Trade setup for 2nd Jan

 Finally, the calendar year has come to an end. Usually, December month is a green month. After many years it has closed in the red. The most awaited santa rally did not come as expected. This is not just in India. It has happened in the same way in the entire world.

Even my algo closed in the red for this month. It has lost almost 8% for this month. This was as expected. December has always been a red month in the backtesting result as well. Ideally, I should not have traded this month, but I took the risk to check the algo and other operations. Since the capital was low, it was OK. Let's see what awaits in the Jan month.

Tata motors domestic sales numbers were out and the numbers are good. So there can be a short covering in this. I always keep a close eye on auto stocks as they tend to be impacted the most if there is a recession.

Avatar movie has collected more than $1 billion worldwide

The Russia-Ukraine war is not stopping and its not escalating as well. Every day, Russian drones are attacking. Now even India has voiced and asked both to sit and talk.

On Friday, nifty touched 50dma and fell. There was a sharp red candle at 3pm. Nifty fell almost 150 points in 5 min and banknifty fell close to 350 points. In fact, my algo suffered a big loss due to this.

For this month, 20DMA is the strong resistance. If you are a beginner and want decent returns then you can blindly sell 19k ce and relax for the entire month. After half the month you can sell some deep OTM PE and convert that to a strangle. 

The further movement of the markets depends on the numbers which the companies come out in this month. I will also be doing earning trades as well.

I am bullish for this month and I will take long trades once the 20dma is taken out.


  1.  I am selling deep OTM PE in stocks like bajfin, reliance, TCS where I will get 3-4% premium for the investment. I am willing to take delivery. I will do adjustments and if nothing works then I will take delivery.
  2. I will be selling 3 lots of ATM ce in nifty as a portfolio hedge for my investments.
  3. I have taken the below trade
    1. +1 X 17500pe
    2. -3 X 17300pe
    3. -3 X 17200pe
    4. -3 X 17100pe
  1. The US markets also closed in the red. Today the futures are also in the red.
  2. SGX is suggesting a gap down by 50 points.
  1. $ is close to Rs 83. It is teasing the buyers.
  2. Crude is at $86
  1. In dec, FII sold for 14kcr and DII bought for 24kcr