Now nifty is at the resistance level. This month has been a difficult month for coming out with levels, at least for me. Whatever support and resistances I identify are being tested. This has happened many times. When nifty was at 18600, I expected 18300 to be supported. That got broken, then I thought 18k is the support. Even that was broken. Then 18k became resistance, and again that got broken.
When nifty was below 18k, I expected 18150 to be resistance. Now we are at that level.
This is expiry week. So stop guessing what will happen in the market.
So whenever these things happen, the best thing to do is to trade in long term options or trade with 2nd level of support and resistance. For now, 18300 is the first resistance and 18700 is the next resistance. So I sold 18700 for jan expiry. If 18300, which is the first resistance is taken out, then I will convert that to ratio spreads, and then I will manage the ratio spreads. If this happens after 1 or 2 weeks, the theta decay will be good and 18300 may also be in profit.
Similarly, 18k is the first support and 17500 is the 2nd support. I will sell 17500 pe for jan series and will manage that in the same way as above. Make sure you have enough capital to do these kinds of trades.
Banknifty is showing strength. It has recovered most of the fall that happened last week and is again back to the uptrend.
Now the China reopening has improved the sentiment. The metal stocks saw that yesterday. Most of the metal stocks gained significantly. I am really scared to take trades in metal and pharma. If anything happens in China, metal stocks will react sharply. Anything, the US FDA does, the pharma stocks will react sharply. I try my level best to avoid these 2 sector shares for trading.
Now Tesla is down by almost 75% from its high. It is down for 7 consecutive days. Yesterday, it fell close to 11%. This is the problem with the US stocks. Our SEBI has managed our markets very well. In 2020 it was close to 30-40. It went up to 400 and now close to 100. Elon musk is busy in Twitter. Tesla has reduced output from its China plant.
In India, Adani did not fall like this, even though it went like a rocket in the last 2 years. Even now, I feel that 4k may not be taken out in Adani. I have already taken call ratio spreads in this. I will close the buy leg if it falls another 100 rs.
The tech stocks fell yesterday in the US markets as the yeilds rise. So, will we have recession in 2023?
Putin says he will not sell oil to countries who accept the oil price cap from Russia. He has also told Ukaraine that they should accept terms of Russia or they will make them accept.
MY TRADES
- For Jan series, I will be selling 18700ce and 17500pe
- I am not initiating fresh trades in this week expiry as the premiums are not attractive compared to the movement what is happening. Nifty on an average is making 100 point move.
- Today evening after 3pm, I will execute ATM straddles for tomorrow in small quantity.
- The US markets were mixed. Dow was flat, but the tech selloff led nasdaq to close with a cut of 1.5%.
- Europe closed in the flat range.
- Today the Asian markets are in the red. Some of the markets are opening after a holiday, so there is some adjustment.
- SGX is down with 80 points
- FII are selling again. This month they have sold for almost 10kcr
- yesterday they sold for 867cr and DII bought for 621cr
- Crude is at $84.5
- $ is at Rs 82.75. Today we need to see if 83 will be taken out or not.
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