Trade setup for 16th Dec



 Finally, yesterday the markets decided to fall. As I told you, most of my trades were short, I was able to make a good profit in my positional trades.

I had sold 19000ce in the December series in huge volumes till yesterday as I was anticipating a fall soon. Now I am sitting in a decent profit in that trade. 

Sometimes, having a strong conviction also matters. I was shorting the market for every rise. You guys might have seen this in my blog. Even when markets went against me, there was some mtm loss and I did not do any adjustment. This conviction came from experience. There is no other way to learn that. Now I can take a deep breath. 

That's how markets behave. Yesterday all the PE that was sold had to run for cover. Again, I don't think this is going to end here in banknifty. Even now the risk-reward is in the favor of the shorts. Its a low vix environment where the premiums are low. So make sure you keep an eye on your trades and cut them if things go wrong. 

For next week, the stradle is at just 250. Yesterday, in a single day, the markets fell 250 points. In the bull market, the up rally will be slow but the correction will be sharp and quick. Its too early to tell this is correction or a pullback. Seeing the world markets fall and we making highs, it looks like more fall is needed to be in par with the global markets.

Yesteday, even the US had a bad day. Dow fell close to 100 points and closed at losing 800points. Even nasdaq lost more than 3%. It looks like the recession fears are now gripping the markets. 

ECB also hiked the rate by 50bps. This caused the fear in the US markets. The futes fell more after this happened. It was expected. Not sure why there was such a reaction after that. But that's market and that is supreme.

Centre has slashed the windfall tax on domestic crude. So the oil companies and RIL will be in focus today. 

IT is falling and leading in taking the markets lower. The banks have also now started to contribute on the lower side.

For now the resistance is 18800. Fresh long position will be initiated by me only if this is taken out on closing basis with a follow-through. I had told this before as well. I told that 18600 is the resistance. Day before yesterday it closed above 18600 but there was no follow through yesterday. Always wait for follow. Sometimes, the support and resistance can be trapped. 90% of the time, if there is no follow than the support and resistance will be right. Most of the people book loss or do some adjustment when the support or resistance is touched which can be fatal later.

There are no major event for the rest of the month, so there may not be any knee jerk reaction form the market.

MY TRADEs

  1. My algo is in drawdown phase. In dec, it gave a profit of more than 7% and is now in a loss of 2%. This is how the graph is. Lets see if we can end this month in green.
  2. I will be selling 18800,900,19000 ce for the December month
  3. I am executing the below trade for this week
    1. -1 X 435500ce
    2. -1 X 43500pe
    3. +1 X 42900pe
    4. +1 X 44000ce

INTERNATIONAL MARKETS

  1. US closed in the red. Dow lost almost 800 point. Nasdaq lost 3%
  2. Europe closed in the red
  3. Today the Asian markets are in the red. SGX is suggesting a 50 point gap
FII AND DII
  1. FII sold for 760cr and DII bought for 260cr
CRUDE AND $
  1. Crude at $81
  2. $ at almost 83. 

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