Market land News!

After a stormy budget day we are finally at the weekend and things are not looking great. Globally the US yield worries continue as the yields are rising continuously on the back of rising demand and inflation in US. The yield rates have touched 2.79% and are marching towards 2.8% which is a 4 year high. The US markets have ended slightly low and with crude touching 69 dollars again worries of 70 dollars reappear again. Asia is flat to negative and India will be affected the most.

Domestic Cues

Coming to domestics, India will have a huge impact of the global factors added to that is the budget and the worries arising out of fiscal deficit and LTCG tax. If we take out these two, its a wonderful budget where a new road map is laid for rural and healthcare sector and that should make the average Indian happier. But stock market is not run by average Indian and when we dont satisfy the expectations of the investor he is going to create a bloodbath on the market, which is what you might see today. I believe that if the focus shifts to agriculture and affordable healthcare, we might see the rural sector that has 70% population some kind of benefit, but that 70% is not invested in the market. For today people are more worried about fiscal deficit and rating agencies and LTCG and its impact on your profits. There is no choice and we have to live with it. In all this we should not forget that Q3 results are coming out.

Here are some of the Q3 results expected today.
1. Bajaj Auto
2. Bajaj Holdings
3. Bayer Crop
4. Digjam
5. Glaxo
6. Godrej Properties
7. Hindalco
8. Hathway cables
9. Inox Wind
10. MRPL
12. Taj GVK
13. Tata Global
14. Thomas cook
15. TTK health
16. Whirlpool

Derivatives Action

On the derivatives front, there was a lot of volatility in the markets yesterday and lots of short and long positions were taken at different times. But a steady decline in Nifty premium from 27 points to 14 points indicates a short build up in the market indicating a downtrend happening. On the options side some unwinding of positions was seen at 10900 call and that means there is a real danger now of Nifty going towards that level. The short of calls has now started at 11100 call and 11200 call that had 140 rupees and 95 rupees premium. With 10300 looking difficult as of now smart traders want to eat into this profit. The call shorting brought down Nifty put call ratio to 1.21 from 1.30 level.

What is the Nifty strategy for today?

There is going to be a huge gap down today and Nifty might open close to 10900 levels and 10850 is a very strong support and market should hold. If that happens then 10850 to 11100 will become a 250 point band where Nifty could gravitate in the next few days. The better strategy is to go long at 10850 zone only after confirming that 10850 is holding. For that to happen you might have to wait till Monday. So don’t try to catch the falling knives. Wait patiently, you will get an opportunity for entering again coming next week.

What is the Bank Nifty strategy for the day?

The behavior of bank Nifty is more volatile than Nifty and today we might see the 27000 level taken off at the opening itself. We might go to 26750 levels and there we might find some support. I would want to totally avoid Bank Nifty and want to see some stability coming there before even thinking of investing. Dont think that you can go short and make money in this kind of market. When volatility is high, its better to stay till market stabilizes.