Big Day!

The last day of November, and the most important day of the month. Two major events are scheduled, one is GDP figures for Q2 of FY17-18 and second is the expiry of the November series, the longest series we have seen this year. Best news is from US which came up with its revised GDP data for Q3. From provisional 3.0% it was revised to 3.3% that is a great news. But Asia is not that positive riding on US tax fears and ICBM launched by North Korea. Most of the Asian markets are trading in red as I am writing this.
Coming to Indian GDP data, it’s impossible to predict as data doesn’t exist with anyone and only Govt can get the data. So anyone making a prediction is an intelligent guess work and that needs to be taken with caution.

So, following is the predictions for this quarter.

1. GDP is expected to come at 6.4% vs 5.7% seen in the previous quarter
2. GVA is expected to come at 6.3% vs 5.6% seen in the previous quarter
3. Agriculture is likely to slow down to 1.8 to 2.2%. No logical explanation offered to this.
4. Manufacturing sector is likely to pick up to 5.5% vs 1.5% odd seen previously. This is primarily on the back of good IIP numbers in August and September.
5. Trade hotels and transport is likely to see a 9% to 10.5% growth and that’s purely based on tax deposit numbers that dont have a base.
6. Finance and real estate could come at 8.5% and that is also speculative.
7. Finally the Govt spending or pulic administration is likely to come around 5.6% as Govt is tightening fiscal spending and that is compared to 9.6% seen in the previous quarter.
We all have to wait till 5.30PM to see what exactly are the real numbers.

Futures & Options!

On the derivative front, this series is one of the flattest series of the year and we have seen just 20 points up move from last expiry close. But if you see volatility we have seen nearly 400 point volatility this series. It went all the way up to 10480 on the upside and 10076 on the downside. So, if you had taken a long straddle at the beginning of the series at 10300 level you would have made a lot of money on both sides. Refer to 27th October post of mine where I had spoken about it. But today F&O cues are looking mixed. The Nifty futures is trading at a discount and you have more short calls and long puts than short puts and long calls. That had pushed the NIFTY put call ratio to 1.27 at the end of the day from 1.33 seen at the beginning of the day.

What is the NIFTY strategy for the day?

NIFTY is likely to open gap down around 10320 which is the 20 day moving average and your short position taken yesterday, if you are still holding will now give you 70 point profit. Today NIFTY is likely to move between 10265 to 10380 range and you need to take positions accordingly. Do not buy in the options market and only take positions in the futures market. You could go for a long position with a 30-40 point target when NIFTY goes below 10320 or around 10320. I am suggesting a short straddle at 10350 that might work for you and another strangle which I will tweet sometime in the morning.