Trade setup for 04th Feb

 Yesterday was the weekly expiry and the budget rally which had started before the budget came to an end and there was a minor pullback. I can tell you that this was expected as markets cannot go in a single direction. In my weekly inner circle meet with students I told them that markets may close in red. This is definitely not the time to short the market.

It was autos and ITC which supported the market whereas RIL and IT led the fall.

Yesterday Facebook fell 26% after the daily active users fell and the company's earnings was not as expected. Facebook lost $200 billion in 1 day. The best part is amazon came out with earnings and that has shot up 17%. Snap has shot up 50% and pinterest up by 28%. But that came after the markets. So today you can expect markets to jump. We need to see if facebook will follow Netflix and recover or will it fall further. Thank god we have circuit limits in stocks(non-fno). Otherwise, just imagine.

Nasdaq fell more than 300 points. But now because of amazon, Pinterest, Nasdaq futures is up by 250+ points.

The US markets are very very volatile and our markets are following exactly what happens in the US.

Yesterday, ITC came out with good numbers. It has already shot up from 210 to 230. So let's see if there will be more moves today. I am expecting it to go higher from here also. The dividend is also good.

Bank of England has raised the interest rate for the second time in a row as inflation fears intensify.

Today you have tata steel coming out with its numbers.

The bad news now is that the FII selling is back. They gave a halt for some time and now again they have started to sell heavily.

RBI has given guidelines for the binary options and CFD platform apps to stop operation. So apps like octaFX, olymptrade will have to stop operation as it was a total gambling app where the counterparty was the company and it is impossible for the traders to make money. There are a lot of crypto derivative exchanges which are operating. We need to see if there will be a ban on them or not.


  1. I have started adjusting the positions in the back spread trade which I took in the nifty before the budget. I have started adjusting in order to increase the profit.
  2. All the trades that I took in the weekly expiry worked fantastically yesterday.
  3. I will be executing the below trade in ITC today as I have to do adjustments to the short trade which I took before the budget
    1. +1 X 230pe
    2. -5X 210pe

  1. Yesterday the US markets were in the red which was led by meta. Dow fell 500+ points and dow fell more than 300+ points. Futures are suggesting that today a major portion of that will be recovered. 
  2. Europe closed in there
  3. Today the Asian markets are flat. SGX is suggesting a +ve start. 

  1. Crude is at $91.5 which is bad for India. There is not much progress happening in the resolution of the Russia-Ukraine issue.
  2. $ is at R 74.5
  1. Yesterday both FII and DII sold. FII solf for 1500+cr and DII sold for 370cr