Trade setup for 5th July

 For now, it looks like the bottom seems to have formed. But I will consider that the upside will continue only when markets close above 16k and if there is a follow-through. In bear markets, the up rallies will be quick and will tempt you to enter. There is a high chance that it is a trap. 

Yesterday, I ran my algo on my zerodha account where the day ended with a profit of almost 13k on a capital of almost 6lak. I will run this for the entire month and will be updating in my blog, twitter and fb. Lets see how this goes. There is a lot of work to be done on that front, but for now, the direction seems to be right. 

I am selling PE which is deep OTM. Will sell aggressively closer OTM strikes if 16k is taken out with a follow through.

Yesterday, RIL was very volatile. Last week, it fell close to 7% when there was tax imposed on oil export. But yesterday, there was some stability and it did not fall much. This supported the markets and nifty gained significantly. The rally was due to banknifty. Banknifty seems to be less riskier bet for now. Banks are showing momentum and may not fall drastically. One can initiate the below trade in the weekly expiry

  • +1 X 33900pe
  • -3 X 33500pe
  • -3 X 33400pe
  • -5 X 33300pe
HDFC and HDFC bank merger is now approved by RBI. It was expected that this would be a smooth process. There might be some sentiment positive in this news.

Yesterday was a US holiday, so there is nothing much from the international markets.

The FMCG stocks are rallying. Yesterday HUL, ITC, Britania all shot up. ITC was a meme stock for a long time where it was not going beyond 200. Now it is at almost 300 in less than a year. Yesterday it made another 52-week high. If you are already an investor then don't sell this. Making fresh investments at this level is riskier. Even when the markets rallied they did not rally much and now when markets are falling, this is not falling much. 

The aviation sector is now having human resource issues. Maju jet employees have quit and have gone to Air India. We have Akasa(rakesh jhunjhunwala backed) airlines releasing shortly. The aviation sector is not a profitable sector worldwide. Let's see if new players come out with some innovations which will change the fate of the sector or not.

Another crypto exchange and lender Vauld has halted withdrawal and deposits. It was promoted by a lot of influencers on youtube, telegram etc. From now, make sure you don't follow any influencers blindly. Better to make our own analysis before investing our money. They were giving fixed returns to clients where they used to lend cryptos to others for interest. Now when the value of these cryptos have fallen drastically, it looks like the lenders are not repaying or the withdrawal rate has increased drastically. 

  1. Reliance down 7% and no follow. What else ?? So took this trade
    1. +1 X 2300pe
    2. -5 X 2100pe. 
  2. I have taken the below trade in nifty 
    1. +1 X 16000ce
    2. -5 X 16100ce
  3. Today I will be taking the below trade
    1. +1 X 15400pe
    2. -5 X 15200pe
  1. When US sleeps, the world sleeps. So nothing speacial from there
  2. Today the US futures are in the green and the Asian marekts are also in the green.
  3. SGX is suggesting a 50 point gap. I feel that gap will not be sustained. My algo might go short at opening and will manage the trade for the day. 
  1. The relentless selling is not stopping at all. I wonder, how much more do they have to sell. 
  2. FII sold for 2150c yesterday and DII bought for only 1700cr
  3. As I told before, I will not make any fresh investment in stocks till FII turn buyers. You can see now, stocks like hindalco, tatasteel, vedanta are all 50% discount from what they were few months back.
  1. Crude is at $114
  2. $ is at Rs 79