Trade setup for 26th May



Today is expiry day and finally, the volatile month comes to an end. We fell almost 1500 points and have recovered almost 400 points in this month. It looks like today we may settle somewhere near 16100. But anything can happen as it is expiry today.

The option premiums shot up yesterday in the last half an hour even when there was no major movement in the stocks or indices as there was the US fed minutes.

Yesterday, in the fed minutes, Powell told that there will be more hikes in the interest rates and the hikes will be in the multiples of 0.5. Markets knew this. There were no other surprises, so the US markets shot up and closed in the green. 

There is a fed meeting in the month of June and obviously, there will be a hike of 0.5% in the interest. I think the markets have factored in that and markets may not fall drastically after that. So for the next month, one can easily sell 15000pe as the fall will not be as drastic as this month. I will be doing this tomorrow after today's expiry.

Yesterday, Birla told that they will be venturing into paints on a big scale. Because of that, Asian paint fell by almost 8%. Now there are a lot of players in the markets as competitors. Before, Asian paints enjoyed a monopoly. So there might be more fall in the future. But it is a good dividend-yielding stock. So wait for another 10% correction and then probably, the valuation might be good to enter. Till then sell PE which is what I will be doing for this new series.

Aether is coming out with IPO. There is a lot of paid advertisements on social media for people to apply for this IPO. I usually stay away from these kinds of IPO which is promoted aggressively. 

Hindalco will be coming out with numbers. Numbers will be good, but we need to see if there will be any reversal in the price of the metal stocks. Most of the metal stocks have fallen more than 25-30%

Elon Musk has decided to go ahead to buy Twitter. He has reduced the bid. So that was also a sentiment positive for the markets which shot higher yesterday in the US.

Keep an eye on IT. They are at mouth-watering valuations and you may be tempted to buy. Hold your horses, you may get a better deal in some time. Even if you are buying, make sure you enter in phases which is what I will do. I will be buying Infosys for 50k today. FII are selling which is what stopping me from investing into all these in big way.

MY TRADES
  1. Today if the first hour low is above 16k, then I don't think we will be coming below 16k . I will be aggressively selling 16k PE after 1st hr
  2. The Reliance earning trade which I did, did not work in my favor as RIL was very volatile this month. Even after doing adjustments, things did not work. So today I have to close that with a loss of around 30-40k.
  3. The nifty monthly trades worked in my favor where the volume was very high. Today all the trades will be in wonderful profit. 
  4. This month, if you are closing in green then give yourself a pat on your back as it was one of the most volatile months I have seen and not many traders have ended in the green. I am proud that I am ending in the green.
INTERNATIONAL MARKET
  1. When the US rallies, the world rallies. When the US falls, the world collapses. The US futures are in the green.
  2. Yesterday the US markets closed in the green. Dow gained 200 points. Nasdaq also closed in the green.
  3. Today the Asian markets are flat. SGX is suggesting a gapup of 90 points.
FII AND DII
  1. For this month they have already sold 50000cr. March 2020 they sold for 65000cr. But in last 2 months, they have sold more than 65000cr.
  2. Because of DII and retail, the index did not fall.  
  3. Yesterday they sold for 1800+cr and DII bought for 2200+cr
CRUDE AND $
  1. Crude is at $114
  2. $ is at Rs 77.5



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