All posts by Sriram

A Teacher trying to Learn new things and explore the world each day! Believe in Happiness by the virtue of sacrifice and forgiveness.

Market Trade Setup 10th December #NIFTY

Market Trade Setup 10th December

Firstly today Nifty is going to open on a big gap down and the entire blame of it need not be taken by the exit polls. Friday was a horrible day for the US market where Dow Jones lost more than 550 points on the fears of global slow down is being a reality now. NASDAQ is even-more worst as it lost more than 3% and the Brent Crude has risen by over 5% and quickly it moved from 59 dollars to 62 plus dollars on the back of a cut in oil production and a drop in US weekly inventories. Asia is also in deep red today morning with all the markets down by more than 1%. Hong Kong and Japan are close to 500 points down. 

Coming to domestics, we have many problems to deal with. First is the fiscal deficit which comes at 2.9% of GDP up to Q2 of this financial year. It is a very bad sign as spending is very high and the Govt is unable to control it. Brent Crude going up more than 3 dollars will put pressure on some of the oil marketing companies but the news we can’t ignore is the Exit poll results. There were 9 exit polls which were conducted for 3 states of Rajasthan, MP and Chhattisgarh. For Rajasthan, 8 out of 9 exit polls say Congress is going to win and 1 exit poll predicts a slender win for BJP. In MP 5 exit polls predict win for Congress and 4 exit polls predicted win for BJP. In Chattisgarh 4 exit polls predicted a win for Congress and 5 predicts a win for BJP. So, not a good news for the markets. 

On the derivatives front, the last one hour of trade saw some bullish positions coming onto the market. Though the Nifty futures positions remained stagnant with longs and shorts almost in equal, the options market saw Nifty put-call ratio going up from 1.44 to 1.47 levels. 10500 put added 4.9 lakh positions, 10600 put added 4.6 lakh positions and 10000 put added 4 lakh positions and 10000 put now has the maximum open interest at 41.9 lakh positions. On the call side 11200 call added 5.1 lakh positions and 11100 call added 3 lakh positions and 11000 call though has shed open interest, it Chhattisgarh the highest in open interest. All this will change today if nifty opens big gap down.

What is the Nifty call for the day?

Global slowdown fears, increased Crude prices, worsening fiscal deficit and exit polls throwing up possible losses to BJP will mean we will have a huge gap down of more than 120 odd points and we might open around 10550 zone and that means we will be back to protecting 10500 again. On the downside 10480-10500 will offer support and a rally in the late day might take Nifty past 10600 mark. So, I suggest going long on this fall around 10520-10550 levels with 10620 as the target

Bhagavadgita Chapter 14 Guna Triya Vibhaga Yoga Verse 15

Chapter 14 Guna Triya Vibhaga Yoga Verse 15

Rajasi pralayam gatwaa karmasangishu jaayate;
Tathaa praleenastamasi moodhayonishu jaayate.

Meeting death in Rajas, he is born among those who are attached to action; and dying in Tamas, he is born in the womb of the senseless.

Interpretation

After talking about the sattva guna and where the sattvik person’s soul will go after the death, Lord Krishna focusses in this shloka about Rajasik person and the tamasic person and where his soul will go after the death and where he would be reborn in his next birth. Lord Krishna in the first part of the shloka talks about Rajasik person and says that a person who dies with Rajasik guna will be born in the family where the majority of those are engaged in Rajasik dharmas or attached to the action. Similarly, when he dies with tamasic gunas in him intact, he will choose a womb of a senseless family which has no direction.

Extending Interpretation to Mankind’s Life!

This shloka is very simple but needs to be understood in the right context with all its complexities.

You will have two or more siblings in a family. Will they all choose the same guna as parents? Will they all have the same guna? Will father and mother both have the same guna? These are the points to be considered. Firstly, we have to understand that the soul doesn’t have eyes or ears to see and hear to decide which womb it wants to take. All that soul has is the ability to sense vibrations of a particular guna and then decide on the basis of it the right womb it wants to enter.

Its a very complex process and it mainly depends on the knowledge that a soul possesses. A soul which is in higher lokas has more knowledge and aided with that knowledge and the senses available, it might make lesser mistakes than the other souls which are at the inferior lokas. When a soul is choosing a womb it just goes by the feel of vibes coming out from a person doing a sattvik, Rajasik and Tamasic activity. Understand that if you are meditating or learning or sharing the knowledge you emit a vibe in the universe which has a frequency giving it a shape of particular guna. If that is caught by a wandering soul, it gets attached to it and it decides to take birth in that family. 

Similar is the case with a person doing a Rajasik and Tamasic activity. A soul that is attached to Rajasik activity picks up the vibe of the same person when he is doing a Rajasic activity or of a lady who he is married to. If a husband is Rajasik and wife is sattvik then the children born to them could be of both gunas because of the vibes that they emit. Similar is the case with Tamasic guna. Also one needs to understand that a person is not 100% Sattva, Rajas or Tamas. If a soul attached to Tamas guna catches the vibe of a same Rajasic person when he is engaged in the Tamasic activity, it might decide to be born there thus making a mistake.

Here the Tamasic soul is more susceptible to make errors as it has least knowledge. A person might be 80% Rajas and 20% Tamas but the soul might decide to be born in that family when the father is engaged in the Tamas activity which occupies only 20% of his time. Thus after being born, a person decides that he is born in a wrong family. Typically you have leading businessmen or politicians aspiring for power, their sons will be useless. This is purely because of the wrong choice that a soul can make. Thus a family can have children from Sattva, Rajas and Tamas guna though the parents might just have one or two gunas.

Bhagavadgita Chapter 14 Guna Triya Vibhaga Yoga Verse 14

Chapter 14 Guna Triya Vibhaga Yoga Verse 14

Yadaa sattwe pravriddhe tu pralayam yaati dehabhrit;Tadottamavidaam lokaan amalaan pratipadyate.

If the embodied one meets with death when Sattwa has become predominant, then he attains to the spotless worlds of the knowers of the Highest.

Interpretation

This is the first shloka where Lord Krishna talks about what happens to a person who has followed the sattvik Guna after the death. Till now we were mainly focusing on the predominance of all the three gunas and the natures associated with it. In this shloka, Lord Krishna talks about a person who embodies himself with sattvik nature and lives the whole life following the qualities of sattva like seeking knowledge for attaining happiness. Such a person with his predominant sattvik nature when attains death, goes straight to the spotless worlds of the knowers of the highest. Knowers of the highest are the seekers of happiness through knowledge.

Extending Interpretation to Mankind’s Life!

Some time ago who have studied about the seven lokas that exist along with Bhu Loka. Bhu Loka is for everyone who is having a body. After death, the body is buried and the soul goes to different lokas depending upon the amount of spirituality it holds. Here Lord is talking about a sattvik person attaining different lokas. A Sattvik person by the nature of only concentrating on knowledge and deriving happiness from it usually doesn’t aspire for a Swarga Loka. The comforts of Swarga Loka doesn’t entice him as he has already seen them before.

Yes, that is the point that is being made here. Look at a person who relinquishes the material comforts for the sake of knowledge. When we ask a lakh people to choose between money and knowledge, not more than 1 or 2 would opt for knowledge. The others want money as they give comfort but a sattvik person looks at knowledge giving him comfort. Such a person is qualified to go to higher lokas like Mahar Loka and Gnana Loka than going to Bhuvar Loka or Swarga Loka which is for inferior souls. These Mahar Loka and Gnana Loka are called as the spotless lokas as souls over there overcome most of the material desires and are on a constant quest for knowledge. 

Predictions for Assembly Elections 2018 #India #Elections

This is neither an exit poll nor an opinion poll. It was not done by taking any sample or meeting any voters on the ground. We have taken the data from the past, observed the trends of voting and percentage of votes at the first level. Then we looked at the candidates contesting, which party they belonged to before, as the second level. Then the third level is the campaigning done by top leaders of BJP and Congress and how they were able to swing the voters. All these are based on my observations and from the news reports.

The methodology adopted for each state is different and it is as follows

1. Telangana: We have only one election ie 2014 data which is relevant as the state was carved out from AP in 2014 and the political equations before were very different and hence irrelevant. Here we looked at every constituency and the votes polled for TRS and compared it with INC-TDP. We have not just taken a mathematical value but we based it on how many votes of TDP can be perceptually transferred to the Congress. For every constituency it is different. We have also taken into the note of the fact that the desertions that happened in TDP, INC and YSRCP and all of them went to TRS and how it can impact on the ground level. Many were given tickets in this elections also. So, we looked at the winnability of a candidate from that angle also. and projected individually for all the 119 seats.  

2. Chhattisgarh: Here also we have gone constituency wise and we looked at the 2008 and 2013 elections and their results and the candidates who have been changed and the candidates who were kept constant. We also looked at the possible impact that BSP-Ajit Jogi combine will have on the elections and have come up with the forecast for the 90 seats. 

3. Madhya Pradesh: Here we have gone region wise. We have divided Madhya Pradesh into 5 regions of Malwa, Bhopal, Mahakaushal, Vindhya Pradesh and Chambal and we have subdivided these 5 regions based on the 52 districts in MP. We looked at the data of 2008 and 2013 elections and have assumed and made projections on the fact that if there is a uniform 7% swing against BJP in this election from the 45% vote they got in 2013 what will happen to each region. We have averaged 2008 and 2013 and on that average, we took a 7% swing to project for the 230 seats.

4. Rajasthan: This is the toughest as no party got elected twice. so, taking 2008 and 2013 won’t be sufficient. So we went back and took 1998, 2003, 2008 and 2013 data which has 2 congress wins and 2 BJP wins and projected for 2018. We have divided Rajasthan into 7 regions of Bikaner, Shekhawati, Hadoti, Vagad, Mewar, Marwar and Dhundhar. There were many factors like Rajput anger on BJP, Anger against Vasundhara but positive perception of Modi, traditional BJP and INC strongholds that were considered. Like MP, for Rajasthan also we have gone for district wise predictions for all the 7 regions covering the 200 seats. 

All this was done for an educational purpose and by combining analytics with ground level incidents and not taking any voter opinion. So, the accuracy entirely depends on how well we were able to capture the mood of the past voter and mixed with the present political dynamics and project the voting trends and converting them into seats.

Market Setup 7th December #NIFTY

Market Setup 7th December

The Weekend is here for the first week of December and what a forgettable week this has been! Dow Jones has fallen another 800 points and from there it recovered to close just 80 points in red. That 700 points plus recovery on US markets has sent a positive global signal. Fed’s statement that it will wait and watch before going in for rate hikes has pushed the sentiment. Asian markets have recovered and have come to the positive territory wit Hong Kong, Japan, Korea and China in mild green. The Dollar also has weakened a bit and Brent Crude also has fallen below 60 dollars again and now trading at 59.1 dollars per barrel. 

Coming to domestics, today is the day of elections in two crucial states of Rajasthan and Telangana. BJP started as a big loser in Rajasthan and 3 months ago everyone was talking 130 plus seats for Congress and from there, things have dramatically changed. Rajasthan today has become as unpredictable as Madhya Pradesh and Chhattisgarh. Telangana also has from a position of a cake walk to KCR has turned itself into a heated battle between KCR and Mahakootami. The market will get the feel of the sentiment by 2 PM today and we can see it getting reflected. Added to this is the exit poll results which will come today after market hours and that will lift some suspense from the results. 

Coming to derivatives, yesterday also saw huge selling in the Futures market and the overall long positions in Nifty futures has come down to 56% from 57% and this is the lowest in the series. On the options front, the Nifty put-call ratio plunged to 1.44 from 1.63 seen at the beginning of the day. Lots of put positions taken on the long side were unwound and a lot of short positions in the calls was also taken. 11000 call has added 13.1 lakh positions, 10700call added 9.9 lakh positions and 10900 call added 4.8 lakh positions. On the put side, 10500 put saw 5 lakh positions taken out. 10900 put saw 3.9 lakh positions taken out. 10000 on put side and 11000 on call side still continue to have highest open interest. 10200 and 10500 puts are close and might add some open interest today. 

What is the Nifty call for the day?

Finally the fall seems to have come to an end. We did nothing but watching it. One has to understand that stock trading is all about waiting patiently when unforeseen things happen, try to come out of it without panic. Global growth scare came from nowhere and took away 300 points from Nifty. Today we will recover some of it if other things go fine. Today Nifty will open gap up between 10660-10690 levels and 10750 is very much a possibility today on an intraday basis. If the sentiment in Rajasthan goes fine we can even see a close at 10750 levels. So, the losses that you made will be cut down drastically today. Hope for the best and wait for the next week when the actual results will be out!

Bhagavadgita Chapter 14 Guna Triya Vibhaga Yoga Verse 13

Chapter 14 Guna Triya Vibhaga Yoga Verse 13

Aprakaasho’pravrittishcha pramaado moha eva cha;
Tamasyetaani jaayante vivriddhe kurunandana.

Darkness, inertness, heedlessness and delusion—
these arise when Tamas is predominant, O Arjuna!

Interpretation

This is the third part of the three shlokas where Lord Krishna was explaining to Arjuna about the situations where all the three gunas will be predominant. He says that through wisdom and knowledge Sattva guna is predominant and through greed, activity and restlessness Rajas guna will be predominant. In this shloka, He concentrates on when the Tamasic guna will be predominant. Living in ignorance which is like darkness, having no activity at all makes a person tamasic. Not only that heedlessness which is the inability to listen to others and the delusion which is the wavering mentality of an individual also gives rise to Tamasic nature. 

Extending Interpretation to Mankind’s Life!

When you meet certain people you will be surprised by the amount of ignorance they hold. This happens especially when you go to rural areas and meet the people over there. They live in a completely ignorant world unmindful of their basic rights and duties. They just live a life thinking that God and Government have to take care of them, provide them with sources of livelihood. They just do what is told to them. They never have the inclination or zeal to acquire any skills out of their own interest. Such people are the classic examples of people living in darkness and in India you will find 2/3rds of the population living in total ignorance. 

Ignorance leads to delusion where one gets into wavering mode very easily. One never sticks to what he is doing and always looks for opportunities to escape from that work. That escapism comes from the quality of inertness. Inertness is a total dislike for doing any activity. Opposite to a Rajasik person who always does some activity or the other, and unlike a sattvik person who constantly quests for knowledge, a Tamasic person loves doing nothing. Anything forced upon him, he will leave it in days and goes back into the inertness. The liking for inertness gives him heedlessness. Heedlessness is when you become stubborn and don’t listen to others.

When a person is living in ignorance and inertness, naturally wise people around him will want to make him active by either seeking knowledge or doing some meaningful work. But the tamasic person resists this with his stubborness. He thinks that being stubborn is being stable minded. He imagines in himself that there is a goal for him which he wants to achieve and he is set to achieve that, at his own pace. He also feels that nobody can understand him nor wants to listen to him. These are the symptoms of deep ignorance in a person and such people are predominantly Tamasic in nature, says Lord Krishna.

Market Trade Setup 6th December #NIFTY

Market Setup 6th December

Fear has no bounds! It can come at a time when everything is alright and take away everything that is alright! We were seeing a handsome recovery and US was showing a lot of signs of growth with GDP coming higher in last few quarters and the Fed made lot of positive statements. Just 2 months ago everything in US was looking bright with jobs data at its highest in a decade and the unemployment at its lowest. Suddenly, fear of whether this growth will sustain or not grips and takes away everything that has grown till now. Global fears are still ruling the markets across the world. US markets were shut yesterday in respect of George W Bush but Dow Futures which are trading in other markets are giving negative cues. Even now Dow futures are down 300 points. Result is every Asian market is in deep red.

Domestically, we are going to vote tomorrow and the campaigning in all 5 states is finally over. The last phase of polls and Exit polls will come tomorrow after market hours. But what is important today is the OPEC meeting today where there is an expectation of supply cut. Will it result in Crude prices going up needs to be seen. There is a global growth scare that means lesser demand to crude so supply cut might not impact that much. Yesterday was the monetary policy day and the policy is more or less on expected lines, including the SLR cut. As I predicted SLR is cut by 150 bases points in multiple quarters by 25 bases points starting from January 2019. So, monetary policy failed to make any impact on the market that is gripped by global growth scare.

On the derivatives front, there was a massive selling that happened in Futures market especially by FIIs who sold more than 1100 Cr in the derivatives market. The overall long positions in the Nifty Futures market has come down from 51% yesterday morning to 49% by the end of the day. In the options market the Nifty put call ratio dropped as there was a lot of demand for the calls and Nifty put call ratio dropped to 1.63 from 1.69 seen at the beginning of the day. Open interest got added at maximum at 11100 call to the tune of 2.5 lakh positions and 11200 call added 2.4 lakh positions and 11300 call added 1.1 lakh positions. Still 11000 call has the maximum open interest but on the put side is still at 10000 put followed by 10500 put. Smart money is preparing for a BJP victory as well as defeat in all the 3 states where it is in direct competition with Congress. 

What is the Nifty call for the day?

Things are not at all looking good for the market and today we will open close to 10700 mark and that will take us below the 200 day moving average and if we quickly dont recover to 10750 levels then we might actually go into temporary bear zone unless the exit polls tomorrow show a decisive victory for BJP. You already have a position at 10820-10840 levels and that will be in deep losses. Hold on to it for sometime as we have every chance of recovery. There are days when you have to sit tight and today is one such day. Stay out of the market and see where this growth scare will take Nifty to. No trade for today.

Bhagavadgita Chapter 14 Guna Triya Vibhaga Yoga Verse 12

Chapter 14 Guna Triya  Vibhaga Yoga Verse 12

Lobhah pravrittir aarambhah karmanaam ashamah sprihaa;
Rajasyetaani jaayante vivriddhe bharatarshabha.

Greed, activity, the undertaking of actions, restlessness, longing—
these arise when Rajas is predominant, O Arjuna!

Interpretation

This is the second part of the three part shloka that now talks about when the Rajasik nature in an individual will be predominant. The Rajas or the Rajasik guna in an individual is predominant when he is overtaken by greed. Greed is the first step for an individual to get into Rajasik nature. Then he slowly draws himself into activities that are linked to ambition and growth and that creates restlessness and longing in him. Restlessness and longing are the results of his eagerness to achieve success in the tasks that he undertakes. When all these things arise in a person that is when he is engulfed by Rajasic nature, says Lord krishna.

Extending Interpretation to Mankind’s Life!

When you are anxious and restless, just pause for a minute and ask yourself, why are you restless? 99.9% of the time the answer will always be connected to an activity. We get restless when things don’t go according to our plan. We always have a wish list and expect that all that should be fulfilled. In fact, we measure success with the number of tasks that we achieve the given deadline. Chasing a deadline is the primary cause of restlessness. But is doing all this bad? Are we not here to do our duty or dharma? Are those duties not bound by time and the desired result? Is expecting a result from doing those things is undesirable? 

The answers to all the questions are one and simple. Do your work, don’t get attached to it. If we follow this simple principle, we are neither greedy or restless or there will be longing or you will be attached to actions. Think that every work is the gift of God and every task is done in His name. If we approach things with that perspective then all these negative feeling will never touch or affect us. We just have to leave everything to God because He alone knows when to give what. Deadlines are set by God, not by individuals. But there are some defined deadlines as God can never set a deadline directly. Those will be communicated to you through people and events. You should just understand them and act accordingly.

Market Trade Setup 5th December #NIFTY

Market Setup 5th December

There was a huge scare that we woke up to. Dow Jones has plunged 800 points overnight. This is the worst fall for Dow Jones since 2011. This is coming on the back of the global growth scare. Added to that is the doubts that US-China trade truce might not last for long.

The main point is, why did Dow lose 800 points? The answer came from the flattening of the Yield curves of 2 yr, 5 yr and 10 yr bonds where the interest rates have narrowed so much that 5 yr yield fell below the 2 yr yield curve for the first time since 2007 and the spread between 2 year and 10 yr yield curves went to the narrowest of 11 bps for the first time in 10 years. This according to Rabo bank is the signs of the recession coming as soon as June 2020. All the Asian markets also are trading in negative on the back of this terrible news coming from the US.

On the domestics front, we have a different fundamental to deal with and that is going to the RBI credit policy which is going to come at 2.30pm today. Three factors are important here. First is what will happen to CRR, SLR and Repo rates. According to me, RBI will not touch CRR and Repo which are at 4% and 6.5% now but they can actually look at reducing the SLR, which is the money that can be parked by banks in Govt securities. This is at 19.5% now and RBI might bring it down to 18.5% to allow more liquidity in the market, which is what Govt wants now. Second is the tone of the policy, which might be changed to “neutral” from “calibrated tightening” and RBI might sound dovish in it statement. The Third is the inflation and growth projections. RBI might bring down its inflation forecast by upto 50 bps which is good and the growth forecast from 7.5% to 7.4%. 

On the derivatives front, there has been a lot of action seen in the Futures market both on the long side as well as short side. The options market has the Nifty put call ratio going up to 1.70 from 1.68. 10800 put added 2.8 lakh positions while 10600 put added 2.2 lakh positions. Still 10000 put continues to have the highest open interest while 10500 put is also picking up the open interest. On the call side 10900 call added 76,000 open interest and 11000 call still continues to have the highest open interest of 27.2 lakh and 11200 is also slowly picking up in the open interest. 

What is the Nifty call for the day?

The global growth scare will make the Nifty open today in the 10810-10840 range and what happens further needs to be seen. If you have taken positions yesterday around 10840 odd levels then wait for 10900 to be reached before closing positions. If you have not taken any positions, then wait for Nifty to stabilize at 10780 zone and go long with a 50 point target. Today’s monetary policy will add some volatility and use that to exit positions not enter.