Trade setup for 05th Jan

 One strategy which I have seen working consistently is the breakout strategy. It's very simple. Identify the support and resistance by cup and handle or channel or trendline or anything. If there is a breakout or breakdown with follow-through on the next day then the trend is more likely to continue. Fed days back I did share the channel breakout. We had good follow-through and the trend continued like magic.

I had some shorts in the system as markets were weak till last week and when there was a breakout and follow I added huge longs in the system and now my trades are in decent shape.

Now the Omicron variant has become serious. The cases are rising again everywhere. It's better to stay indoors till this thing is done and over. Not sure for how many years are we supposed to be like this. Now there is another variant that is identified in France. 

A lot of flight and holiday cancellation is seen as cases raise in India.

Delhi, Bangalore, Mumbai have implemented weekend curfews. It looks like we may have the 3rd wave and it's very important to protect kids in this as they are not vaccinated. So make sure to keep your kids indoors as much as possible and give them extra protection.

Yesterday markets were very volatile. Usually after 2 days of the spectacular rally all expected markets to correct slightly which is what markets do usually. After a decent gap up markets started falling and many traders got trapped as markets recovered and closed at the day's high.

Reliance, TCS, HUL, ITC, Infy and banks led the rally. All the FII favourite stocks.

Nifty has crossed 20DMA, 50 DMA but banknifty has cot yet crossed 50 DMA. So there might be some resistance for banknifty at 50dma. This is because banknifty has rallied 2500 points and usually after such a rally there will be a pause. Now the markets are clearly buy on dips market. Use every opportunity of the dip to go long. 

FII as expected have turned buyers and buying bigtime. This entire week numbers will probably give a clear picture.

There is still room for nifty to go higher as RSI of nifty and banknifty is around 60. Its indicating that they are not in the overbought zone yet. So don't think of shorting now. If covid takes a bad turn then things might change but that may not happen as now markets would have factored the impact of covid.

The US markets shot up yesterday to make a record close. But the tech stocks fell drastically. Apple after making $3 trillion in market cap saw some profit booking. It was autos which led the rally in the US as ford shot almost 10%

Toyota is now America's top-selling automaker. It was GM before.


  1. On Friday I took some short trades and from Monday markets have started rallying like markets have discovered gold. Now I am doing huge adjustments to all my trades and I have taken aggressive long positions. Lets see how it goes
  2. Most of the puts which I had sold in stock options are well in the green.
  3. Today I will execute some short strangle for tomo's expiry
  1. The US futures are lower. 
  2. Asian markets is flat as japan is flat, HongKong is negative. SGX is suggesting a -ve opening.
  3. Yesterday Europe closed in the green.
  1. FII bought for 1200 cr and DII bought for 532cr