Trade setup for 07th October



Happy Navratri to all. Hope this festival brings happiness and prosperity in everyone's life 

The day before yesterday nifty goes up 200 points, yesterday it falls 200 points, then today it looks like it will shoot up 200 points(going by SGX). Guessing the markets was difficult but now it is impossible. Trading these markets using directional strategies are very difficult. 

Yesterday the markets were volatile. Nifty opened in the green, then it fell around 100 points, recovered the entire 100 points and then fell close to 240 points. 

Reliance which led the rally day before yesterday also led to the downfall yesterday. It lost more than what it gained the day before yesterday. The banks came under pressure in the second half. It fell almost 600 points in the 2nd half.

Metals fell drastically due to China uncertainty. Bajaj finance had improved its asset under management which was good news. It shot up more than 100 in the morning and gave all its gains by the end of the day.

Crude above $80 is good news for companies like ONGC and it was in the green. 

The central banks of New Zealand have hiked interest rates. Tomorrow we have RBI policy and we need to see if RBI meddles with the rates.

The volatility is not just in India. Even the US markets are equally volatile. One day there will be a huge selloff in techs and the Nasdaq falls drastically as if its the end of the tech era. The next day it shoots up equally higher. 

Yesterday the US markets fell drastically. Dow lost more than 400 points in the opening. By evening dow closed in the green by gaining more than 100 points. Nasdaq also closed higher.

Bitcoin has come to the limelight again. It has gone to its 5 months high again and crossed $50k

Today we have the weekly expiry and things are expected to be slightly volatile.

MY TRADES

  1. Not many trades were done as I am fully invested in positions. 
  2. For this weekly expiry, my trades are slightly in the danger zone if there is a gap-up of 150 points as I had executed a short straddle yesterday during close and collected 120 points. The volume is small so nothing much to worry about.
  3. I may do some earning trade-in TCS today. Results are tomorrow.
INTERNATIONAL MARKETS

  1. Not sure what Americans are smoking. Dow is very volatile. Even that is playing the red-green game every day. 
  2. Europe closed in the red and lost more than 1%
  3. Today the Asian markets are all in green. Japan which lost 600 points yesterday has now recovered 450 points. Same with hong kong.
  4.  SGX is suggesting a 150 point gap. We need to see if this gap will be sustained or not.
FII AND DII
  1. FII sold for 800cr and DII sold for 900cr
CRUDE AND $
  1. Crude still above $80
  2. $ is also shooting. Its now Rs 75. Yesterday it shot up more than 0.5
EXPIRY SETUP
  1. Highest OI for nifty is at 17800ce and that of banknifty is at 38000ce
  2. So this level may not be breached. 
  3. There will be a huge gapup and markets may trade near the above level. 
  4. One can easily sell spreads above these strikes. Sell 17900 and above strikes and buy some deep OTM for margin reduction. In banknifty sell strikes above 38300 and above. 

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