Market Setup 3rd August
Weekend is here and it seems the weakness in US had ended with S&P and NASDAQ has seen handsome growth while Dow Jones has remained more or less flat. The big news however is Apple, which becomes the first stock ever to cross 1 trillion dollars in Market Capitalization. That means just one stock of Apple is equal to 40% of India’s GDP and almost equal to Australia’s GDP. Look at the size of Apple and the wealth creation that it had made. This was the same company which was on the verge of bankruptcy in 1996-97. What a turnaround story that i-phone has created. Steve Jobs has given us the World what many have not even dreamt of.
On the domestic front, we had a reaction yesterday where Nifty fell more than 100 points. People are giving various reasons for the fall but my belief is, its nothing but a technical correction. Last 10 trading sessions have seen Nifty going up from 10900 levels to almost 11400 levels and that needs some correction before it sustains. These are technical corrections that one needs to take into account and sometimes they explain market movements more than the fundamental factors.
On the Q1 results front, the results have been good so far with some disappointment from Marico bit other stocks have done a fairly decent job. ONGC is the a huge relief as the results were more or less in line with the expectations. LIC Housing Finance came up with a fantastic results with 32% revenue growth and the NPA’s also come down significantly. Torrent pharma also had a Steller results with sales picking up in US and North America. The disappointment on healthcare front is Narayana Hridayala which reported a loss of 41 Cr.
Following are the Q1 results that are expected today.
2. Berger Paints
3. Nestle India
4. Nilkamal Furniture
6. Taj GVK
8. VIP Industries
On the derivatives front, there was a lot of selling that happened as the Nifty fell yesterday and the selling on the stocks was more than the index. That is proved by the fact that even at this selling, the Nifty futures premium went up from 27 points to 38 points though the long positions fell from 61% to 59%. That means when Nifty actually fell by 101 points the Nifty futures fell by only 90 points. On the options front, yesterday was the day when traders started buying calls as the nifty fell and premiums came down. 11500 call added 5.8 lakh positions while 11300 call added 2.1 lakh positions.
What is the Nifty call for the day?
Today the open will be positive and it might happen at 11280 levels and 11300-11320 will be a resistance again and it is crossed then only upside is possible. Today is the weekend and things can go in either directions and so dont be surprised if Nifty comes back to almost the same levels as we closed yesterday. So, it is better to avoid any trade today and wait and watch for the right cues to enter.