Finally after a couple of months of having its own mind, our markets have shrugged off the decoupling effect that it had with the global markets namely the DOW or DJIA.

In my post on 13th MAY’20, I had mentioned that Nifty was not moving in tandem with the world markets and the biggest proof of that comes with the fact that we dint even come close to the highs that any of the global markets made. In fact, The Dow markets crossed its pre covid levels whereas we are still 25% below it. We are actually sulking behind or walking behind like a boyfriend whose girlfriend has found someone richer or cuter or cooler to be with. But the evidence in the offing is actually quite encouraging. If you notice Nifty in the previous 7-10 trading sessions, it has been completely undermining any bad news and marching forward. Even when the Dow fell swiftly, we opened gap down taking cues from it, only to recover back all the lost ground. Any and all bad news is being discounted by the markets. In fact the only risk we run right now is the global markets playing spoilt sport to our ongoing rally.

I would stick my neck out and say, even if the global markets were to stay stagnant, you would find our markets rallying. That is the kind of steam and left out feeling we have pent up. But if the globe sees a double DIP, then there is not much we can do about it. If you want to keep a level in mind, only a global downturn could cause our markets to draw down below 9720 in Nifty. Coming to being stock specific…

We continue to hold SBIN from our post in May which if you remember we bought around the 150-155 levels. In fact, I see a rally in many PSU bank names going forward. This has been the most beaten down sector and hence is the last one to awaken. Also keep in mind that July is a long series, hence an ideal month to get into some long strangles or paired hedges. I have Tata motors on my radar for this. I also am looking to form a bullish biased strategy taking august series into consideration. This would involve a mixture of futures and options, something like a cross between a futures butterfly and a call butterfly. It ensures my risk would be sub 5k per lot. Another stock we are looking to pick up is Maruti, will keep you guys updated on the levels soon.