Markets and News

After a 3 day break we are back again. Friday was a fantastic day on US and Asia and that has kept those markets up. The macro numbers from Japan have been very encouraging and that seems to have rub-off on the other markets also. Asia is full green today and one good news from Japan is that it has crossed that bearish levels that it has reached in early 90s and the 25 plus years of bear market and a bearish economy finally seems to have come to an end. But the only worry is the Brent which is still trading close to 71 dollar mark.

Domestic Cues

On the domestic front, there are many cues to start with in this week. The final full fledged budget of this Govt is coming on Thursday and that will change the course of the market. But the most important event for today is the Annual Economic Survey that would be tabled in the Parliament at 12 noon today. It will have a lot of insights on the performance of the economy in last 1 year and will give some insights into the Q3 GDP coming at the end of the year. The other big fundamental is the Q3 results of the companies and they seem to be on the right track so far.

Here is the list of Q3 results expected to come today.

1. Century Textiles
2. Emami
3. HDFC
4. IDFC
5. Inox Leisure
6. Indian bank
7. RBL bank
8. Reliance Communications
9. Subex systems
10. Tech Mahindra
11. Wockhardt Pharma

Derivatives Action

On the derivatives front Today is the start of the new series and after a 600 plus point gain for January series February series starts very heavy with 77% of positions getting rolled over into this series. This series is also going to be a very volatile series and also the shortest series with just 25 days! The expiry is on 22nd Feb which is the earliest. The series is going to start on a fantastic note at 11100 level and if the things go according to plan, then 11500 is something that we will see in this series. On the downside if there is a post budget correction then the market might touch 10700 levels before picking the steam back. This is a series that will have fundamentals laying as much role as technicals and in this kind of volatile series traders are expected to use Straddles and Strangles to the maximum and 11050 long straddle can be taken sometime at the beginning of the series.

What is the NIFTY call for the day?

On Friday we had a 3PM move that has happened on the upside and on Friday we were not trading but SGX Nifty was trading and it was positive due to global factors. So, today’s open will be a huge gap up around 11100 levels and might reach another all time high. But what happens after that needs to be seen. The correction could take Nifty back to 11050 levels and once it goes there buying can happen. The day will be bit volatile and the macro economic survey might take the Nifty to as high as 11130-11150 levels. So, the strategy for the day is to buy the dips at 11050-11070 zones with 11130-11150 as the targets intraday and 11200 as the target for next 2-3 days.

What is the Bank Nifty strategy for today?

This is the budget month and Bank NIFTY will be impacted maximum with this. So, from today I have started the new section of Bank Nifty call. One more reason is also because of the growing importance of Bank Nifty. The Thursday expiry also pulled Bank Nifty up and it closed almost 0.2% up when Nifty closed marginally down. Bank Nifty today will start its 1st Feb expiry series and 1st Feb is also the budget day. 27400 is a very important strike to watch out for. Wait for my twitter calls on what to do in Bank Nifty but for the time being, taking a long position around 27400 levels with 27550 as the target will be a wise thing to do!