Trade setup for 8th June

 Sorry for not writing a blog in some time as I was busy with other business ventures. Coming to markets, today we have RBI policy which will decide the direction of the market. Yesterday the markets were choppy and it was expected. Whenever there is a big event market will be sideways or highly volatile. 

Everyone knows that RBI will hike the rate. That is factored in the market. The question is whether it will be 25bps or 40 bps. 25bps will be good news and 40bps will be a bad news for market. Guessing the direction of the market is like finding the path of a fish in ocean. So dont do that. Keep your volumes low or make sure you are hedged. 

Now covid cases are also rising. It's not sure if this is the new wave or will this go away. It's better to be careful and take the booster shot which is available(I have not taken it yet 😜😜). 

Islamic terrorist groups have threatened to carry out bombings in India. They have also warned some of the VVIPs. This might cause some chaos in society. Stock markets will not react to these threats. But, I hope the concerned people will not take this lightly and make sure the security is in place.

IT and banks were somewhat supporting the market. IT showed some recovery when nasdaq recovered and banks were not falling even when nifty was falling. But yesterday, all calculations went wrong and banks led the fall and IT has started to fall again. So, markets going higher is not that easy unless something really good happens. Can today's policy be that event? We need to wait and see. Personally, I dont think so as the global markets are weak. 

In this month, we have FED meet and that may change the sentiment depending on the commentary they provide and the action they take.

Yesterday Target(an American retailer) lowered its forecast indicating that consumer spending and economic growth will be lower. This caused volatility in the US market. Seeing all these, it looks like bad days are ahead. Even Elon musk tweeted that he is not happy about the economy. Keep an eye on auto sales numbers from now as that will give a clear picture. When the economy fails, auto sales will be impacted first as people cut luxuries than necessities.

The US markets are very very volatile. Yesterday the Nasdaq was swinging from red to green and finally managed to close in the green. 2020-2021 was an easy one-way market. Blind stock picking would have made you money. 2022-23 will not be that easy. Markets will trap overconfident people. That's how the markets are designed to work. Most of the new people who opened demat for the first time during lockdown to take advantage of work from home will be butchered. So play safe. As I told you before, don't underestimate FII. India is not yet developed to the extent where you can ignore foreign funds. I am not going to invest till FII turns buyers. 

The World bank has cut India's GDP forecast from 8.5 to 7.5%. Its common for these institutions to give these kind of commentary. Its not surprising. Very soon, moody will also cut. 

Reliance is trying to support the market. Lets see how long will this be successful.


  1. Very soon, RIL will also give up and take markets lower. So I executed the below trade
    1. +1 X 2900ce
    2. -2 X 3000ce
    3. -2 X 2980ce  Downside, there is no risk and upside its safe till 3040
  2. For this weekly expiry, most of my trades are in good shape as the premium was good and there was no major movement in the market.
  3. I had executed short strangles and some short straddles which are in good shape for now.
  4. I have executed the trade in banknity monthly contract
    1. +1 X 36000ce
    2. -5 X 36500ce
    3. -5 X 37000ce
  1. US markets closed in the green after being volatile
  2. Europe closed in the red
  3. Today the Asian markets are in the green. SGX is up by 90 points.
  1. FII selling continues. FII sold for 2200+cr and DII bought for 1300+cr
  1. Crude is now at $120. 
  2. $ is at Rs 77.7