Diwali week and it looks like we are racing away towards new highs!!!!!!!

Friday we made a new all time high of 10191 and now we are all set to go beyond that, much beyond. The macro factors are a big cheer. Exports are up 26% which is the highest in 2 years and this is following up the good IIP and CPI data that also came better than expected. The trade data that came on Saturday was a big shot in the arm. The exports grew by 25.7% in September to 28.61 billion. Engineering goods grew by 44%, Petroleum products 40%, Textiles 29% and gems and jewellery by 7%. In August 2016 the exports were at 23.8 billion. Imports on the other hand grew by just 18% thus narrowing and bringing the trade deficit to 9 billion dollars. This coupled with good Q2 results like Reliance, aided by good US and Asian markets are pushing the NIFTY up.

The derivatives data is also showing the positive trend!

The futures premium on Friday went up from 19 rupees to 25 rupees. This kind of premium with just 6 days left for expiry is a very positive sign. Another heartening fact is the way shorting of puts is moving to higher strikes, 10,200 and 10,100 puts are showing a lot of action indicating that if the bullish trend continues the base could be formed at 10150 levels. Lot of unwinding of calls is happening at 10,100 and 10,200 calls as it is becoming clear that shorting these calls there could be dangerous. Now the action is shifting to 10,300 and 10,400 calls which are at 25 rupees and 9 rupees and traders are wanting to eat that premium. Because of all this the Nifty Put call ratio is now at 1.63 indicating a over heating.

What is the trade in NIFTY now?

Expect an all time new high opening for NIFTY today and 10,200 might be hit within few minutes of opening. Buy around these levels for a Diwali target of 10,300 and be prepared to exit at any point for any profit as its diwali time, and diwali profit is more important than the amount of profit.

In other stock news

Godrej agrovet is getting listed on NSE and BSE today and the opening price is 490 rupees. The diwali week listing will mean a bumper opening, so sit back and enjoy as it keep moving up. Not the right time to pick it up. Another good news and the stock you can pick up is IndusInd bank. Saturday they announced merger with micro finance company Bharat financial inclusion and this will help in huge expansion of IndusInd bank. It will give 4400 rural branches where IndusInd bank has no presence. This is a great news.
For every 1000 shares of Bharat financial inclusion the shareholders will get 639 shares of IndusInd bank which values Bharat financial shares at 1160 rupees which is more than 10% higher than its present price of 1000 rupees. Expect a big positive for Bharat financial inclusion in the immediate term and good for IndusInd in the long term.

Q2 results scheduled for today

1. Bajaj Financials
2. Colgate Pomolive
3. DCB bank
4. DHFL
5. Federal bank
6. JM financials
7. Oberoi realty
8. Sasken tech
9. Texmaco rail
10. Zee learning