Trade setup for 3rd Aug



The top news is Nancy Polocy visiting Taiwan. The entire world is watching this event as any aggression by China may trigger world war 3. Despite Chinese warning, she went to Taiwan. So China's dream of taking over Taiwan may be delayed if something changes fundamentally.

China has already put some economic restrictions on Taiwan by banning some imports and export to Taiwan.

We have had a fantastic rally for the last 4-5 days and RSI is in the overbought zone. So is this the trigger to sell off??

Yesterday, markets did fall in the first half. But there was a recovery which took nifty and banknifty to the green. Then at 3PM there was a massive selling which again took the markets to the red. But due to the weighted average, the close was in the green. However, the last traded price was in the red.

Markets closed in the green for the 5th day for now. WE have added around 900 points in 5 days. This is slightly too much. I will be selling CE if today there is a gapup.

It looks like now finnifty is getting traction but it's very low still. It's getting attention as the expiry is a different day. So speculators who do expiry trades will now get 2 expiries in a week. I am not comfortable with the volumes still. So I prefer to wait for some more. So now, you can expect Tuesday and Thursday to be volatile. These are some of the cases where the backtesting stats fail. There are many things that change over time and strategies which worked back then will fail miserably now. I am not telling you to stop doing backtesting, but accept the fact that the backtest result may not be accurate for the current market condition. So don't completely rely on that.

Now all the meme stocks are rallying. Yes bank, zomato all shot up more than 10% yesterday. Yes bank is rallying as Carlyle is investing and zomato earnings show that they may break even soon in the future as they have reduced cash burning as the availability of easy money is over. As I told you yesterday that this may be the right time to buy zomato for the long term. Again, invest in a small amount. Yesterday it closes in the upper circuit. 

Windfall tax is increased and duty on fuel is reduced. So Reliance rally may be halted for some time due to this.

Zomato bought uber eats and uber holds almost 7%. There is news that today uber will be selling it stake. So let's see what will happen to its price.

One of the top US brokers, Robinhood has told that they will be reducing the workforce by 23%.

This Friday we have the RBI policy. So now all eyes are on that.

India vix is shooting up, and markets are also up. RSI is in the overbought zone. This is the time to be cautious as the fall will be very sharp and quick.

INTERNATIONAL MARKET
  1. The US markets closed in the red as tension shot up in Taiwan + inflation fears still dominated.
  2. Dow fell close to 400 points and nasdaq fell 20 points.
  3. Europe closed flat.
  4. Today the Asian markets are in mild green. US futures are in the green 
  5. SGX is suggesting a +ve start.
MY TRADES
  1. My intraday system gave me a profit of more than 1% yesterday. I was able to make around 27000 yesterday
  2. I will sell 17500ce for tomo expiry if markets open in the green today. I will be selling it aggressively.
CRUDE AND $
  1. Crude is now at $100
  2. $ is falling and is now at Rs 78.6
FII AND DII
  1. FII bought for 800+cr and DII bought for 100+cr

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