  2. The European market closed in the red.
  3. Today morning the Asian markets are in the green. SGX is suggesting a +ve start.
  1. FII bought for 750+cr on Friday and DII bought for 650+cr
  1. Crude is trading at $71. 
  2. USD is at Rs 73