Trade setup for 04th Jan

 Looks like this new year is going to be a bumper year as in the first 2 days we have made a wonderful start. It looks like the FII selling is over for now and from now they may begin buying. 

Yesterday was a fantastic day. The best part is that all the FII favourite stocks have started to rally. ICICI, bajaj twins, hdfc twins began rallying. Yesterday was a complete trending day and markets did not show any selling at any point. Trend followers did make a wonderful profits yesterday.

In my Twitter I had drawn a channel and I did suggest that any breakout and follow-through will be a clear indication of reversal and beginning of an uptrend. Now the low of 17200 will be a stong support. Till that is broken all dips are buy on dips. 

A small problem is that the FII are not fully participating as they are still in holiday mood. By this weekend we will get a clear picture. So sell some deep OTM puts for now instead of taking aggressive long trade.

The global markets are also giving support for the markets. Yesterday Apple hit $3trillion mark and fell slightly. It is more than India's GDP. 

As you see now all sectors are rallying led by banks and IT. The banknifty which was not performing has now begun to perform. This is the same cycle that is repeating when nifty was in the congestion zone of 16k. Even at those time, FII were selling, banks were not performing and then everything changed.

Is this the pre-budget rally??

The macro data is not looking good. The export figure is higher and even the import figure is at all time high. We imported $60 billion for December which is very high. Is that factored in the markets?

Tata motors replace Hyundai as the largest carmaker. This is how a bad performing company became the best auto company. Thanks to the EV segment which the tata's adopted early. This is how cycle works. 


  1. I did share trade on Friday where I had taken a call ratio spread. Now that trade is in danger where it's almost at my break-even point. I have sold PE aggressively in the weekly and monthly expires to counter that. Let's see if I can come out profitable in that trade.
  2. The butterfly trade which I took in the monthly series is also in mild loss but that is OK as we still have a lot of time.
  3. I have executed the below strategy in the monthly series and I have taken huge positions in the below trade
    1. +1 X 17200pe
    2. -5 X 17000pe
    3. -5 X 16900pe
    4. -5 X 16800pe
  4. I have sold PE of many companies and will take delivery if markets fall.
  1. Dow gained more than 200 points. Nasdaq also gained more than 1%
  2. Europe also gained more than a percent.
  3. Today the asian markets are also higher. SGX is flat. Lets see if there will be selling today at higher levels. Use any kind of dip to go long in the market.
  1. Fii have started to buy. Ysterday they bought for 900cr and DII bought for 800cr
  1. Crude is at $79
  2. $ is at Rs 74.2. Today due to import increase, $ may shoot and cross 75. So banks may not perform today.